Status of 2017 Legislative Tax Measures

Below is our list of 2017 Legislative Tax Measures.

The first page of the list is the list of bills introduced by the Executive Branch.  These are organized by agency:

  • BED = Dept. of Business, Economic Development, and Tourism
  • BUF = Dept. of Budget and Finance
  • CCA = Dept. of Commerce and Consumer Affairs
  • PSD = Dept. of Public Safety
  • TAX = Dept. of Taxation
  • TRN = Dept. of Transportation

Subsequent pages in the list are organized by tax type, and within tax type by bill number.

Numbers in strikethrough text are measures that appear to be dead, either because they missed a deadline or because they were deferred by a committee hearing the measure.  However, no measure is permanently dead until the legislative session adjourns.

Continue reading Status of 2017 Legislative Tax Measures

Honolulu Rail Informational Briefing, August 14, 2017

SUBJECT:  Honolulu Rail Informational Briefing, August 14, 2017.  This information is submitted in response to the Notice of Informational Briefing by the Senate Committees on TRE, PSM, and WAM, and the House Committees on TRN and FIN.

EXECUTIVE SUMMARY:  The Committees are considering various options to assist the City & County of Honolulu in financing a rapid transit system.  This testimony discusses various financing options and constitutional and statutory restrictions on them.

General Excise Tax Surcharge:  It must be remembered that this surcharge is not the State’s money.  The State authorized the counties to adopt taxing ordinances under certain conditions and is assisting with collecting and remitting the surcharge funds to the counties; however, the tax is imposed by county ordinance, not state statute.  The county ordinance only impacts businesses and residents of the county enacting it.  The State’s ability to enact oversight restrictions and conditions affecting this money is limited.

State Tax Monies:  Monies raised from statewide taxes, such as the General Excise Tax and the Transient Accommodations Tax, do belong to the State and may be disbursed by the State.  Because the tax is imposed by state statute, it impacts businesses and residents throughout the State.  The State’s ability to enact oversight restrictions and conditions affecting this money is broad.

County Property Tax Monies:  Monies raised from real property taxes unquestionably belong to the counties under the Hawaii Constitution as it now exists.  The State has no ability to enact oversight restrictions and conditions affecting this money.

Continue reading Honolulu Rail Informational Briefing, August 14, 2017

SB 1146, HD-2

SUBJECT:  MISCELLANEOUS, Exempt Affordable Housing from School Impact Fees

BILL NUMBER:  SB 1146, HD-2

INTRODUCED BY:  House Committee on Education

EXECUTIVE SUMMARY:  Our Department of Education now may require real estate developers to pay it an “education impact fee” for the anticipated costs of new school facilities.  Although the law as originally designed explicitly requires government housing projects and affordable housing projects to pay this fee as well, this bill proposes to exempt such projects from the fee.  The question left unanswered is:  Who is expected to pay the freight for the projects that are exempted?

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SB 1183, HD-1

SUBJECT:  MISCELLANEOUS, Extend, and Change 10% Skim Off, County Surcharge

BILL NUMBER:  SB 1183, HD-1

INTRODUCED BY:  House Committee on Transportation

EXECUTIVE SUMMARY:  A contributing factor to the financial woes of the City and County of Honolulu is the fact that the state is siphoning 10% of all rail surcharge collections into the general fund.  This diversion was supposed to represent payment to the state for the costs incurred in administering the surcharge, but the amount diverted turns is a massive amount of money, roughly $25 million a year which is almost as much as the entire operating budget of the department of taxation.  The amount is obviously far in excess of the costs involved.  The Foundation has contended that a diversion of the City and County’s revenue of that magnitude is unconstitutional and its lawsuit is still pending in the court system.

This bill changes the 10% diversion to an unspecified amount, together with an unspecified amount for the State Department of Transportation for state highway projects.  This does not solve the constitutional problems, namely that the State is skimming money off a county-imposed tax to fund state projects where the burden of paying the tax is borne only by the county residents and businesses.

Continue reading SB 1183, HD-1

HB 1593, SD-1

SUBJECT:  MISCELLANEOUS, Raid GEMS for Rebate Program

BILL NUMBER:  HB 1593, SD-1

INTRODUCED BY:  Senate Committees on Transportation and Energy and Commerce, Consumer Protection, and Health

EXECUTIVE SUMMARY:  Proposes a rebate program for energy storage systems.  Funds the program by raiding the GEMS fund, which may well be in breach of the bond indentures signed when the initial $150 million for the GEMS fund was raised on the bond market.

Deletes the PUC’s regulatory authority over GEMS.

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HB 1044, SD-1

SUBJECT:  INCOME, Renewable Fuels Credit Administration

BILL NUMBER:  HB 1044, SD-1

INTRODUCED BY:  Senate Committees on Transportation and Energy and Economic Development, Tourism, and Technology

EXECUTIVE SUMMARY:  Provides that DBEDT will no longer certify, administer, and verify claims for this credit.  Instead, DBEDT would receive an independent, third-party certified statement from the credit claimant and would acknowledge receipt of the statement.  DBEDT would keep tabs on the $3 million annual aggregate cap, but complains that it lacks the required resources or expertise.

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HB 547, SD-1

SUBJECT:  NET INCOME, Credit for Exchange Student Host Families

BILL NUMBER:  HB 547, SD-1

INTRODUCED BY:  Senate Committees on Education and International Affairs and the Arts

EXECUTIVE SUMMARY:  Adds a new credit for expenses paid by families hosting foreign exchange students.  A direct appropriation would be preferable as it would provide some accountability for the taxpayer funds being utilized to support this effort.

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HB 1244, SD-1

SUBJECT:  INCOME, Modify Tax Credit for Cesspool Conversion

BILL NUMBER:  HB 1244, SD-1

INTRODUCED BY:  Senate Committees on Commerce, Consumer Protection, and Health and Agriculture and Environment

EXECUTIVE SUMMARY:  Amends the cesspool upgrade, conversion, or connection income tax credit to: (1) make the tax credit refundable; (2) disallow the tax credit for taxpayers whose federal adjusted gross income exceeds certain amounts; (3) expand the criteria for cesspools that qualify for the tax credit; and (4) extend the sunset date to 12/31/2022.  Requires that all cesspools in the State be upgraded or converted to septic or aerobic treatment unit systems or connected to sewer systems.  Establishes a grant program to assist with cesspool upgrade or conversion costs.

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HB 552, SD-1

SUBJECT:  INCOME, Extend Obamacare Individual Mandate to Hawaii Law

BILL NUMBER:  HB 552, SD-1

INTRODUCED BY:  Senate Committee on Commerce, Consumer Protection, and Health

EXECUTIVE SUMMARY:  Reacting to threatened changes to Obamacare, this bill attempts to enact Obamacare, together with its individual mandate, in Hawaii.  The federal effort to repeal Obamacare has run into a roadblock, perhaps making it premature to adopt legislation like this in Hawaii.

If it is decided that this legislation is needed now, we urge great care.  Adapting a 900-page federal act to state law is not easy, and doing it in a 32-page bill probably means things are going to be missed.

Continue reading HB 552, SD-1

HB 943, SD-1

SUBJECT:  INCOME, UNEMPLOYMENT, Kapolei jobs initiative program

BILL NUMBER:  HB 943, SD-1

INTRODUCED BY:  Senate Committee on Judiciary and Labor

EXECUTIVE SUMMARY:  Enacts a Kapolei jobs initiative five-year pilot program similar to the current Enterprise Zone program, but with different requirements.  We question why this program is not being made available to other localities in the State.

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SB 704, HD-1

SUBJECT:  GENERAL EXCISE, TRANSIENT ACCOMMODATIONS, Transient Accommodations Brokers as Tax Collection Agents

BILL NUMBER:  SB 704, HD-1

INTRODUCED BY:  House Committee on Tourism

EXECUTIVE SUMMARY:  Allows a transient accommodations broker to serve as a collection agent for general excise and transient accommodations taxes.  This type of arrangement would probably enhance collection of taxes because of the difficulty of policing individual owners.

Continue reading SB 704, HD-1