HOUSE OF REPRESENTATIVES

H.B. NO.

1211

THIRTY-SECOND LEGISLATURE, 2023

H.D. 1

STATE OF HAWAII

 

 

 

 

 

 

A BILL FOR AN ACT

 

 

RELATING TO CONVEYANCE TAX.

 

 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

 

     SECTION 1.  Chapter 346, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

     "§346-     Homeless services fund.  (a)  There is established within the state treasury a homeless services fund, into which shall be deposited:

     (1)  Ten per cent of the conveyance tax collected and allocated to the homeless services fund as provided by section 247-7; and

     (2)  Appropriations made by the legislature to the fund.

     (b)  Moneys from any other private or public source may be deposited in or credited to the fund; provided that mandates, regulations, or conditions on these funds do not conflict with the use of the fund under this section.  Moneys received as a deposit or private contribution shall be deposited, used, and accounted for in accordance with the conditions established by the agency or person making the contribution.

     (c)  The homeless services fund shall be administered and managed by the department.  Moneys in the homeless services fund shall be expended for homeless services and supportive housing, including homeless facilities programs for the homeless authorized by the department.

     (d)  The department shall submit an annual report to the legislature no later than twenty days before the convening of each regular session.  The report shall include, at a minimum, a detailed account of all funds received and all moneys disbursed out of the homeless services fund."

     SECTION 2.  Section 247-2, Hawaii Revised Statutes, is amended to read as follows:

     "§247-2  Basis and rate of tax.  The tax imposed by section 247-1 shall be based on the actual and full consideration (whether cash or otherwise, including any promise, act, forbearance, property interest, value, gain, advantage, benefit, or profit), paid or to be paid for all transfers or conveyance of realty or any interest therein, that shall include any liens or encumbrances thereon at the time of sale, lease, sublease, assignment, transfer, or conveyance, and shall be at the following rates:

     (1)  Except as provided in paragraph (2):

          (A)  Ten cents per $100 for properties with a value of less than $600,000;

          (B)  Twenty cents per $100 for properties with a value of at least $600,000, but less than $1,000,000;

          (C)  Thirty cents per $100 for properties with a value of at least $1,000,000, but less than [$2,000,000;] $1,500,000;

          (D)  Fifty cents per $100 for properties with a value of at least [$2,000,000,] $1,500,000, but less than [$4,000,000;] $2,000,000;

          (E)  Seventy cents per $100 for properties with a value of at least [$4,000,000,] $2,000,000, but less than [$6,000,000;] $4,000,000;

          (F)  [Ninety cents] One dollar per $100 for properties with a value of at least [$6,000,000,] $4,000,000, but less than [$10,000,000; and] $6,000,000;

          (G)  One dollar and fifty cents per $100 for properties with a value of at least $6,000,000, but less than $10,000,000 [or greater]; [and]

          (H)  Three dollars per $100 for properties with a value of at least $10,000,000, but less than $14,000,000;

          (I)  Five dollars per $100 for properties with a value of at least $14,000,000, but less than $19,000,000;

          (J)  Eight dollars per $100 for properties with a value of at least $19,000,000, but less than $24,000,000; and

          (K)  Ten dollars per $100 for properties with a value of $24,000,000 or greater; and

     (2)  For the sale of a condominium or single family residence for which the purchaser is ineligible for a county homeowner's exemption on property tax:

          (A)  Fifteen cents per $100 for properties with a value of less than $600,000;

          (B)  Twenty-five cents per $100 for properties with a value of at least $600,000, but less than $1,000,000;

          (C)  Forty cents per $100 for properties with a value of at least $1,000,000, but less than [$2,000,000;] $1,500,000;

          (D)  [Sixty] Seventy-five cents per $100 for properties with a value of at least [$2,000,000,] $1,500,000, but less than [$4,000,000;] $2,000,000;

          (E)  [Eighty-five] One dollar and fifteen cents per $100 for properties with a value of at least [$4,000,000,] $2,000,000, but less than [$6,000,000;] $4,000,000;

          (F)  [One dollar and ten cents] Two dollars per $100 for properties with a value of at least [$6,000,000,] $4,000,000, but less than [$10,000,000;] $6,000,000; [and]

          (G)  [One dollar and twenty-five cents] Three dollars per $100 for properties with a value of at least $6,000,000, but less than $10,000,000 [or greater,];

          (H)  Four dollars per $100 for properties with a value of at least $10,000,000, but less than $14,000,000;

          (I)  Seven dollars per $100 for properties with a value of at least $14,000,000, but less than $19,000,000;

          (J)  Ten dollars per $100 for properties with a value of at least $19,000,000, but less than $24,000,000; and

          (K)  Twelve dollars per $100 for properties with a value of $24,000,000 or greater,

of [such] the actual and full consideration; provided that in the case of a lease or sublease, this chapter shall apply only to a lease or sublease whose full, unexpired term is for a period of five years or more, and in those cases, including (where appropriate) those cases where the lease has been extended or amended, the tax in this chapter shall be based on the cash value of the lease rentals discounted to present day value and capitalized at the rate of six per cent, plus the actual and full consideration paid or to be paid for any and all improvements, if any, that shall include on-site as well as off-site improvements, applicable to the leased premises; [and] provided further that the tax imposed for each transaction shall be [not] no less than $1."

     SECTION 3.  Section 247-3, Hawaii Revised Statutes, is amended to read as follows:

     "§247-3  Exemptions.  The tax imposed by section 247-1 shall not apply to:

     (1)  Any document or instrument that is executed prior to January 1, 1967;

     (2)  Any document or instrument that is given to secure a debt or obligation;

     (3)  Any document or instrument that only confirms or corrects a deed, lease, sublease, assignment, transfer, or conveyance previously recorded or filed;

     (4)  Any document or instrument between husband and wife, reciprocal beneficiaries, or parent and child, in which only a nominal consideration is paid;

     (5)  Any document or instrument in which there is a consideration of $100 or less paid or to be paid;

     (6)  Any document or instrument conveying real property that is executed pursuant to an agreement of sale, and where applicable, any assignment of the agreement of sale, or assignments thereof; provided that the taxes under this chapter have been fully paid upon the agreement of sale, and where applicable, upon [such] the assignment or assignments of agreements of sale;

     (7)  Any deed, lease, sublease, assignment of lease, agreement of sale, assignment of agreement of sale, instrument or writing in which the United States or any agency or instrumentality thereof or the State or any agency, instrumentality, or governmental or political subdivision thereof are the only parties thereto;

     (8)  Any document or instrument executed pursuant to a tax sale conducted by the United States or any agency or instrumentality thereof or the State or any agency, instrumentality, or governmental or political subdivision thereof for delinquent taxes or assessments;

     (9)  Any document or instrument conveying real property to the United States or any agency or instrumentality thereof or the State or any agency, instrumentality, or governmental or political subdivision thereof pursuant to the threat of the exercise or the exercise of the power of eminent domain;

    (10)  Any document or instrument that solely conveys or grants an easement or easements;

    (11)  Any document or instrument whereby owners partition their property, whether by mutual agreement or judicial action; provided that the value of each owner's interest in the property after partition is equal in value to that owner's interest before partition;

    (12)  Any document or instrument between marital partners or reciprocal beneficiaries who are parties to a divorce action or termination of reciprocal beneficiary relationship that is executed pursuant to an order of the court in the divorce action or termination of reciprocal beneficiary relationship;

    (13)  Any document or instrument conveying real property from a testamentary trust to a beneficiary under the trust;

    (14)  Any document or instrument conveying real property from a grantor to the grantor's revocable living trust, or from a grantor's revocable living trust to the grantor as beneficiary of the trust;

    (15)  Any document or instrument conveying real property, or any interest therein, from an entity that is a party to a merger or consolidation under chapter 414, 414D, 415A, 421, 421C, 425, 425E, or 428 to the surviving or new entity;

    (16)  Any document or instrument conveying real property, or any interest therein, from a dissolving limited partnership to its corporate general partner that owns, directly or indirectly, at least a ninety per cent interest in the partnership, determined by applying section 318 (with respect to constructive ownership of stock) of the federal Internal Revenue Code of 1986, as amended, to the constructive ownership of interests in the partnership; [and

  [](17)[]]    Any document or instrument that conforms to the transfer on death deed as authorized under chapter 527[.];

    (18)  Any document or instrument conveying real property for the development or acquisition of affordable housing for qualified persons and subject to a government assistance program approved and certified by the Hawaii housing finance and development corporation and administered or operated by the corporation, or any of its instrumentalities, corporate or otherwise; provided that:

          (A)  If the real property is not developed or acquired for affordable housing pursuant to this paragraph; or

          (B)  If the affordable housing developed or acquired pursuant to this paragraph is not retained,

          the exemption shall not apply, and the tax imposed by section 247-1 shall be levied pursuant to law.  As used in this paragraph:

              "Affordable housing" has the same meaning as in section 201H-57.

              "Qualified person" means an individual who has no ownership interest in any real property;

    (19)  Any document or instrument conveying real property with a value of less than $2,000,000 to first-time homebuyers who:

          (A)  Have resided in the State for at least five years; and

          (B)  Will occupy the real property as their primary residence; and

    (20)  Any document or instrument conveying real property to a nonprofit organization that:

          (A)  Is exempt from the federal income tax by the Internal Revenue Service; and

          (B)  Will hold the property in an undeveloped state and for conservation purposes in perpetuity."

     SECTION 4.  Section 247-7, Hawaii Revised Statutes, is amended to read as follows:

     "§247-7  Disposition of taxes.  All taxes collected under this chapter shall be paid into the state treasury to the credit of the general fund of the State, to be used and expended for the purposes for which the general fund was created and exists by law; provided that of the taxes collected each fiscal year:

     (1)  Ten per cent [or $5,100,000, whichever is less,] shall be paid into the land conservation fund established pursuant to section 173A-5; and

     (2)  Fifty per cent [or $38,000,000, whichever is less,] shall be paid into the rental housing revolving fund established by section 201H-202[.]; and

     (3)  Ten per cent shall be paid into the homeless services fund established pursuant to section 346-   ."

     SECTION 5.  Statutory material to be repealed is bracketed and stricken.  New statutory material is underscored.

     SECTION 6.  This Act shall take effect on June 30, 3000.

 

 

 

Report Title:

Conveyance Tax Rates and Exemptions; Homeless Services Fund; Land Conservation Fund; Rental Housing Revolving Fund; Allocations

 

Description:

Increases the conveyance tax rate for certain properties.  Exempts conveyances of certain real property from the conveyance tax.  Establishes the homeless services fund.  Eliminates the cap on the amount of conveyance tax collections allocated to the land conservation fund and rental housing revolving fund.  Allocates ten percent of conveyance tax collections to the homeless services fund.  Effective 6/30/3000.  (HD1)

 

 

 

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