STAND. COM. REP. 2839

Honolulu, Hawaii

, 2004

RE: S.B. No. 2125

S.D. 1

 

 

Honorable Robert Bunda

President of the Senate

Twenty-Second State Legislature

Regular Session of 2004

State of Hawaii

Sir:

Your Committee on Ways and Means, to which was referred S.B. No. 2125 entitled:

"A BILL FOR AN ACT RELATING TO CONVEYANCE TAX,"

begs leave to report as follows:

The purpose of this measure is to change the rate of the conveyance tax from a flat rate to a sliding scale schedule.

Specifically, the bill maintains the present 10 cents per $100 rate, but provides that the rate will apply for properties conveyed up to $385,000, and raises the rate to 20 cents per $100 for properties conveyed at $385,000 to $1,000,000, and 30 cents per $100 for properties conveyed at more than $1,000,000.

Your Committee finds that Hawaii's conveyance tax is among the lowest in the nation and that the relatively modest rate increase proposed in this bill will assist the following organizations that are dedicated to the preservation and protection of the State's land and natural resources and supported through the natural area reserve fund, which receives twenty-five per cent of conveyance taxes collected:

(1) The Natural Area Partnership and Forest Stewardship Programs that create public/private partnerships for the management and protection of natural resources on private lands permanently dedicated to conservation;

(2) Watershed partnerships that protect large areas of forested watersheds for water recharge and other functions on both private and public lands; and

(3) The Youth Conservation Corps, which builds a strong local work force that understands and appreciates the importance of Hawaii's natural resources.

Conveyance tax revenues are also allocated as follows:

(1) Twenty-five per cent to the Rental Housing Trust Fund; and

(2) Fifty per cent to the general fund.

Your Committee has amended the bill by:

(1) Maintaining the present conveyance tax rate of 10 cents per $100 for conveyances up to $500,000, instead of $385,000;

(2) Changing the sliding scale for properties taxed at the proposed 20 cents per $100 and conveyed at $385,000 to $1,000,000, to apply to properties conveyed at $500,001 to $1,000,000;

(3) Increasing the proposed conveyance tax rate from 30 cents to 50 cents per $100 for conveyances over $1,000,000; and

(4) Repealing the proposed sliding scale after five years and reverting the conveyance tax rates to their present levels.

As affirmed by the record of votes of the members of your Committee on Ways and Means that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 2125, as amended herein, and recommends that it pass Third Reading in the form attached hereto as S.B. No. 2125, S.D. 1.

 

Respectfully submitted on behalf of the members of the Committee on Ways and Means,

____________________________

BRIAN T. TANIGUCHI, Chair