Report Title:
State Foundation on Culture and the Arts; Income Tax Deduction
Description:
Repeals the state foundation on culture and the arts and the works of art special fund. Provides a tax deduction for private persons to acquire works of art to be displayed in a private nonresidential building that is open to the public, not exceeding 1% of annual renovation or construction costs.
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THE SENATE |
S.B. NO. |
2204 |
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TWENTY-FIRST LEGISLATURE, 2002 |
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STATE OF HAWAII |
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A BILL FOR AN ACT
relating to the Arts and culture.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
SECTION 1. The legislature finds that the state foundation on culture and the arts is the functional equivalent of an artistic monopoly, in which state officials dictate the artistic choices to be funded in supporting the arts. The legislature finds that these decisions are better left to the private sector.
The legislature further finds that the one per cent of appropriations for capital improvements for the construction or renovation of state buildings, which is transferred to the works of arts special fund for the acquisition of works of art for those buildings, has adequately served its purpose in promoting the arts and culture in Hawaii.
The legislature finds, however, that the works of arts special fund, under which the state foundation on culture and the arts and the comptroller decide on the specific art objects to be acquired under that fund, was never intended to serve in perpetuity as an artistic welfare program.
While the State has done a great deal in furthering and promoting culture and the arts in Hawaii through the state foundation on culture and the arts and the works of art special fund, it is now time to allow the private sector to assume control over this essentially private function.
Accordingly, the purpose of this Act is to:
(1) Repeal the state foundation on culture and the arts and the works of art special fund; and
(2) Provide an income tax deduction for private persons to acquire works of art to be displayed in private nonresidential buildings that are open to the public, in an amount not exceeding one per cent of the private building's annual renovation or construction costs.
SECTION 2. Chapter 235, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:
"§235- Deductions for works of art in private buildings. (a) In addition to the deductions allowed under section 235-7, in computing taxable income, there shall be allowed as a deduction from gross income or adjusted gross income any amounts that are used by any state resident for the purchase of works of art as provided in this section. The total amount of the allowable deduction shall not exceed one per cent of the cost of construction or renovation of the private building. The cost of construction or renovation shall be the amount stated on the building permit obtained from the county for the construction of any new private building, or for the renovation of any existing private building, where the value of construction or renovation is not less than $ .
(b) Purchases for works of art shall include the following:
(1) Costs related to the acquisition of works of art, including any consultant or staff services;
(2) Site modifications, display, and interpretive work necessary for the exhibition of works of art;
(3) Upkeep services, including maintenance, repair, and restoration of works of art; and
(4) Storing and transporting works of art.
(c) The person that purchases a work of art under this section shall have sole discretion as to the type of art work to be acquired and displayed, including selecting the work, commissioning the artists, reviewing the design and execution of the work, accepting the work, and specifying the location and placement in which the art is to be displayed; provided that:
(1) The work of art shall be displayed in an area of the private building that is open to the general public; and
(2) The work of art shall be produced by a resident, as that term is defined in section 235-1.
(d) As used in this section:
"Private building" means any building in this State that is owned or leased, in whole or in part, by one or more private persons or entities, and which is open to the public; provided that the term does not include a private residence or other private dwelling."
SECTION 3. Section 40-88, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:
"(a) There shall be established as a separate fund of the Honolulu symphony trust created by the trust agreement dated December 5, 1986, a fund to be known as the State of Hawaii endowment fund. The income and capital gains from the $2,000,000 contributed by the State of Hawaii shall be transferred on a quarterly basis to the [state foundation on culture and the arts, performing and visual arts events private contribution account] general fund to be used for the production of music by an Oahu-based symphony orchestra as determined by [the state foundation on culture and the arts.] comptroller. The State of Hawaii endowment fund shall be subject to the restrictions that:
(1) No part of the principal amount contributed to the fund by the State or by matching grants shall be used for operations of the Honolulu symphony;
(2) Income and capital gains from the fund shall not be distributed for use in the operations of the Honolulu symphony during any period that the value of the fund shall be less than the principal amounts contributed to the fund; and
(3) The amounts contributed to the fund by the State shall revert to the State to the extent that matching or other conditions to the grant of the funds are not met, and the fund also shall be subject to additional restrictions as may be imposed with respect to transfers of funds in future legislation appropriating sums to be contributed to the fund."
SECTION 4. Chapter 9, Hawaii Revised Statutes, is repealed.
SECTION 5. Section 103-8.5, Hawaii Revised Statutes, is repealed.
["§103-8.5 Works of art special fund. (a) There is created a works of art special fund, into which shall be transferred one per cent of all state fund appropriations for capital improvements designated for the construction cost element; provided that this transfer shall apply only to capital improvement appropriations that are designated for the construction or renovation of state buildings.
(b) The works of art special fund shall be used solely for the following purposes:
(1) Costs related to the acquisition of works of art, including any consultant or staff services required to carry out the art in public places and relocatable works of art programs;
(2) Site modifications, display, and interpretive work necessary for the exhibition of works of art;
(3) Upkeep services, including maintenance, repair, and restoration of works of art;
(4) Storing and transporting works of art.
(c) The one per cent amount, which is included in all capital improvement appropriations, shall be calculated at the time the appropriation bills are signed into law. The moneys shall be transferred into the works of art special fund upon availability of moneys from the appropriations. Each agency receiving capital improvement appropriations shall calculate the one per cent amount and transfer the moneys into the works of art special fund.
(d) The comptroller and the state foundation on culture and the arts shall decide on the specific art objects to acquire, giving first consideration to placing appropriate pieces of art at the locations of the original appropriation.
The selection of, commissioning artists for, reviewing of design, execution, and placement of, and the acceptance of works of art shall be the responsibility of the comptroller and the state foundation on culture and the arts in consultation with the affected agency or department.
Expenditures from the works of art special fund shall be made by the comptroller.
(e) The comptroller shall:
(1) Provide each agency receiving capital improvement appropriations with information regarding items that shall be included and excluded from the one per cent amount;
(2) Ensure that each agency calculates its one per cent amount correctly; and
(3) Ensure that each agency transfers the correct amount to the works of art special fund in a timely manner.
(f) The comptroller and the executive director shall track amounts due from each agency under the one per cent requirement as provided in this section."]
SECTION 6. Notwithstanding any law to the contrary:
(1) All unencumbered and unexpended moneys remaining in the works of art special fund established pursuant to section 103-8.5, Hawaii Revised Statutes, on June 30, 2002, shall be transferred to the state general fund;
(2) Any amounts that continue to be owing on any contract entered into pursuant to section 9-15, Hawaii Revised Statutes, prior to the repeal of chapter 9, Hawaii Revised Statutes, shall be paid out of state general fund moneys; and
(3) Section 2 of this Act shall apply only to private buildings, as that term is defined in that section, for which a permit for construction or renovation has been issued after the effective date of this Act.
SECTION 7. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.
SECTION 8. This Act shall take effect on July 1, 2002; provided that section 2 of this Act, upon its approval, shall apply to taxable years beginning after December 31, 2001.
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INTRODUCED BY: |
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