SB 492: RELATING TO GENERAL EXCISE TAX.
- Session Year: 2025-2026
- House: Senate
- Latest Version Date: 2025-02-13
Current Status:
Failed
(2025-12-08: Carried over to 2026 Regular Session.)
Introduced
In Committee
First Chamber
In Committee
Second Chamber
Final Decking
Enacted
Authorizes each county that has established a surcharge on state tax before 7/1/2015 to extend the surcharge until 12/31/2045, at the same rates, if the county does so before 1/1/2028. Provides that no county surcharge on state tax authorized for a county that has not established a surcharge on state tax before 7/1/2015, shall be levied before 1/1/2019, or after 12/31/2045. Repeals certain conditions on the use of surcharges for housing infrastructure costs. Effective 5/13/2040. (SD1)
Authorizes each county that has established a surcharge on state tax before 7/1/2015 to extend the surcharge until 12/31/2045, at the same rates, if the county does so before 1/1/2028; Provides that no county surcharge on state tax authorized for a county that has not established a surcharge on state tax before 7/1/2015, shall be levied before 1/1/2019, or after 12/31/2045; and Repeals certain conditions on the use of surcharges received from the State for counties having a population equal to or less than 500,000 that adopt a county surcharge on state tax.
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THE SENATE |
S.B. NO. |
492 |
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THIRTY-THIRD LEGISLATURE, 2025 |
S.D. 1 |
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STATE OF HAWAII |
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A BILL FOR AN ACT
RELATING TO GENERAL EXCISE TAX.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
SECTION 2. Section 46-16.8, Hawaii Revised Statutes, is amended as follows:
1. By amending subsections (b) and (c) to read:
"(b)
Each county that has established a surcharge on state tax before July 1,
2015, under authority of subsection (a) may extend the surcharge until December
31, [2030,] 2045, at the same rates. A county electing to extend this surcharge
shall do so by ordinance; 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 before
January 1, [2018.] 2028.
A county electing to exercise the authority granted under this subsection shall notify the director of taxation within ten days after the county has adopted an ordinance extending the surcharge on state tax. The director of taxation shall levy, assess, collect, and otherwise administer the extended surcharge on state tax.
(c) Each county that has not established a surcharge pursuant to subsection (a) on state tax before July 1, 2015, may establish the surcharge 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; provided that:
(1) No ordinance shall be adopted until the county has conducted a public hearing on the proposed ordinance;
(2) The ordinance shall be adopted before December 31, 2023; and
(3) No county surcharge on state tax that
may be authorized under this subsection shall be levied before January 1, 2019,
or after December 31, [2030.] 2045.
A county electing to exercise the authority granted under this subsection shall notify the director of taxation within ten days after the county has adopted a surcharge on state tax ordinance. Beginning on January 1, 2019, January 1, 2020, January 1, 2024, or January 1, 2025, as applicable pursuant to sections 237-8.6 and 238-2.6, the director of taxation shall levy, assess, collect, and otherwise administer the county surcharge on state tax."
2. By amending subsection (g) to read:
"(g) Each county having a population equal to or less than five hundred thousand that adopts a county surcharge on state tax ordinance pursuant to this section shall use the surcharges received from the State for:
(1) Operating or capital costs of public transportation within each county for public transportation systems, including:
(A) Public roadways or highways;
(B) Public buses;
(C) Trains;
(D) Ferries;
(E) Pedestrian paths or sidewalks; or
(F) Bicycle paths;
(2) Expenses in complying with the Americans with Disabilities Act of 1990 with respect to paragraph (1); and
(3) Housing infrastructure costs[; provided
that a county that uses surcharge revenues for housing infrastructure shall not
pass on those housing infrastructure costs to the developer of a housing
project; provided further that this paragraph shall apply only if a county
amended its surcharge ordinance pursuant to subsection (d) or adopts a county
surcharge on state tax ordinance after December 31, 2022;
provided
that each county having a population equal to or less than five hundred
thousand that adopts a county surcharge on state tax ordinance pursuant to this
section after December 31, 2022, shall use the surcharge revenues received from
the State only for the purposes described in paragraph (3) for county
appropriated housing infrastructure costs]."
SECTION 3. Section 237-8.6, Hawaii Revised Statutes, is amended by amending subsection (b) to read as follows:
"(b) Each county surcharge on state tax that may be adopted, extended, or amended pursuant to section 46-16.8 shall be levied beginning in a taxable year after the adoption of the relevant county ordinance; provided that no surcharge on state tax may be levied:
(1) Before:
(A) January 1, 2007, if the county surcharge on state tax was established by an ordinance adopted before December 31, 2005;
(B) January 1, 2019, if the county surcharge on state tax was established by the adoption of an ordinance after June 30, 2015, but before June 30, 2018;
(C) January 1, 2020, if the county surcharge on state tax was established by the adoption of an ordinance on or after June 30, 2018, but before March 31, 2019;
(D) January 1, 2024, if the county surcharge on state tax was established by the adoption of an ordinance on or after March 31, 2019, but before August 1, 2023; or
(E) January 1, 2025, if the county surcharge on state tax was established by the adoption of an ordinance on or after August 1, 2023, but before December 31, 2023; and
(2) After
December 31, [2030.] 2045."
SECTION 4. Act 247, Session Laws of Hawaii 2005, as amended by Act 240, Session Laws of Hawaii 2015, as amended by Act 1, Special Session Laws of 2017, 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; and
(3) If an ordinance to levy a county surcharge on state tax is adopted by December 31, 2005:
(A) The ordinance shall be repealed on December 31, 2022; provided that the repeal of the ordinance shall not affect the validity or effect of an ordinance to extend a surcharge on state tax adopted pursuant to an act of the legislature; and
(B) This
Act shall be repealed on December 31, [2030;] 2045; 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; provided that
the amendments made to section 437D-8.4, Hawaii Revised Statutes by Act 226,
Session Laws of Hawaii 2008, as amended by Act 11, Session Laws of Hawaii 2009,
and Act 110, Session Laws of Hawaii 2014, shall not be repealed."
SECTION 5. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.
SECTION 6. This Act shall take effect on May 13, 2040.
Report Title:
County Surcharge on State Tax; General Excise Tax Law; Extension
Description:
Authorizes each county that has established a surcharge on state tax before 7/1/2015 to extend the surcharge until 12/31/2045, at the same rates, if the county does so before 1/1/2028. Provides that no county surcharge on state tax authorized for a county that has not established a surcharge on state tax before 7/1/2015, shall be levied before 1/1/2019, or after 12/31/2045. Repeals certain conditions on the use of surcharges for housing infrastructure costs. Effective 5/13/2040. (SD1)
The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.
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THE SENATE |
S.B. NO. |
492 |
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THIRTY-THIRD LEGISLATURE, 2025 |
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STATE OF HAWAII |
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A BILL FOR AN ACT
relating to general excise tax.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
SECTION 2. Section 46-16.8, Hawaii Revised Statutes, is amended as follows:
1. By amending subsections (b) and (c) to read:
"(b)
Each county that has established a surcharge on state tax before July 1,
2015, under authority of subsection (a) may extend the surcharge until December
31, [2030,] 2045, at the same rates. A county electing to extend this surcharge
shall do so by ordinance; 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 before
January 1, [2018.] 2028.
A county electing to exercise the authority granted under this subsection shall notify the director of taxation within ten days after the county has adopted an ordinance extending the surcharge on state tax. The director of taxation shall levy, assess, collect, and otherwise administer the extended surcharge on state tax.
(c) Each county that has not established a surcharge pursuant to subsection (a) on state tax before July 1, 2015, may establish the surcharge 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; provided that:
(1) No ordinance shall be adopted until the county has conducted a public hearing on the proposed ordinance;
(2) The ordinance shall be adopted before December 31, 2023; and
(3) No county surcharge on state tax that
may be authorized under this subsection shall be levied before January 1, 2019,
or after December 31, [2030.] 2045.
A county electing to exercise the authority granted under this subsection shall notify the director of taxation within ten days after the county has adopted a surcharge on state tax ordinance. Beginning on January 1, 2019, January 1, 2020, January 1, 2024, or January 1, 2025, as applicable pursuant to sections 237-8.6 and 238-2.6, the director of taxation shall levy, assess, collect, and otherwise administer the county surcharge on state tax."
2. By amending subsection (g) to read:
"(g) Each county having a population equal to or less than five hundred thousand that adopts a county surcharge on state tax ordinance pursuant to this section shall use the surcharges received from the State for:
(1) Operating or capital costs of public transportation within each county for public transportation systems, including:
(A) Public roadways or highways;
(B) Public buses;
(C) Trains;
(D) Ferries;
(E) Pedestrian paths or sidewalks; or
(F) Bicycle paths;
(2) Expenses in complying with the Americans with Disabilities Act of 1990 with respect to paragraph (1); and
(3) Housing infrastructure costs; provided
that a county that uses surcharge revenues for housing infrastructure shall not
pass on those housing infrastructure costs to the developer of a housing
project[; provided further that this paragraph shall apply only if a county
amended its surcharge ordinance pursuant to subsection (d) or adopts a county
surcharge on state tax ordinance after December 31, 2022;
provided
that each county having a population equal to or less than five hundred
thousand that adopts a county surcharge on state tax ordinance pursuant to this
section after December 31, 2022, shall use the surcharge revenues received from
the State only for the purposes described in paragraph (3) for county
appropriated housing infrastructure costs]."
SECTION 3. Section 237-8.6, Hawaii Revised Statutes, is amended by amending subsection (b) to read as follows:
"(b) Each county surcharge on state tax that may be adopted, extended, or amended pursuant to section 46-16.8 shall be levied beginning in a taxable year after the adoption of the relevant county ordinance; provided that no surcharge on state tax may be levied:
(1) Before:
(A) January 1, 2007, if the county surcharge on state tax was established by an ordinance adopted before December 31, 2005;
(B) January 1, 2019, if the county surcharge on state tax was established by the adoption of an ordinance after June 30, 2015, but before June 30, 2018;
(C) January 1, 2020, if the county surcharge on state tax was established by the adoption of an ordinance on or after June 30, 2018, but before March 31, 2019;
(D) January 1, 2024, if the county surcharge on state tax was established by the adoption of an ordinance on or after March 31, 2019, but before August 1, 2023; or
(E) January 1, 2025, if the county surcharge on state tax was established by the adoption of an ordinance on or after August 1, 2023, but before December 31, 2023; and
(2) After
December 31, [2030.] 2045."
SECTION 4. Act 247, Session Laws of Hawaii 2005, as amended by Act 240, Session Laws of Hawaii 2015, as amended by Act 1, Special Session Laws of 2017, 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 an ordinance to levy a county surcharge on state tax is adopted by December 31, 2005:
(A) The ordinance shall be repealed on December 31, 2022; provided that the repeal of the ordinance shall not affect the validity or effect of an ordinance to extend a surcharge on state tax adopted pursuant to an act of the legislature; and
(B) This
Act shall be repealed on December 31, [2030;] 2045; 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; provided that
the amendments made to section 437D-8.4, Hawaii Revised Statutes by Act 226,
Session Laws of Hawaii 2008, as amended by Act 11, Session Laws of Hawaii 2009,
and Act 110, Session Laws of Hawaii 2014, shall not be repealed."
SECTION 5. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.
SECTION 6. This Act shall take effect upon its approval.
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INTRODUCED BY: |
_____________________________ |
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Report Title:
County Surcharge on State Tax; General Excise Tax Law; Extension
Description:
Authorizes each county that has established a surcharge on state tax before 7/1/2015 to extend the surcharge until 12/31/2045, at the same rates, if the county does so before 1/1/2028; Provides that no county surcharge on state tax authorized for a county that has not established a surcharge on state tax before 7/1/2015, shall be levied before 1/1/2019, or after 12/31/2045; and Repeals certain conditions on the use of surcharges received from the State for counties having a population equal to or less than 500,000 that adopt a county surcharge on state tax.
The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.
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Date
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Status
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| Dec 8, 2025 | Carried over to 2026 Regular Session. |
| Feb 14, 2025 | Report adopted; Passed Second Reading, as amended (SD 1) and referred to WAM. |
| Feb 14, 2025 | Reported from EIG (Stand. Com. Rep. No. 578) with recommendation of passage on Second Reading, as amended (SD 1) and referral to WAM. |
| Feb 11, 2025 | The committee(s) on EIG recommend(s) that the measure be PASSED, WITH AMENDMENTS. The votes in EIG were as follows: 4 Aye(s): Senator(s) Wakai, Chang, DeCoite, Richards; Aye(s) with reservations: none ; 0 No(es): none; and 1 Excused: Senator(s) Fevella. |
| Feb 7, 2025 | The committee(s) on EIG has scheduled a public hearing on 02-11-25 3:20PM; Conference Room 016 & Videoconference. |
| Jan 21, 2025 | Referred to EIG, WAM. |
| Jan 17, 2025 | Passed First Reading. |
| Jan 17, 2025 | Introduced. |
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Date
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Description
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Location
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Votes
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| Feb 11, 2025 | The committee(s) on EIG recommend(s) that the measure be PASSED, WITH AMENDMENTS | Senate Standing Committee on Energy and Intergovernmental Affairs |
Passed |
This list shows positions taken on this bill by organizations on the date displayed, which is linked to the original source.
Positions by individuals are not included.
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Organization
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Position
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Date
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| County of Kauaʻi | *** Support | Feb 11, 2025 |
| Department of the Hawaiian Home Lands | ** Support | |
| Grassroot Institute of Hawaii | ** Against | |
| Maui County Council | *** Support | Feb 11, 2025 |
| Office of the Mayor of the County of Kauaʻi | ** Support | |
| Office of Planning and Sustainable Development | ** Support |
STAND. COM. REP. NO. 578
Honolulu, Hawaii
RE: S.B. No. 492
S.D. 1
Honorable Ronald D. Kouchi
President of the Senate
Thirty-Third State Legislature
Regular Session of 2025
State of Hawaii
Sir:
Your Committee on Energy and Intergovernmental Affairs, to which was referred S.B. No. 492 entitled:
"A BILL FOR AN ACT RELATING TO GENERAL EXCISE TAX,"
begs leave to report as follows:
The purpose and intent of this measure is to:
(1) Authorize each county that has established a surcharge on state tax before July 1, 2015, to extend the surcharge until December 31, 2045, at the same rates, if the county does so before January 1, 2028;
(2) Provide that no county surcharge on state tax authorized for a county that has not established a surcharge on state tax before July 1, 2015, shall be levied before January 1, 2019, or after December 31, 2045; and
(3) Repeal certain conditions on the use of surcharges received from the State for housing infrastructure costs.
Your Committee received testimony in support of this measure from the Department of the Hawaiian Home Lands, Office of Planning and Sustainable Development, Office of the Mayor of the County of Kauaʻi, one member of the Maui County Council, and one individual.
Your Committee received testimony in opposition to this measure from the Grassroot Institute of Hawaii and one individual.
Your Committee received comments on this measure from the Department of Taxation, Hawaii Food Industry Association, and Tax Foundation of Hawaii.
Your Committee finds that the county surcharge on general excise tax provides the counties with a predictable and sustainable revenue source that can support timely investment in infrastructure projects. Extending the time in which counties may collect surcharge revenues is needed to ensure counties can fund and finance large upfront costs of these infrastructure projects, especially those projects necessary to support housing development to meet the demands of the State's housing shortage.
Your Committee has amended this measure by:
(1) Authorizing counties with a population of less than five hundred thousand that use surcharge revenues for housing infrastructure costs to pass on those costs to the developer of a housing project;
(2) Inserting an effective date of May 13, 2040, to encourage further discussion; and
(3) Making a technical, nonsubstantive amendment for the purposes of clarity and consistency.
Your Committee notes that the intent of this measure is to address Hawaii's housing crisis by continuing to facilitate the development of affordable housing at the county level. Your Committee has heard and acknowledges concerns that this measure may have unintended consequences that were not raised before your Committee during the public hearing. Your Committee finds that these concerns merit further consideration and examination and respectfully requests that subsequent Committees to which this measure is referred, should they choose to deliberate on this measure, consider these issues.
As affirmed by the record of votes of the members of your Committee on Energy and Intergovernmental Affairs that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 492, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 492, S.D. 1, and be referred to your Committee on Ways and Means.
Respectfully submitted on behalf of the members of the Committee on Energy and Intergovernmental Affairs,
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________________________________ GLENN WAKAI, Chair |
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Date
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Testimony PDF
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| Feb 11, 2025 | SB492_TESTIMONY_EIG_02-11-25_.PDF |
Discussed in Hearing
1MIN
Senate Standing Committee on Economic Development and Tourism
1MIN
Senate Standing Committee on Energy and Intergovernmental Affairs
Bill Author
Bill Co-Author(s):
