Report Title:

County Surcharge on State Tax

Description:

Repeals deadline for counties electing to establish a county surcharge on state tax to pass an ordinance to enact the surcharge.  Allows counties under 500,000 population to use proceeds without restriction.  Ceases state deduction of 10% for costs if counties of Kauai, Maui, and Hawaii all adopt ordinances.

HOUSE OF REPRESENTATIVES	H.B. NO.	342
TWENTY-FIFTH LEGISLATURE, 2009
STATE OF HAWAII

A BILL FOR AN ACT

relating to county surcharge on state tax.

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

     SECTION 1.  Section 46-16.8, Hawaii Revised Statutes, is amended as follows:

     1.  By amending subsection (a) to read:

     "(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[;] without limitation as to the date on which the ordinance is adopted; 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 December 31, 2005; and

(3)] (2)  No county surcharge on state tax that may be authorized under this section shall be levied prior to January 1, 2007.

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."

     2.  By amending subsection (d) to read:

     "(d)  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) shall deposit the proceeds to the credit of each respective county general fund and may 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).]

any purposes determined by each respective county without restriction; provided that the director of finance shall cease deducting ten per cent of the gross proceeds of a respective county's surcharge on state tax to reimburse the State for the costs of assessment, collection, and disposition of the county surcharge on state tax immediately subsequent to the certification by the attorney general to the effect that all of the counties under this subsection have, in fact, adopted an ordinance."

     SECTION 2.  Section 248-2.6, Hawaii Revised Statutes, is amended by amending subsections (a) and (b) to read as follows:

     "(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 the State for the costs of assessment, collection, and disposition of the county surcharge on state tax incurred by the State[.]; provided that if all counties with a population equal to or less than five hundred thousand adopt ordinances pursuant to section 46‑16.8(d), and upon a certification by the attorney general to the effect that all of the counties under section 46‑16.8(d) have, in fact, adopted ordinances, the director of finance shall immediately cease deducting the ten per cent for costs of assessment, collection, and disposition.  Amounts retained shall be general fund realizations of the State.

     (b)  [The] Subject to subsection (a), the amounts deducted for costs of assessment, collection, and disposition of county surcharges on state tax shall be withheld from payment to the counties by the State out of the county surcharges on state tax collected for the current calendar year."

     SECTION 3.  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;

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

        [(A)] (1)  The ordinance shall be repealed on December 31, 2022;

        [(B)] (2)  This Act shall be repealed on December 31, 2022; and

        [(C)] (3)  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 4.  Statutory material to be repealed is bracketed and stricken.  New statutory material is underscored.

     SECTION 5.  This Act shall take effect upon its approval.

INTRODUCED BY:

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