HomeMy WebLinkAboutCOM 0480.004 1998-2000 WEST HAWAII UTILITIES
Testimony before the County Council
County of Hawaii
December 1,1999
By Robert Spetich c~~ t~"~"^-..
General Manager, West Hawaii Utilities
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Regarding Do ~ ~°""~y coo"Gi
Ordinance Bill No. 143 Amending Chapter 19 of the Hawaii County Code
1983 (1995 Edition), Relating to Real Property Tax Exemptions
Chairman Arakaki and members of the Council:
Good morning. My name is Robert Spetich. I am General Manager of West Hawaii Utilities
(WHU). WHU is comprised of three companies; West Hawaii Water Company, West Hawaii
Sewer Company and West Hawaii Utility Company. These utilities provide water, sewer, and
sewage treatment utilities to the Waikoloa Village and Waikoloa Resort area.
We pay a Public Service Company tax (PSC tax) to the State of Hawaii in lieu of county real
property taxes and the State general excise tax pursuant to Chapter 239, Hawaii Revised
Statutes.
Bill 143 seeks to remove the real property tax exemption for utilities serving the County of
Hawaii. We oppose this measure because it will result in double taxation for utilities such as
WHU, and higher rates for residents and businesses that aze our customers.
We understand the County's desire to obtain its proportionate shaze of the PSC tax from the
State to make up for the real property taxes it is now exempting. We hope the counties and
State can eventually agree on a fair and equitable solution to this problem. However, until
then, it is unreasonable that utility companies should be assessed real property taxes at both the
county and state levels.
History tells us that it is difficult to administer a traditional real property tax on utilities. The
PSC tax (a revenue-based tax) replaced the real property tax on utilities due to the difficulty
associated with determining and administering assessments on utility property, including
infrastructure, easements, and rights of way. Hence, the cost of assessing public utility real
property tax values will approach, if not exceed, the cost of administering a revenue-based tax. ~
Summarizing: ~
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• WHU strongly oppose Bill 143 because revocation of the public utility real property tax ~ ~ S
exemption would result in an unjustified increase in rates for our customers and double 0 ~
taxation for the utilities; and °p ~ m
• WHU urge the County to pursue sharing the PSC tax revenue at the State legislature as a ~ V
fair, efficient, and equitable solution for people and businesses of the County of Hawaii. c = d I
Thank you for the opportunity to offer our testimony on this matter. Z o o a
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150 Waikoloa Beach Drive •Waikoloa, Hawaii 96738 • Phone (808) 886-1000 • Fax (808) 886-8565 ~ ~ ~ ~
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