Wednesday, July 17, 2024
Hawai'i Free Press

Current Articles | Archives

Sunday, March 17, 2019
Blank the Amount, Defect the Date
By Tom Yamachika @ 5:00 AM :: 6202 Views :: Education K-12, Ethics, Higher Education, Taxes

Blank the Amount, Defect the Date

by Tom Yamachika, President, Tax Foundation Hawaii

If you’re following bills as they move through our legislature, there are a couple of practices that we need you to know about. Often, committee chairs will refer to one or both of these practices when they move bills forward.

Each bill must have an effective date so that we know when it starts doing what it is supposed to if it’s signed into law. Typically, income tax bills become effective for tax years beginning after a certain date. Excise tax bills usually become effective on July 1st to coincide with the start of the State’s fiscal year. “Defect the date” refers to setting the effective date very far in the future, such as July 1, 2050, so the bill would have no effect if enacted into law in that form. A bill with such an effective date is still alive, but the legislators are not comfortable enough with it to let it pass in that form. Instead, they are willing to let the bill survive for now “so that the discussion can continue,” but they want to take a look at it again, perhaps in conference committee, before deciding whether to send the bill to the Governor’s desk.

“Blank the amount” is a similar technique that can be used whenever a bill has a number in it. The technique is often used on an appropriation bill that sets aside a certain amount of money to do what the bill proponents want. It can also be used to earmark tax revenues, as is done with SB 1474 Senate Draft 2 that proposes an increase in the GET. The bill now specifies that “__ per cent or $ _____, whichever is greater, of the revenues shall be deposited into a special account in the general fund for appropriation to and expenditure for operations of the department of education.” A similar clause is provided for operations of the University of Hawaii.

Obviously, bills with blank amounts in them won’t have much of an effect if they are enacted in that form, even if they have an effective date that is not defective.

(We actually enacted such a bill in 1999. Act 306 of 1999 enacted credits for the construction or renovation of a “qualified resort facility” and a “qualified general facility.” The credit amounts were percentages of the capitalized costs but were left blank. The Department then refused to allow any credit under these circumstances, as it explained in Department of Taxation Announcement No. 99-27.)

Bills with blank amounts perhaps serve the same purpose as bills with defective effective dates, but the blank amounts are quite a bit more problematic.

First, it’s easy to imagine that what goes in the blank will have a difference in our lawmakers’ willingness to vote for the bill. A lawmaker who might be willing to stomach an increase in the base GET rate from 4% to 4.5%, for example, might be outraged enough to hit the “No” button if the bill’s proponents wanted to fill in the blank with 7%.

Next, the Department of Taxation normally calculates the revenue impact of a tax or credit bill, because that information is important to lawmakers. If such a bill has a blank amount in it, it would be easy for the Department economists to throw up their hands and say, “We have no idea! Obviously, it would depend on what you guys put in the blank.”

It is common for the defective dates to be fixed, and for the blank amounts to be filled in, when a bill pops out of conference committee. At that point, of course, the deal is done and there is no opportunity for public hearings or testimony. The public can still weigh in on the process by contacting individual legislators in hopes of swaying their votes on the floor, but for many of us that seems to be a waste of effort.

Can the system be improved?

We hope so!


TEXT "follow HawaiiFreePress" to 40404

Register to Vote


Aloha Pregnancy Care Center


Antonio Gramsci Reading List

A Place for Women in Waipio

Ballotpedia Hawaii

Broken Trust

Build More Hawaiian Homes Working Group

Christian Homeschoolers of Hawaii

Cliff Slater's Second Opinion

DVids Hawaii


Fix Oahu!

Frontline: The Fixers

Genetic Literacy Project

Grassroot Institute

Hawaii Aquarium Fish Report

Hawaii Aviation Preservation Society

Hawaii Catholic TV

Hawaii Christian Coalition

Hawaii Cigar Association

Hawaii ConCon Info

Hawaii Debt Clock

Hawaii Defense Foundation

Hawaii Family Forum

Hawaii Farmers and Ranchers United

Hawaii Farmer's Daughter

Hawaii Federation of Republican Women

Hawaii History Blog

Hawaii Jihadi Trial

Hawaii Legal News

Hawaii Legal Short-Term Rental Alliance

Hawaii Matters

Hawaii Military History

Hawaii's Partnership for Appropriate & Compassionate Care

Hawaii Public Charter School Network

Hawaii Rifle Association

Hawaii Shippers Council

Hawaii Together


Hiram Fong Papers

Homeschool Legal Defense Hawaii

Honolulu Navy League

Honolulu Traffic

House Minority Blog

Imua TMT

Inouye-Kwock, NYT 1992

Inside the Nature Conservancy

Inverse Condemnation

July 4 in Hawaii

Land and Power in Hawaii

Lessons in Firearm Education

Lingle Years

Managed Care Matters -- Hawaii

Missile Defense Advocacy

MIS Veterans Hawaii

NAMI Hawaii

National Parents Org Hawaii

NFIB Hawaii News

NRA-ILA Hawaii


OHA Lies

Opt Out Today

Patients Rights Council Hawaii

Practical Policy Institute of Hawaii

Pritchett Cartoons

Pro-GMO Hawaii

Rental by Owner Awareness Assn

Research Institute for Hawaii USA

Rick Hamada Show

RJ Rummel

School Choice in Hawaii

Talking Tax

Tax Foundation of Hawaii

The Real Hanabusa

Time Out Honolulu

Trustee Akina KWO Columns

West Maui Taxpayers Association

What Natalie Thinks

Whole Life Hawaii