House Transportation and Finance Committees Pass Rail Funding Bill

The House of Representatives committees on Transportation and Finance today passed SB4, a critical step in moving the bill forward to provide the funds needed to complete the City’s rail project.

Senate Bill 4 Report Title:  County Surcharge on State Tax; Extension; Transient Accommodations Tax; Appropriations:

Authorizes a county that has adopted a surcharge on state tax to extend the surcharge to 12/31/2030. Authorizes a county to adopt a surcharge on state tax before 3/31/2018, under certain conditions. Decreases from 10% to 1% the surcharge gross proceeds retained by the State. Allows the director of finance to pay revenues derived from the county surcharge under certain conditions. Clarifies uses of surcharge revenues. Establishes a mass transit… (See bill for full description.)

Stakeholders and the public testified at the State Capitol today including City, State and HART officials before both committees voted to pass the bill. Transportation voted 4 to 2 in favor with one excused, and Finance voted 8 to 6 in favor of the bill with one excused.

Transportation members voting yes were: Henry Aquino, Nadine Nakamura, Joy San Buenaventura (with reservations), and Bob McDermott. Voting no were: Sean Quinlan and Tom Brower. Mark Hashem was excused.

Finance members voting yes were: Sylvia Luke, Ty J.K. Cullen, Cedric Asuega Gates, Daniel Holt, Jarrett Keohokalole, Matt LoPresti, Nadine Nakamura and Kyle Yamashita. Voting no were: Romy Cachola, Bertrand Kobayashi, Lynn DeCoite, Nicole Lowen, Andria Tupola and Gene Ward. Beth Fukumoto was excused.

The bill contains two funding mechanisms: a three-year extension of the 0.5 % GET surcharge on Oahu and a 13-year 1% increase in the TAT statewide. This bill ensures that the City’s rail project will be sufficiently funded and reaches Ala Moana.

Finance Committee Chair Sylvia Luke said the bill also mandates accountability for hard-earned taxpayer money.

“This bill will provide enough money to fund the City’s rail project to Ala Moana and require the City to be transparent about how they are spending that taxpayer money,” Rep. Luke said.

The bill provides accountability by requiring a state-run audit and annual financial reviews of the rail project, and requires the State Comptroller to certify HART’s invoices for capital costs. The bill also requires the Senate President and the House Speaker to each appoint two non-voting, ex-officio members to the HART board of directors.

Transportation Committee Chair Henry Aquino said not depending solely on the GET to fund rail will save taxpayer money.

“By adding the hotel room tax to the mix, which provides and immediate cash flow to the project, we are saving taxpayers hundreds of millions of dollars that would be spend on financing fees,” Rep. Aquino said.

The bill now moves to the full House for a vote on second reading tomorrow.

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