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HB604
HOUSE OF REPRESENTATIVES
H.B. NO.
604
THIRTY-THIRD LEGISLATURE, 2025
STATE OF HAWAII
A BILL FOR AN ACT
RELATING
TO TAX REVENUES
.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
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SECTION
1
.
�
Section 213, Hawaiian Homes Commission Act,
1920, as amended, is amended by amending subsection (c) to read as follows:
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"(c)
�
Hawaiian home general loan fund.
�
Moneys appropriated by the legislature for
the construction of homes but not otherwise set aside for a particular fund,
for construction of replacement homes, for home repairs or additions, or for
the development and operation of a farm, ranch, or aquaculture operation;
moneys transferred from other funds;
moneys received pursuant to section 237D-2(f),
Hawaii Revised Statutes;
and installments of principal paid by the lessees
upon loans made to them from this fund, or as payments representing
reimbursements on account of advances, but not including interest on such loans
or advances, shall be deposited into this fund.
�
The moneys in the fund shall be used for purposes enumerated in section
214 and for payments provided in section 209; provided that, in addition to the
conditions enumerated in section 215, farm loans shall be subject to the
following conditions:
����
(1)
�
To be eligible for a farm loan the applicant
shall derive, or present an acceptable plan to derive, a major portion of the
applicant's income from farming;
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(2)
�
Farm loans made for the purpose of soil and
water conservation shall not exceed $20,000 and shall be for a term not to
exceed ten years;
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(3)
�
Subsidies and grants or cost-sharing funds
entitled and received by the lessee for soil and water conservation purposes
shall be assigned to the department for the repayment of the outstanding farm
indebtedness; and
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(4)
�
The lessee shall carry out recommended farm
management practices approved by a qualified agricultural agency.
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The
department may create an account within this fund to support the guarantee of
repayment of loans made by government agencies or private lending institutions
to a holder of a lease under section 207(a) or license issued under section
207(c)(1)(B).
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The
department may create an account within this fund for moneys borrowed from
government agencies or private lending institutions to be used for any of the
purposes enumerated in section 214.
�
Installments of principal and that part of the interest equal to the
interest charged to the department by the lender paid by the lessees on the
loans made to them from this account shall be deposited into the same
account.
�
Any additional interest or
other earnings arising out of investments from this account shall be credited
to and deposited into the Hawaiian home receipts fund."
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SECTION
2
.
�
Section 237D-2, Hawaii Revised Statutes, is
amended to read as follows:
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"
�237D-2
�
Imposition and rates
.
�
(a)
�
There is levied and shall be assessed and collected each month a tax of:
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(1)
�
Five per cent for
the period beginning on January 1, 1987, to June 30, 1994;
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(2)
�
Six per cent for
the period beginning on July 1, 1994, to December 31, 1998;
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(3)
�
7.25 per cent for
the period beginning on January 1, 1999, to June 30, 2009;
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(4)
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8.25 per cent for
the period beginning on July 1, 2009, to June 30, 2010; [
and
]
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(5)
�
9.25 per cent for
the period beginning on July 1, 2010,
to December 31, 2025;
and [
thereafter;
]
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(6)
�
10.25 per cent
for the period beginning on January 1, 2026, and thereafter;
on the gross rental or gross rental proceeds derived
from furnishing transient accommodations.
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(b)
�
Every transient accommodations broker, travel
agency, and tour packager who arranges transient accommodations at
noncommissioned negotiated contract rates and every operator or other taxpayer
who receives gross rental proceeds shall pay to the State the tax imposed by
subsection (a), as provided in this chapter.
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(c)
�
There is levied and shall be assessed and collected each month, on the
occupant of a resort time share vacation unit, a transient accommodations tax
of:
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(1)
�
7.25 per cent on
the fair market rental value until December 31, 2015;
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(2)
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8.25 per cent on
the fair market rental value for the period beginning on January 1, 2016, to
December 31, 2016; [
and
]
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(3)
�
9.25 per cent on
the fair market rental value for the period beginning on January 1, 2017,
to
December 31, 2025;
and [
thereafter.
]
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(4)
�
10
.25
per cent on the fair market rental value for the period beginning on January 1,
2026, and thereafter.
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(d)
�
Every plan manager shall be liable for and pay to the State the
transient accommodations tax imposed by subsection (c) as provided in this
chapter.
�
Every resort time share vacation
plan shall be represented by a plan manager who shall be subject to this
chapter.
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(e)
�
Notwithstanding the tax rates established in subsections [
(a)(5)
]
(a)
and [
(c)(3),
]
(c)
the tax rates levied, assessed, and
collected pursuant to subsections (a) and (c) shall be [
10.25 per cent
]
increased
by one percentage point
for the period beginning on January 1, 2018, to
December 31, 2030; provided that:
����
(1)
�
The tax revenues
levied, assessed, and collected pursuant to this subsection that are in excess
of the
lower
revenues
that otherwise would have been
realized
from the levy, assessment, and collection of tax at the [
9.25 per cent rate
]
rates established pursuant to subsections (a) and (c)
shall be deposited
quarterly into the mass transit special fund established under section 248-2.7;
and
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(2)
�
If a court of
competent jurisdiction determines that the amount of county surcharge on state
tax revenues deducted and withheld by the State, pursuant to section 248-2.6,
violates statutory or constitutional law and, as a result, awards moneys to a
county with a population greater than five hundred thousand, then an amount
equal to the monetary award shall be deducted and withheld from the tax
revenues deposited under paragraph (1) into the mass transit special fund, and
those funds shall be a general fund realization of the State.
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(f)
�
Tax revenues levied, assessed, and collected pursuant
to the rates in subsections (a)(6) and (c)(4) that are in excess of the lower
revenues that otherwise would have been realized under the tax rates effective under
subsections (a)(5) and (c)(3) shall be deposited quarterly into the Hawaiian
home general loan fund established pursuant to section 213 of the Hawaiian
Homes Commission Act, 1920, as amended.
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(g)
�
The [
remaining
] tax revenues levied, assessed, and
collected at the [
9.25 per cent
] tax [
rate
]
rates established
pursuant to subsections (a) and (c)
, other than the revenues required to be
deposited pursuant to subsections (e) and (f),
shall be deposited [
into
the general fund in accordance with
]
and distributed pursuant to
section 237D-6.5(b)."
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SECTION
3
.
�
Section 237D-6.5, Hawaii Revised Statutes, is
amended by amending subsection (b) to read as follows:
����
"(b)
�
Except for the revenues collected pursuant to
section 237D-2(e)[
,
]
and (f),
revenues collected under this
chapter shall be distributed in the following priority, with the excess
revenues to be deposited into the general fund:
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(1)
�
$1,500,000
shall be allocated to the Turtle Bay conservation easement special fund
beginning July 1, 2015, for the reimbursement to the state general fund of debt
service on
reimbursable general obligation bonds
, including ongoing expenses related to the issuance of the
bonds, the proceeds of which were used to acquire the conservation easement and
other real property interests in Turtle Bay, Oahu, for the protection,
preservation, and enhancement of natural resources important to the State,
until the bonds are fully amortized;
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(2)
�
$11,000,000 shall
be allocated to the convention center enterprise special fund established under
section 201B-8;
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(3)
�
An allocation
shall be deposited into the tourism emergency special fund, established in
section 201B-10, in a manner sufficient to maintain a fund balance of
$5,000,000 in the tourism emergency special fund; and
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(4)
�
$3,000,000
shall be allocated to the special land and development fund established under
section 171-19; provided that the allocation shall be expended in accordance
with the Hawaii tourism authority strategic plan for:
���������
(A)
�
The protection,
preservation, maintenance, and enhancement of natural resources, including
beaches, important to the visitor industry;
���������
(B)
�
Planning
,
construction, and repair of facilities; and
���������
(C)
�
Operation
and
maintenance costs of public lands, including beaches,
connected
with enhancing the visitor experience.
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All transient accommodations taxes
shall be paid into the state treasury each month within ten days after collection
and shall be kept by the state director of finance in special accounts for
distribution as provided in this subsection."
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SECTION 4.
�
This Act does not affect rights and duties
that matured, penalties that were incurred, and proceedings that were begun
before its effective date.
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SECTION
5.
�
Statutory material to be repealed is
bracketed and stricken.
�
New statutory
material is underscored.
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SECTION 6.
�
This Act shall take effect upon its approval.
INTRODUCED BY:
_____________________________
Report Title:
TAT;
HHCA; Tax Revenues; Deposits; Hawaiian Home General Loan Fund
Description:
Beginning
on 1/1/2026, increases transient accommodations tax rates by 1 percentage point.
�
Deposits the increased revenues into the Hawaiian
Home General Loan Fund established under the Hawaiian Homes Commission Act,
1920, as amended.
The summary description
of legislation appearing on this page is for informational purposes only and is
not legislation or evidence of legislative intent.