THE SENATE

S.B. NO.

686

TWENTY-NINTH LEGISLATURE, 2017

S.D. 2

STATE OF HAWAII

H.D. 1

 

 

 

 

 

A BILL FOR AN ACT

 

 

RELATING TO EDUCATION FUNDING.

 

 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

 


     SECTION 1.  The Hawaii Revised Statutes is amended by adding a new chapter to be appropriately designated and to read as follows:

"Chapter

Education surcharge on residential investment property and visitor accommodations

     §   -1  Definitions.  As used in this chapter:

     "Department" means the department of         .

     "Operator" means any person, corporation, copartnership, company, or other private business entity that operates one or more visitor accommodation, whether as owner or proprietor or as lessee, sublessee, mortgagee in possession, licensee, or otherwise, or engaging or continuing in any service business that involves the furnishing of visitor accommodations.

     "Plan manager" shall have the same meaning as in section 237D-1.

     "Property" shall have the same meaning as in section 248-1.

     "Residential investment property" means all land that is dedicated for residential use for which the owner does not qualify for a county homeowner's exemption, including appurtenances thereof and the buildings, structures, fences, and improvements erected on or affixed to the same, and any fixture that is erected on or affixed to the land, buildings, structures, fences, and improvements, including all machinery and other mechanical or allied equipment and the foundations thereof, and including apartments and condominiums.

     "Visitor accommodation" means all transient accommodations and resort time share vacation units, as defined in section 237D-1, and any other dwelling or lodging located in the State and let by an owner or operator for less than one hundred eighty days.

     §   -2  Education surcharges on residential investment property and visitor accommodations; establishment; purpose.  (a)  There is established an education surcharge on residential investment property and an education surcharge on visitor accommodations in the State.  The purpose of the education surcharges is to increase funding for the department of education.

     (b)  Revenue generated by the education surcharges on residential investment property and visitor accommodations shall be deposited into the education special fund established by section  -10 and shall be in addition to all other funds appropriated for the department of education.

     §  -3  Applicability.  (a)  There shall be levied, assessed, and collected an education surcharge on residential investment property and an education surcharge on visitor accommodations as provided in this chapter. 

     (b)  The education surcharges on residential investment property and visitor accommodations shall be imposed statewide on all:

     (1)  Residential investment properties; and

     (2)  Visitor accommodations, regardless of occupancy.

     (c)  A corporation, copartnership, company, or other private business entity that owns or operates residential investment property or one or more visitor accommodation shall be subject to any applicable education surcharge established by this chapter.  Property of a corporation, copartnership, company, or other private business entity shall be assessed the education surcharge under its corporate or firm name.

     (d)  A person or private business that is a wholly owned subsidiary or acting as an agent or on behalf of a corporation having its principal place of business outside the State shall be subject to any applicable education surcharge on residential investment property established by this chapter.

     (e)  Every personal representative, trustee, guardian, or other fiduciary shall be responsible for the performance of all acts required by this chapter with respect to any applicable education surcharge on residential investment property or visitor accommodations in their fiduciary capacity and shall be liable for the payment of an education surcharge on residential investment property or visitor accommodations held in the fiduciary's capacity, but shall not be personally liable and may retain, out of the money or other property which may be obtained in the fiduciary's capacity, so much as may be necessary to pay the education surcharge, recoup the payment thereof, or recover the amount paid from the beneficiary to whom property or visitor accommodations subject to an education surcharge pursuant to this chapter have been distributed.

     (f)  No education surcharge shall be established upon any property that is not subject to property taxation.

     (g)  The penalties provided by section 231-39 for failure to file a tax return shall be imposed on the amount of the applicable education surcharge for failure to file a return pursuant to section   -5(f), or failure to pay, file appropriate documentation with regard to, or correctly report the amount of the surcharge.

     §   -4  Education surcharge on residential investment property; levy; assessment.  (a)  There is levied and shall be assessed and collected each year on all residential investment property in the State an education surcharge as follows:

 

Property value     Surcharge per $1,000 of total property value

     $         and over           $7.50

     (b)  The education surcharge on residential investment property shall be imposed on the most recent valuation that is assessed by the county where the property is located for the purpose of determining the annual county property tax liability.

     (c)  For the purposes of this chapter, life tenants, personal representatives, trustees, guardians, or other fiduciaries may be, and persons holding government property under an agreement for the conveyance of the same to such persons shall be, considered as owners during the time any residential investment property is held or controlled by them as such, including:

     (1)  Lessees holding under any government lease during the time any residential investment property is held;

     (2)  Any tenant occupying government land for a period of one year or more;

     (3)  Persons holding any residential investment property under an agreement to purchase the same;

     (4)  Persons holding any residential investment property under a lease for a term to last during the lifetime of the lessee; and

     (5)  Persons bearing tax liability on the property during the time period for which an education surcharge on the property has been assessed.

     §   -5  Education surcharge on residential investment property; notice and returns.  (a)  Notices of the amount of the education surcharge on residential investment property shall be transmitted by each county through the United States mail to any property owner subject to the education surcharge.  Notice of the education surcharge amount shall be transmitted no later than October 31 of each calendar year to the owner's last known address or place of business.

     (b)  Each county shall by ordinance permit an owner to pay the education surcharge in the same manner provided for the payment of real property taxes.

     (c)  Whenever any county director of finance finds that there is not sufficient evidence to form sound appraisal of a residential investment property, for assessment purposes, of the value of the property or properties, or portions thereof, the county director of finance may require an owner to file a return within thirty days.  Consideration of and liability for a return, including in determining the fair market value of a property or properties, shall be made in the same manner and with the same limitations as for real property tax returns in the county in which the property is located.

     (d)  All returns made under this section shall be open to inspection by the public, and shall be admissible in evidence against the owner making the return, in any state court in any action wherein the value of the residential investment property, or portion thereof, covered by the return, may be in dispute.

     (e)  No owner shall be deemed to be aggrieved by any assessment made upon the owner's property that is based upon the opinion of value set forth in the owner's return unless the owner shows lack of uniformity or inequality as set forth in section 232-3.

     (f)  Failure to file a return required under this section shall render the owner liable for payment of an additional sum equal to the sum defined in and prescribed for failure to file a tax return under section 231-39(b)(1).

     (g)  If any return is sent by United States registered or certified mail, a record authenticated by the United States Postal Service of the registration or certification shall be considered evidence that the return was delivered to the county director of finance.  The date of registration or certification shall be deemed the postmarked date for filing purposes.

     (h)  Each county director of finance shall make publicly available a form for a return related to the education surcharge on residential investment property for use in collecting the education surcharge.

     §   -6  Education surcharge on residential investment property; appeals.  (a)  Any owner of residential investment property who is aggrieved by an assessment used to determine the amount of the education surcharge on residential investment property for any year may appeal from the assessment in the manner provided in the case of real property tax appeals.

     (b)  Each of the counties shall by ordinance provide for appeals from assessments used to determine the amount of the education surcharge in the same manner as provided in the case of real property tax appeals.

     (c)  Any county decision on an appeal for relief from the education surcharge may be appealed to the tax appeal court as provided in chapter 232.

     §   -7  Education surcharge on visitor accommodations; levy; assessment.  (a)  There is levied and shall be assessed and collected each year on all visitor accommodations in the State an education surcharge.

     (b)  The education surcharge shall be:

     (1)  $         per day for each visitor accommodation furnished by an operator or plan manager at a cost of less than $150 per day; and

     (2)  $         per day for each visitor accommodation furnished by an operator or plan manager at a cost of $150 per day or greater.

     (c)  On or before the final day of each calendar month, every operator or plan manager subject to an education surcharge on visitor accommodations during the preceding calendar month shall file a sworn return with the county director of finance using a form that the county director of finance shall prescribe together with a remittance for the amount of the education surcharge required by this section.

     (d)  Notwithstanding subsection (c), the county director of finance, for good cause and in writing, may permit an operator or plan manager to file a return required by this section and make payments thereon:

     (1)  On a quarterly basis during the calendar or fiscal year, the return and payment to be made on or before the final day of the calendar month after the close of each quarter; or

     (2)  On a semiannual basis during the calendar or fiscal year, the return and payment to be made no later than the final day of the calendar month after the close of each six-month period;

provided that the county director of finance is satisfied that the grant of the permit will not unduly jeopardize the collection of the surcharge due thereon or the operator's or plan manager's total surcharge liability.

     (e)  The county director of finance, for good cause and in writing, may permit an operator or plan manager to make monthly payments based on the operator's or plan manager's estimated quarterly or semiannual surcharge liability; provided that the operator or plan manager files a reconciliation return at the end of each quarter or each six-month period during the calendar or fiscal year.

     (f)  If an operator or plan manager filing a return on a quarterly or semiannual basis, as provided in this section, becomes delinquent in either the filing of the return or the payment of the education surcharge due thereon, or if the liability of an operator or plan manager who possesses a permit to file a return and make payments on a quarterly or semiannual basis exceeds $5,000 during the calendar year, or if the county director of finance determines that a quarterly or semiannual filing of return would unduly jeopardize the proper administration of this chapter, including the assessment or collection of the education surcharge on visitor accommodations, the county director of finance, at any time, may revoke an operator's or plan manager's permit, in which case the operator or plan manager shall then be required to file an immediate return and make payments thereon as provided in subsection (c).

     (g)  Payments collected by the department under this section shall be deposited into the education special fund established by section    -10.

     §   -8  Education surcharge on residential investment property; disposition of proceeds.  (a)  The education surcharge on residential investment property shall be collected by the counties in accordance with this section.  All moneys collected by the counties pursuant to the establishment of the education surcharge shall be paid into each county's treasury within ten working days after collection and shall be placed by each county's director of finance in a special account.  Out of the revenues generated by the education surcharge paid into each respective county treasury special account, the director of finance of each county shall deduct five per cent of the gross proceeds of a respective county's education surcharge collection to reimburse the county for the costs of assessment, collection, and disposition of the education surcharge incurred by the county.

     (b)  The amounts deducted for costs of assessment, collection, and disposition of the education surcharge pursuant to subsection (a) shall be withheld from payment to the State by each county out of the revenue generated by the education surcharge for the current calendar year.

     (c)  For the purpose of this section, the costs of assessment, collection, and disposition of the education surcharge shall include any and all costs, direct or indirect, that are deemed necessary and proper to effectively administer this chapter.

     (d)  After the deduction and withholding of the costs under subsections (a) and (b), the director of finance of each county shall, on a quarterly basis, remit the remaining balance of revenue collected under the education surcharge to the state director of finance.  The quarterly remittance shall be made after the education surcharge has been deposited into a county treasury special account and after the disposition of any appeal.

     (e)  Education surcharge payments received by the state director of finance from the counties shall be deposited into the education special fund established by section    -10.

     §   -9  Enforcement.  (a)  The department shall administer and enforce this chapter; provided that each county director of finance and the state director of finance, as applicable, shall administer and enforce:

     (1)  The examinations of books and records by any person or private entity subject to the education surcharge on residential investment property or the education surcharge on visitor accommodations; and

     (2)  Procedure and powers upon failure or refusal by a person or private entity to file a return, sworn return, or proper return.

     (b)  The department may contract with any state or county department or agency for the purposes of implementing or enforcing this chapter.

     (c)  The department shall adopt, amend, or repeal rules pursuant to chapter 91 to carry out this chapter.

     §   -10  Education special fund.  (a)  There is established within the state treasury a special fund to be known as the education special fund to be administered by the department and into which shall be deposited:

     (1)  Proceeds of the education surcharge on residential investment property established under section    -4;

     (2)  Proceeds of the education surcharge on visitor accommodations established under section    -7;

     (3)  All other funds received by the department and legally available for the purposes of the education special fund; and

     (4)  Interest accrued on all amounts in the education special fund.

     (b)  The education special fund shall not be subject to sections 36-27, 36-30, and 37-53.  Expenditures from the special fund shall be subject to sections 37-31 and 37-33 through 37-40.  Funds that are credited and transferred back to property owners from the special fund shall not be considered income and shall not be subject to state or county taxes.

     (c)  All amounts in the education special fund shall be exempt from all taxes and surcharges imposed by the State or the counties."

     SECTION 2.  This Act shall take effect on July 1, 2050.


 


 

Report Title:

Education Surcharge; Residential Investment Properties; Visitor Accommodations

 

Description:

Establishes education surcharges on residential investment properties and visitor accommodations for the purpose of funding public education.  (SB686 HD1)

 

 

 

The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.