REPORT TITLE:
Tax Laws; 5-Year Sunset


DESCRIPTION:
Proposes a constitutional amendment to provide that any new tax
law, including any statutory and constitutional provision
proposed by legislative enactment, shall be automatically
repealed when that law is 5-years old dating from its enactment
or latest amendment.

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                        
THE SENATE                              S.B. NO.           2698
TWENTIETH LEGISLATURE, 2000                                
STATE OF HAWAII                                            
                                                             
________________________________________________________________
________________________________________________________________


                   A  BILL  FOR  AN  ACT

RELATING TO TAXATION.



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

 1      SECTION 1.  The legislature finds that laws that impose new
 
 2 forms of taxation have a negative impact on both individuals and
 
 3 small businesses in Hawaii, discourage new businesses from
 
 4 opening new facilities and existing businesses from expanding
 
 5 their operations in the State, and serve to dampen the State's
 
 6 uncertain economic future.  Accordingly, the purpose of this Act
 
 7 is to amend article III of the Hawaii constitution to provide for
 
 8 the sunset of all new laws that impose new forms of taxation
 
 9 enacted by the legislature within five years after their
 
10 enactment or latest amendment.
 
11      SECTION 2.  Article III of the Constitution of the State of
 
12 Hawaii is amended by adding a new section to be appropriately
 
13 designated and to read as follows:
 
14               "TAX LAWS; AUTOMATIC FIVE-YEAR SUNSET
 
15      Section    .  (a)  Any statutory tax law, or any
 
16 constitutional tax law proposed by legislative enactment, that is
 
17 enacted after the effective date of this amendment shall be
 
18 repealed automatically five years after its enactment or most
 
19 recent amendment; provided that:
 

 
Page 2                                                     
                                     S.B. NO.           2698
                                                        
                                                        


 1      (1)  The legislature, in its discretion, may establish an
 
 2           automatic repeal date of less than five years;
 
 3      (2)  If a bill amends underlying statutory law or
 
 4           constitutional law proposed by legislative enactment,
 
 5           the automatic repeal shall provide for the reenactment
 
 6           of the underlying law in the form in which it read on
 
 7           the day before the effective date of that act, unless
 
 8           otherwise specifically stated in the act itself;
 
 9      (3)  No automatic repeal shall be removed, except during a
 
10           legislative session through the enactment of a separate
 
11           bill setting forth the reasons why the repeal should
 
12           not be removed, which shall be passed by a three-
 
13           fourths vote of the members to which each house of the
 
14           legislature is entitled; and
 
15      (4)  Any taxpayer in this State has standing to file a
 
16           declaratory judgment action against the legislature in
 
17           the circuit court of the circuit of which that taxpayer
 
18           is a resident to establish that a law enacted by the
 
19           legislature is or is not a tax law for purposes of this
 
20           section.  The circuit court shall hear and determine
 
21           the question without delay.  The findings and
 
22           determinations of the circuit court in the action shall
 
23           be conclusive.
 

 
Page 3                                                     
                                     S.B. NO.           2698
                                                        
                                                        


 1      (b)  Every department or agency administering state programs
 
 2 and every department or agency responsible for the formulation of
 
 3 programs and the preparation of program and financial plans,
 
 4 budgetary requests, and program performance reports, shall make
 
 5 available to the legislature and any member or committee of
 
 6 either house of the legislature, all documents and information as
 
 7 may be requested to enable the legislature to determine whether a
 
 8 tax law subject to automatic repeal under subsection (a) should
 
 9 be continued.  The legislature may request the department of
 
10 taxation, the department of budget and finance, and any other
 
11 department or agency to conduct an analysis of programs and
 
12 finances to assist the legislature in determining whether any tax
 
13 law should be repealed or continued.
 
14      (c)  As used in this section, the term "tax law" means any
 
15 measure enacted by the legislature that imposes a pecuniary
 
16 burden, assessment, charge, or fee on an individual, business,
 
17 corporation, partnership, limited liability partnership, or other
 
18 private entity, or on goods, services, or property, as a means of
 
19 revenue enhancement."
 
20      SECTION 3.  The question to be printed on the ballot shall
 
21 be as follows:
 
22      "Shall all future tax laws be repealed as they become five
 
23      years old or older, dating from their enactment or latest
 

 
Page 4                                                     
                                     S.B. NO.           2698
                                                        
                                                        


 1      amendment, unless three-fourths of the members of both
 
 2      houses of the legislature agree to remove the repeal?"
 
 3      SECTION 4.  New constitutional material is underscored.
 
 4      SECTION 5.  This amendment shall take effect upon compliance
 
 5 with article XVII, section 3, of the Constitution of the State of
 
 6 Hawaii.
 
 7 
 
 8                              INTRODUCED BY:______________________