HOUSE OF REPRESENTATIVES	H.B. NO.	134
TWENTY-EIGHTH LEGISLATURE, 2015		H.D. 1
STATE OF HAWAII		S.D. 2

A BILL FOR AN ACT

 

 

RELATING TO TAXATION.

 

 

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

 

     SECTION 1.  The purpose of this Act is to address the county surcharge on state general excise and use taxes.

     More specifically, this Act:

     (1)  Authorizes the extension of the surcharge by any county that has adopted an ordinance to establish the surcharge prior to the effective date of this Act;

     (2)  Authorizes other counties to adopt ordinances establishing the surcharge;

     (3)  Limits the use of surcharge revenues by any county that has adopted an ordinance to establish the surcharge prior to the effective date of this Act to "capital costs";

     (4)  Expands the definition of "capital costs" for counties with a population greater than five hundred thousand; and

     (5)  Requires certain actions by the board of the transit agency that is constructing the locally preferred alternative for a mass transit project funded by the surcharge.

     SECTION 2.  This Act shall not affect the validity or effect of any surcharge on state tax adopted pursuant to Act 247, Session Laws of Hawaii 2005, prior to the effective date of this Act.

     SECTION 3.  Section 46-16.8, Hawaii Revised Statutes, is amended to read as follows:

     "[[]§46-16.8[]]  County surcharge on state tax.  (a)  Each county may establish a surcharge on state tax at the rates enumerated in sections 237-8.6 and 238-2.6.  A county electing to establish this surcharge shall do so by ordinance; provided that:

     (1)  No ordinance shall be adopted until the county has conducted a public hearing on the proposed ordinance;

     (2)  The ordinance shall be adopted prior to December 31, 2005; and

     (3)  No county surcharge on state tax that may be authorized under this [section] subsection shall be levied prior to January 1, 2007[.], or after December 31, 2022, unless extended pursuant to subsection (b).

Notice of the public hearing required under paragraph (1) shall be published in a newspaper of general circulation within the county at least twice within a period of thirty days immediately preceding the date of the hearing.

     [(b)]  A county electing to exercise the authority granted under this [section] subsection shall notify the director of taxation within ten days after the county has adopted a surcharge on state tax ordinance and, beginning no earlier than January 1, 2007, the director of taxation shall levy, assess, collect, and otherwise administer the county surcharge on state tax.

     (b)  Each county that has established a surcharge on state tax prior to the effective date of this Act under authority of subsection (a) may extend the surcharge from January 1, 2023, until December 31, 2027, at the same rates.  A county electing to extend this surcharge shall do so by ordinance; provided that:

     (1)  No ordinance shall be adopted until the county has conducted a public hearing on the proposed ordinance; and

     (2)  The ordinance shall be adopted prior to January 1, 2016, but no earlier than July 1, 2015.

     A county electing to exercise the authority granted under this subsection shall notify the director of taxation within ten days after the county has adopted an ordinance extending the surcharge on state tax.  Beginning on January 1, 2023, the director of taxation shall levy, assess, collect, and otherwise administer the extended surcharge on state tax.

     (c)  Each county that has not established a surcharge on state tax prior to the effective date of this Act may establish the surcharge at the rates enumerated in sections 237-8.6 and 238-2.6.  A county electing to establish this surcharge shall do so by ordinance; provided that:

     (1)  No ordinance shall be adopted until the county has conducted a public hearing on the proposed ordinance;

     (2)  The ordinance shall be adopted prior to January 1, 2016, but no earlier than July 1, 2015; and

     (3)  No county surcharge on state tax that may be authorized under this subsection shall be levied prior to January 1, 2017, or after December 31, 2027.

     A county electing to exercise the authority granted under this subsection shall notify the director of taxation within ten days after the county has adopted a surcharge on state tax ordinance.  Beginning on January 1, 2017, the director of taxation shall levy, assess, collect, and otherwise administer the county surcharge on state tax.

     (d)  Notice of the public hearing required under subsection (b) or (c) before adoption of an ordinance establishing or extending the surcharge on state tax shall be published in a newspaper of general circulation within the county at least twice within a period of thirty days immediately preceding the date of the hearing.

     [(c)] (e)  Each county with a population greater than five hundred thousand that adopts or extends a county surcharge on state tax ordinance pursuant to subsection (a) or (b) shall use the surcharges received from the State for:

     (1)  [Operating or capital] Capital costs of a locally preferred alternative for a mass transit project; and

     (2)  Expenses in complying with the Americans with Disabilities Act of 1990 with respect to paragraph (1).

The county surcharge on state tax shall not be used to build or repair public roads or highways, bicycle paths, or support public transportation systems already in existence prior to July 12, 2005.

     [(d)] (f)  Each county with a population equal to or less than five hundred thousand that adopts a county surcharge on state tax ordinance pursuant to [subsection (a)] this section shall use the surcharges received from the State for:

     (1)  Operating or capital costs of public transportation within each county for public transportation systems, including public roadways or highways, public buses, trains, ferries, pedestrian paths or sidewalks, or bicycle paths; and

     (2)  Expenses in complying with the Americans with Disabilities Act of 1990 with respect to paragraph (1).

     [(e)] (g)  As used in this section, "capital costs" means nonrecurring costs required to construct a transit facility or system, including debt service, costs of land acquisition and development, acquiring of rights-of-way, planning, design, and construction, and including equipping and furnishing the facility or system.  For a county with a population greater than five hundred thousand, capital costs also include non-recurring personal services and other overhead costs that are not intended to continue after completion of construction of the minimum operable segment of the locally preferred alternative for a mass transit project."

     SECTION 4.  Section 237-8.6, Hawaii Revised Statutes, is amended by amending subsection (b) to read as follows:

     "(b)  Each county surcharge on state tax that may be adopted or extended pursuant to section [46-16.8(a)] 46-16.8 shall be levied beginning in the taxable year after the adoption of the relevant county ordinance; provided that no surcharge on state tax may be levied [prior]:

     (1)  Prior to:

         (A)  January 1, 2007[.], if the county surcharge on state tax was established by the adoption of an ordinance prior to January 1, 2007; or

         (B)  January 1, 2017, if the county surcharge on state tax was established by the adoption of an ordinance after June 30, 2015, but prior to January 1, 2016; and

     (2)  After December 31, 2027."

     SECTION 5.  Section 238-2.6, Hawaii Revised Statutes, is amended by amending subsection (b) to read as follows:

     "(b)  Each county surcharge on state tax that may be adopted or extended shall be levied beginning in the taxable year after the adoption of the relevant county ordinance; provided that no surcharge on state tax may be levied [prior]:

     (1)  Prior to:

         (A)  January 1, 2007[.], if the county surcharge on state tax was established by the adoption of an ordinance prior to January 1, 2007; or

          (B)  January 1, 2017, if the county surcharge on state tax was established by the adoption of an ordinance after June 30, 2015, but prior to January 1, 2016; and

     (2)  After December 31, 2027."

     SECTION 6.  Act 247, Session Laws of Hawaii 2005, is amended by amending section 9 to read as follows:

     "SECTION 9.  This Act shall take effect upon its approval; provided that:

     (1)  If none of the counties of the State adopt an ordinance to levy a county surcharge on state tax by December 31, 2005, this Act shall be repealed and section 437D-8.4, Hawaii Revised Statutes, shall be reenacted in the form in which it read on the day prior to the effective date of this Act;

     (2)  If any county does not adopt an ordinance to levy a county surcharge on state tax by December 31, 2005, it shall be prohibited from adopting such an ordinance pursuant to this Act, unless otherwise authorized by the legislature through a separate legislative act; and

     (3)  If an ordinance to levy a county surcharge on state tax is adopted by December 31, 2005:

         (A)  The ordinance shall be repealed on December 31, 2022; provided that the repeal of the ordinance shall not affect the validity or effect of an ordinance to extend a surcharge on state tax adopted pursuant to Act    , Session Laws of Hawaii 2015;

         (B)  This Act shall be repealed on December 31, [2022;] 2027; and

         (C)  Section 437D-8.4, Hawaii Revised Statutes, shall be reenacted in the form in which it read on the day prior to the effective date of this Act."

     SECTION 7.  (a)  For the purposes of this section:

     "Board" means the board of directors of the transit agency.

     "County" means the county, of which the board is a part.

     "Transit agency" means the agency constructing the locally preferred alternative for a mass transit project, the capital costs of which are funded by the county surcharge on state tax authorized under section 46-16.8, Hawaii Revised Statutes, prior to the effective date of this Act.

     (b)  The board shall submit annual reports to the legislature and governor on its transit-oriented development activities.  The reports shall be submitted at least twenty days prior to each regular session from 2016 to 2027.

     The reports shall include a description of:

     (1)  The actions and coordination undertaken to integrate transit-oriented development with anticipated population and housing growth; and

     (2)  The plans and activities to integrate transit stations with surrounding structures, facilities, and uses.

     (c)  With each annual report submitted pursuant to subsection (b), the board shall also submit the following:

     (1)  Management and financial audits of the board, transit agency, and locally preferred alternative for a mass transit project under construction by the transit agency;

     (2)  Project management reports on the construction of the locally preferred alternative for a mass transit project; and

     (3)  Status reports submitted to the Federal Transit Administration by a third party contracted to monitor the construction of the locally preferred alternative for a mass transit project for the Administration.

     (d)  The board shall place, as discussion items on its meeting agendas, each audit and report subject to subsection (c).  The audit or report shall be placed on the agenda of the meeting next following the completion of the audit or report.  The board shall make available an electronic copy of the audit or report on the board's website at the same time the meeting agendas are posted for the public notice.

     The board shall receive public testimony on the audits or reports at the meetings, in accordance with chapter 92, Hawaii Revised Statutes.

     SECTION 8.  Statutory material to be repealed is bracketed and stricken.  New statutory material is underscored.

     SECTION 9.  This Act shall take effect on July 1, 2015.

 

 

Report Title:

Public Transit; County Surcharge on State Tax

 

Description:

Reauthorizes the counties' authority to establish a county surcharge on state tax for a limited time period, with the surcharge to be effective from 1/1/2017 to 12/31/2027, if adopted.  Allows counties that have already established a county surcharge on state tax to extend the surcharge on state tax to 12/31/2027.  Limits the use of surcharge revenues by counties that have already established a county surcharge on state tax to capital costs.  Expands the definition of capital costs for counties with a population greater than 500,000.  Requires the board of directors of the transit agency constructing the locally preferred alternative for a mass transit project to conduct audits, submit annual reports to the governor and the legislature, and conduct public hearings and take testimony on the audits and reports.  (SD2)

 

 

 

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