STAND. COM. REP. NO. 347

 

Honolulu, Hawaii

                  

 

RE:    S.B. No. 938

       S.D. 1

 

 

 

Honorable Ronald D. Kouchi

President of the Senate

Twenty-Ninth State Legislature

Regular Session of 2017

State of Hawaii

 

Sir:

 

     Your Committee on Public Safety, Intergovernmental, and Military Affairs, to which was referred S.B. No. 938 entitled:

 

"A BILL FOR AN ACT RELATING TO REIMBURSEMENTS TO THE STATE FOR THE COSTS OF ASSESSMENT, COLLECTION, AND DISPOSITION OF THE COUNTY SURCHARGE ON STATE TAX,"

 

begs leave to report as follows:

 

     The purpose and intent of this measure is to repeal the requirement that the State Director of Finance 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.

 

     Your Committee received testimony in support of this measure from the Department of Budget and Finance, Honolulu City Council, Mayor of the City and County of Honolulu, Honolulu Rapid Transit Authority, General Contractors Association of Hawaii, and Hawaii Laborers-Employers Cooperation and Education Trust.  Your Committee received comments on this measure from the Tax Foundation of Hawaii.

 

     Your Committee finds that the State Director of Finance's deduction of ten per cent of the gross proceeds of a respective county's surcharge on state tax is unfair and inequitable to the taxpayers of the respective counties.  As constituted, the ten per cent deduction for the county's surcharge allows significant taxpayer dollars paid by taxpayers of a particular county to be redistributed for state projects that may provide no benefit to the county taxpayers.  Moreover, repealing the State's deduction of ten per cent of the counties' surcharge on state tax will provide increased revenue to the counties to use on a variety of initiatives, including public transportation projects.

 

     Your Committee has amended this measure by making technical, nonsubstantive amendments for the purposes of clarity and consistency.

 

     As affirmed by the record of votes of the members of your Committee on Public Safety, Intergovernmental, and Military Affairs that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 938, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 938, S.D. 1, and be referred to your Committee on Ways and Means.

 

Respectfully submitted on behalf of the members of the Committee on Public Safety, Intergovernmental, and Military Affairs,

 

 

 

________________________________

CLARENCE K. NISHIHARA, Chair