HomeMy WebLinkAboutCOM 0813.014 1998-2000
Stephen K Yatnashiro Richard Wurdeman
Mayor --L-` _ Corporation Counsel
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OFFICE OF THE CORPORATION COUNSEL
101 Aupuni Street. Suite 325 - Hilo. Hawaii 967204262 . (808) 961-8251 F. (808) 961.8622,
September 1, 2000
Galen T. Nakamura, Esq.
Office of the County Attorney
4444 Rice Street, Room 220
Lihue, Hawaii 96766
Christine Kurashige, Esq.
Department of the Corporation Counsel
842 Bethel Street
Honolulu, Hawaii 96813
Brian T. Moto, Esq.
Department of the Corporation Counsel
200 S. High Street
Wailuku, Hawaii 96793
Dear Counsels:
The County of Hawaii met with the State of Hawaii and the major public utilities in Tax
Appeal Court Judge Gary Chang's court on August 31, 2000. I had earlier faxed to you a copy of
the settlement that was placed on the record. As part of the settlement, the court is seeking
concurrence by the other counties. As you can see, he is seeking an answer from the counties by
next Friday, or he will request their presence at a settlement conference, along with the Mayors
or someone with authority to bind the respective counties.
I will try to list the salient features of this agreement as they would affect your counties:
1) Section 239-5, HRS, would be amended to delete reference to "in lieu of real
property tax" and to reduce the public service company tax to 4%.
2) Legislation would be introduced to allow the counties to tax the utilities at a rate
of 1.885% up to 4.2% in lieu of real property tax, based on the formulation as
currently set forth in Section 239-5, HRS (hereinafter 1.885%). All utilities
currently pay at the 1.885% rate.
Comm. i'N ~3' 0~l~''~
File No.14a
Ref. To: )a COZ1hC / l
Ref. Date SEP 0 5 20M
Galen T. Nakamura, Esq., et al.
Page -2-
September 1, 2000
3) The counties will each collect this tax based on the gross revenues that are
generated in each county and the counties will accept the filings that the utilities
make to the State in the payment of the public service company tax. In other
words, the counties will not individually challenge the utilities' filings. (The
electric and gas companies already make filings to the counties for the payment of
their franchise tax, which tax the utilities for the use of county rights-of-way.)
4) Each county will need to pass legislation to accept this tax of 1.885% of gross
revenues of the utilities as the tax in lieu of real property tax.
5) The counties will support legislation at the upcoming legislative session to bring
this transfer of the tax to the counties.
6) The counties will waive any claims against the State for refund of past taxes due.
(The State has sovereign immunity from such causes of actions, anyway.)
Those are the main points for your decision-makers to consider. We anticipate that if
everything goes as planned, the counties will receive these payments starting from July 1, 2001.
There is a very short fuse on this matter as Judge Chang would like some indication as to
each county's position by Friday, September 8, 2000. As I'm doing for the County,of Kauai, I am
available to meet with your Mayors or councils, to try and answer any questions that they have.
Please call me if you have any questions.
Sincerely,
=D T SE
Deputy Corporation Counsel
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a:\kamikawa\ltrcorpcounsels. wpd
cc: Mayor Stephen K. Yamashiro
Mayor Maryanne W. Kusaka
Mayor Jeremy Hams
Mayor James Apana
Council Chair James Y. Arakaki
Director of Finance Dixie Kaetsu