HomeMy WebLinkAboutCOM 0480.005 1998-2000
12-02-99 11:65 From-THE GAS 00~7PANY 9096366943 T-414 P 02/06 F-198
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TESTIMONY BEFORE THE HAWAII COUNTY COUNCIL
ON
BILL 143 (Draft 2), RELATING TO REAL PROPERTY
TAXES
BY
STEVEN P. GOLDEN
THE GAS COMPANY, CITIZENS ENERGY SERVICES
WEDNESDAY, DECEMBER 1, 1999
Chairman Arakaki and'vlembers of the Hawaii County Council:
I am Steven Golden, Manager of Government Affairs & Planning
for The Gas Company, testifying on Bill 143 (Draft 2), relating to
real property taxes.
Bill 143 would eliminate The Gas Company's current real property
tax exemption granted under Chapter 239, HRS for public service
companies, which pay the public service company tax to the State
in lieu of real property taxes.
For your information, The Gas Company's utility division pays
8.885 % of its revenues in taxes either to the State or County
(Attachment II). This is over twice the amount collected from other
private companies.
The State collects:
• A Public Service Company Tax which is equal to 5.885%
of gross revenues. This tax was specially enacted in Iteu of
all taxes other than income taxes including real property
taxes
• A Public [;tility Fee which of O.S% of gross revenues
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Ref. To: Cev~+ua_
Ref. Date UEC 11999 _
12-02-99 11:55 From-THE GAS COHiPAAY 8095355943 T-414 P 03/05 F-198
The County of Hawaii collects:
• A Franchise Fee which is equal to 2.5% of gas sales
revenues (Attachment II)
The Gas Company is concerned that if we are required to continue
to pay our existing level of revenue taxes as well pay real property
taxes, this would be tantamount to double taxation. Legitimately
assessed taxes are properly allowable as a pass through to utility
consumers, who would end up paying higher utility bills.
As an alternative to Bill 143 (Draft 2), we support an amended
version of the State legislation (Senate Bill No. 1364) contained in
the 2000 Hawaii State Association of Counties (HSAC) Legislative
Package. This state legislation would apportion to the counties the
part of the public service company tax in excess of 4 percent.
The Gas Company supports the HSAC proposal provided it is
amended to ensure real property taxes are not imposed by the
County. Under the HSAC approach, The Count) of Hawaii would
receive $45,000 more from The Gas Company than it would if a
real property tax is imposed and it would avoid the administrative
costs of assessing utility real property.
Tn summary, we recommend that Bill 143 (Draft 2) be filed and
that the HSAC proposal with the amendment suggested above
be supported.
Thank you for the opportunity to testify on Bill 143 (Draft 2).
Attachments (Z)
12-02-88 11:55 From-THE GAS COMPAPlY 8085355043 T-414 P 04/05 F-133
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12-02-96 11:66 From-THE GAS COHIPAPIY 6089355843 T-414 P OS/09 F-168
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THE C.,iS Ct7MPANY
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January 18. 1999
Couary of Hawaii
pirector of Finance
Hilo, HI 96720
Dear ~~r:
Enclosed is our check to the amount of 582.476.96, being the Franchise Tax due
on 1998 utility gas sales. computed as follows:
53,299.078.31 a' 3 !4%=582,476.96
~~~truL~yo rs.
/ /with
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vjce President d: General ~Ianaeer
Enciosure
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