HomeMy WebLinkAboutCOM 0899.009 2014-2016 PJFG
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Murashige, Laura
From: Laurie Taka <Itaka@hawaiicountyfcu.com>
Sent: Tuesday, May 31, 2016 9:51 AM
To: Council Testimony
Subject: Public Testimony, Bill 212
Attachments: Testimony Regarding Bill 121.doc
We are submitting our testimony opposing Bill 212 as attached.
Laurie Taka
Hawaii County Employees FCU
President/General Manager
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Comm. No.
Ref. To: flirC7-
Ref. Date JUN 0 2 2016
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TESTIMONY OF THE
HAWAII COUNTY EMPLOYEES FEDERAL CREDIT UNION
PRESENTED TO THE COMMITTEE ON FINANCE
HAWAI`I COUNTY COUNCIL
June 1, 2016
TESTIMONY ON BILL NO. 212-DRAFT 1, REFERENCE COMMUNICATION NO. 899
AMENDING CHAPTER 19, ARTICLE 10, SECTIONS 19-77 AND 19-89.2 OF THE
HAWAII COUNTY CODE 1983 (2005 EDITION, AS AMENDED) RELATING TO
REAL PROPERTY TAXES
TO THE HONORABLE KAREN EOFF, CHAIRPERSON
AND MEMBERS OF THE COMMITTEE ON FINANCE
My name is Laurie Taka, General Manager of the Hawaii County Employees Federal
Credit Union. I appreciate the opportunity to provide written testimony in opposition to Council
Bill No. 212, which seeks to repeal the real property tax exempt status of credit unions within the
County of Hawai`i.
With the introduction of this Bill by Councilmember Wille, we are not made privy to the
reasons which prompted the introduction of this particular piece of legislation, which leaves our
island credit unions at a significant disadvantage. So the only thing we can do is to provide you
with an explanation of what makes your island credit unions an important part of the foundation
that supports communities throughout the island of Hawai`i.
The first credit union in the state began on this island in the mid 1930s,the Big Island
Teachers' Federal Credit Union, which helped its teacher members with loans and other financial
services during the middle of the Great Depression. Credit unions are member-owned,not-for-
profit financial cooperatives that provide savings, credit and other financial services to their
members who share a common bond by belonging to a specific community, organization,
religion or place of employment. Credit unions pool their members' savings deposits and shares
to finance their own loan portfolios rather than rely on outside capital, typically through banks.
All gains are then returned to its members.
The section of Federal income tax law concerning not-for-profits states that credit unions
must"operate without profit and for the mutual benefit of its members". The income tax
privileges are not simply bestowed upon federal credit unions with no expectation of any benefits
in return. Federal law requires that all income tax-exempt organizations like Federal credit
unions be either non- or not-for-profit, meaning that all gains are returned to or exercised for the
sole benefit of its members. There are no stockholders or corporations that own our island's
credit unions. All credit unions are owned by its member depositors, who then all equally share
in any gains provided by their credit unions.
Testimony to the Committee on Finance
Hawai`i County Council
June 1, 2016
Page 2
Look at the very section of your own real property tax code that deals with Exemptions
(Article 10, Chapter 19, HCC). Some types of properties exempt from real property taxes
include:
• Schools • Property dedicated to public use
• Hospitals and nursing homes • Property owned by any nonprofit organization
• Churches • Historic residential properties for preservation
• Cemeteries • Hawaiian Home lands
Each of these tax exempt properties provide an important civic or social function in our
island society. Why are our island's credit unions being treated differently when our mission is
to provide for the same civic or social benefits?
Credit unions provide a unique choice for financial services to our island residents.
Bill No. 212, if adopted, will take away opportunities for credit unions to maintain its distinction
from typical financial institutions like banks. There was once about 200 credit unions located
throughout the state. That number has now dwindled to less than 70. When survival in the
financial services sector is more difficult than it has ever been, please do not stack more straw on
the backs of our credit union members.
On behalf of your island's credit unions and for the sake of its members,most of whom
are residents of this island, we humbly request that the Hawai`i County Council not adopt Bill
No. 212.
Thank you all for your kind and thoughtful consideration.
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