TWENTY-EIGHTH LEGISLATURE, 2016
STATE OF HAWAII
A BILL FOR AN ACT
relating to transportation.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
SECTION 1. In 2005, the legislature authorized the counties to adopt a 0.5 per cent surcharge on the state general excise tax to fund transit-oriented development projects. The city and county of Honolulu adopted an ordinance establishing a 0.5 per cent surcharge on the general excise tax on business transactions on Oahu. No other county adopted a surcharge as authorized by the legislature. Section 248-2.6, Hawaii Revised Statutes, detailing the disposition of county surcharge proceeds, provides a ten per cent withholding of surcharge funds by the state to cover the costs of assessment, collection, and disposition of county surcharges on state tax.
The legislature finds that development around rapid transit stations involves relatively more intense mixed use development, which reduces the costs of constructing affordable housing, especially since less parking is provided. With daily goods and services located within walking distance, households located near rapid transit stations can also considerably reduce transportation costs.
The legislature further finds that if insufficient incentives are provided for the development and maintenance of affordable housing in areas surrounding rapid transit stations, gentrification of these neighborhoods may occur, resulting in significantly more expensive market housing replacing affordable housing. Therefore, it is important to encourage the construction of new affordable housing and maintenance of existing affordable housing in transit-oriented development projects.
The legislature finds that because the amounts collected by the State for administration of the county surcharge likely exceed the actual costs of administration, the excess funds should be used by the State for transit-oriented development.
The purpose of this Act is to allocate one-half of the portion of the county surcharge on state tax retained by the State to fund transit-oriented development.
SECTION 2. Section 248-2.6, Hawaii Revised Statutes, is amended to read as follows:
County surcharge on state tax; disposition of proceeds. (a) If
adopted by county ordinance, all county surcharges on state tax collected by
the director of taxation shall be paid into the state treasury quarterly,
within ten working days after collection, and shall be placed by the director
of finance in special accounts. Out of the revenues generated by county
surcharges on state tax paid into each respective state treasury special
account, the director of finance shall deduct ten per cent of the gross
proceeds of a respective county's surcharge on state tax to [ reimburse]:
(1) Reimburse the State for the costs
of assessment, collection, and disposition of the county surcharge on state tax
incurred by the State[
. Amounts]; and
(2) Fund transit-oriented development.
One-half of the amounts retained by the State shall be deposited into the dwelling unit revolving fund established under section 201H-191. The remaining amounts retained shall be general fund realizations of the State.
(b) The amounts deducted [
for costs of
assessment, collection, and disposition of county surcharges on state tax] under
subsection (a) shall be withheld from payment to the counties by the State
out of the county surcharges on state tax collected for the current calendar
(c) For the purpose of this section, the costs of assessment, collection, and disposition of the county surcharges on state tax shall include any and all costs, direct or indirect, that are deemed necessary and proper to effectively administer this section and sections 237-8.6 and 238-2.6.
(d) After the deduction, deposit, and
withholding of [
the costs] funds under subsections (a) and (b),
the director of finance shall pay the remaining balance on [ a[ ]]
quarterly basis to the director of finance of each county that has adopted a
county surcharge on state tax under section 46-16.8. The quarterly payments
shall be made after the county surcharges on state tax have been paid into the
state treasury special accounts or after the disposition of any tax appeal, as
the case may be. All county surcharges on state tax collected shall be
distributed by the director of finance to the county in which the county
surcharge on state tax is generated and shall be a general fund realization of
the county, to be used for the purposes specified in section 46-16.8 by each of
SECTION 3. Section 201H-191, Hawaii Revised Statutes, is amended to read as follows:
Dwelling unit revolving fund. (a) There is created a dwelling unit
revolving fund. The funds appropriated for the purpose of the dwelling unit
revolving fund and all moneys received or collected by the corporation for the
purpose of the revolving fund shall be deposited in the revolving fund. The
proceeds in the revolving fund shall be used to reimburse the general fund to
pay the interest on general obligation bonds issued for the purposes of the
revolving fund, for the necessary expenses in administering housing development
programs, and for carrying out the purposes of housing development programs,
including but not limited to the expansion of community facilities constructed
in conjunction with housing projects, permanent primary or secondary financing,
and supplementing building costs, federal guarantees required for operational
losses, and all things required by any federal agency in the construction and
receipt of federal funds or low‑income housing tax credits for housing
(b) Funds deposited into the dwelling unit revolving fund pursuant to section 248-2.6 shall be expended for infrastructure costs related to the development of affordable housing and other transit-oriented development projects within a half-mile radius of a rail transit station.
For the purposes of this section, "infrastructure costs" includes but it not limited to costs related to the design and construction of new roads, road widenings, road improvements, sidewalks, drainage, sewer improvements, traffic signals, bicycle lanes, and lighting."
SECTION 4. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.
SECTION 5. This Act shall take effect on July 1, 2016.
County Surcharge on State Tax; Transit-Oriented Development; Transportation
Requires that one-half of the portion of the county surcharge on state tax retained by the State be deposited into the dwelling unit revolving fund. Requires that the funds deposited be used for transit-oriented development.
The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.