Watch out for the return of the franc invoice!

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Most of us have heard of Frankenstein, a novel written in 1818 by Mary Wollstonecraft Shelley. The protagonist of the story, Dr. Victor Frankenstein, created a creature by putting pieces of corpses together and then bringing them to life using an unexplained method. (Mad scientists must have their trade secrets!)

A “Frankenbill” or “Frankenstein Bill” is created by cobbling together parts of other bills, particularly bills that have already died in our legislative process. By planting these parts in an invoice that is still alive, these parts are effectively given new life.

In our legislation, the Senate has passed a bill to increase collective tax, Senate Act 56, which we have referred to in this column as the “Enola Gay” Act. It included massive increases in income tax for both individuals and businesses. 2-year suspension of general excise duty exemptions in wholesale; and a hefty increase in the transport tax.

After a public uproar over the Enola Gay bill, House leaders moved quickly to stamp on the bill. The Speaker of the Parliament’s office gave the bill a quadruple referral, which meant four different House Committees had to be cleared in a relatively short time to survive. That made the bill as good as dead, according to the majority leader of the house, Belatti. By the second lateral meeting on March 25, none of the four house committees to which the bill was assigned had bothered to hear it. That bill is now officially dead.

However, in a hearing published March 25, the Senate Ways and Means Committee stated its intention to incorporate some of the most important parts of Senate Act 56 into law

House Bill 58, a bill that at the time of Senate transition only provided for the temporary redistribution of transportation tax receipts to meet the debt servicing the state owes on its general debt. Proposed Senate Draft 1 of this bill contains new parts that temporarily repeal general excise tax exemptions and increase property transportation tax above $ 4 million.

Another proposed new part would lower the Hawaii property tax threshold. The estate tax threshold is the size of a deceased’s estate below which no estate tax is owed. As soon as the threshold is exceeded, the inheritance tax rises very quickly. In 2020, the Hawaii estate tax threshold is $ 5.49 million, while the federal estate tax threshold is $ 11.58 million. The bill would lower the Hawaii threshold to $ 3.5 million.

According to the website of the good government organization Common Cause Hawaii:

[O]Your legislature must not pass a bill that deals with two or more unrelated subjects, and should not pass a bill that did not have three separate readings in the State House and three separate readings in the Senate. The aim is to ensure a fair process in which the public and legislators have time to review and comment on the proposed legislation.

Unfortunately, lawmakers use misleading practices such as “Gut and Replace” when an invoice is stripped of its original content and replaced with the content of an unrelated invoice, and “Frankenstein invoices” when invoices that cover different topics are cobbled together into one invoice .

This new Frankenbill is to be negotiated on March 31st in the Ways and Means Committee. The hearing would have taken place shortly before

Publication date of this column. What did our legislators do? Did you create the Frankenbill, which will perhaps serve as a basis for negotiations in the last days of this legislative period? Did they fill this bill or other bills with the stratospheric income tax hikes that have given us national and international attention, and not with the good kind?

Be informed!

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Tom Yamachika is President of the Hawaii Tax Foundation.