78 Hawai'i 157, Convention Center Authority v. Anzai
| Decision Date | 14 March 1995 |
| Docket Number | No. 17837,17837 |
| Citation | 890 P.2d 1197,78 Hawaii 157 |
| Parties | 78 Hawai'i 157 CONVENTION CENTER AUTHORITY, State of Hawai'i, Plaintiff, v. Earl I. ANZAI, 1 in his capacity as Acting Director of Finance, Department of Budget and Finance, State of Hawai'i; County of Hawai'i; County of Maui; County of Kaua'i; and City and County of Honolulu, Defendants. |
| Court | Hawaii Supreme Court |
John W. Anderson and Charleen M. Aina, Deputy Attys. Gen., Honolulu, Samuel I. Hellman, Kam T. Wong and W. Cullen MacDonald, pro hac vice, of Hawkins, Delafield & Wood, New York City, on the briefs, for plaintiff.
Andrew V. Beaman of Chun Kerr Dodd & Kaneshige, Honolulu, Roger L. Davis and George A. Yuhas, pro hac vice, of Orrick, Herrington & Sutcliffe, San Francisco, CA, on the briefs, for defendant Earl I. Anzai, in his capacity as Acting Director of Finance.
Richard D. Wurdeman, Corp. Counsel, County of Hawai'i, on the briefs, Hilo, for defendant County of Hawai'i.
Jeffrey P. Schmidt, Deputy Corp. Counsel, County of Maui, on the briefs, Wailuku, Maui, for defendant County of Maui.
Galen T. Nakamura, Deputy County Atty., County of Kaua'i, on the briefs, Lihue, Kaua'i, for defendant County of Kaua'i.
Before MOON, C.J., and KLEIN, LEVINSON, NAKAYAMA and RAMIL, JJ.
In an original proceeding brought by the parties to this court upon an agreed statement of facts, pursuant to section 27 of Act 7, 2 1993 Hawai'i Session Laws (Spec.Sess.) [hereinafter Act 7], and HRAP Rule 14, 3 the plaintiff Convention Center Authority, State of Hawai'i (the Authority) seeks to obtain a determination as to whether the bonds authorized by the 1993 Legislature to build and operate a convention center would be exempt from the constitutional debt limit.
We hold that the one percent increase in the transient accommodations tax (TAT), earmarked in part for financing the development and construction of a state convention center by the 1993 Hawai'i State Legislature, qualifies as a "user tax," and that the revenue bonds, authorized by the legislature for the development and construction of the proposed convention center, qualify for exclusion from the debt limit as mandated by the Hawai'i Constitution. However, based on the plain language of the Hawai'i Constitution's reimbursable general obligation bond exclusion and its corresponding constitutional history, the reimbursable general obligation bonds, authorized by the legislature for the development and construction of the proposed convention center, do not qualify for exclusion from the constitutional debt limit.
The Authority was established by the legislature in 1988, after much discussion regarding the development and construction of a convention center in Hawai'i. The Authority is a corporate body consisting of seven members who are appointed by the governor "on the basis of their knowledge, interest, and proven expertise in, but not limited to, one or more of the following fields: finance, law, architecture, commerce and trade, corporate management, marketing, economics and visitor industry." Hawai'i Revised Statutes (HRS) § 206X-3(b) (Supp.1992). The Authority's purpose is "to review for approval the proposed convention center development plan of a developer and to supervise the development by a developer of all development within the convention center district pursuant to the convention center development plan approved by the authority...." HRS § 206X-4(a) (Supp.1992).
The defendant Earl I. Anzai 4 is the acting State Director of Budget and Finance (the Director), whose responsibilities include administering the state debt and insuring the state's compliance with the debt limitations mandated by article VII, section 13 of the Hawai'i Constitution. The Director is responsible for preparing detailed statements showing, among other things, the total indebtedness of the state, and the amount of all categories of indebtedness properly excludable from the calculation of the debt limit. After giving the Attorney General and the Comptroller the opportunity to review the statements and object to any item contained therein, the Director is to certify these statements to the Governor and the presiding officers of the legislature. The significance of this certification by the Director is that it determines the amount of general obligation bond debt that the state may lawfully incur and it therefore limits the amount of such bonds that the state can issue and sell. If it has not been determined whether certain bonds or categories of bonds are properly excludable under the exceptions to the debt limit set out in article VII, section 13(1)-(9), then those bonds must be included in the Director's debt limit calculations until the excludability issue is judicially resolved. See HRS § 39-93(e) (1985). 5
The defendant counties of Hawai'i, Maui, and Kaua'i, and the City and County of Honolulu (the defendant counties) are the political subdivisions of the state. They are involved in the present case because, pursuant to HRS § 237D-6.5 (Supp.1992), each receives a portion of the revenues generated by the TAT, a portion of which is implicated in this case.
The TAT was adopted by the legislature in 1986 and is a tax imposed on operators of transient accommodations, which include hotels, apartments, condominiums, and the like, that are customarily occupied for less than 180 days. HRS § 237D-2 (Supp.1992). Prior to its adoption, the proponents of the TAT had proposed that the proceeds of the TAT be dedicated to the funding of activities designed to enhance the tourist industry, including a convention center:
Mr. President, 20 years ago you and I were elected to office. You and I had the honor of serving on the House Finance Committee with our erstwhile [sic] Ways and Means chairman, and you and I heard the plea by the Hawaii Visitors Bureau [ (HVB) ] at that time for more funding to generate assistance in finance to promote Hawaii more effectively, and for the last 18 years, from that time, I have strongly opposed the imposition of a room tax on our hotel industry. However, this year for the first time, I agreed to support a bill calling for a hotel room tax on the condition that the revenues from this tax would be earmarked, and I repeat, earmarked, for permanent funding for the HVB and for the design and construction of a convention center in Hawaii.
Mr. President, I supported the earmarking for two reasons. First, the Hawaii Visitors Bureau would receive permanent funding in order to increase its promotional efforts of the Islands. This is critical, especially now when troubled world conditions are keeping tourists away from popular vacation spots in Europe and drawing them to Hawaii. Second, I sincerely believe, Mr. President, we need a convention center. It would be a magnificent asset for this state, enhancing our tourism market, furnishing the state with increased revenues, and providing for a greater diversification of our economic base are all potential benefits which would result from sufficiently funding the HVB and developing a convention center complex.
Mr. President, after months of debate and discussion, proponents of financing the convention center through a room tax reached agreement with members of the tourism and hotel industry because the stance that was taken that the revenues generated from this tax would be earmarked for the HVB, a convention center, and to the counties for tourism related activities.
Earmarking and a room tax went hand in hand. Remember, the Senate's original position for this legislation was a package of three Senate bills which proposed the selection of a site for the center, the creation of an authority, and the method of financing and earmarking the room tax. As this session ran its course, each bill diverged farther and farther away from its original intent to the final form before us today. This bill is what remains of the convention center package and this bill, in my view, has very little to do with tourism or a convention center.
Testimony of Senator W. Buddy Soares on Conf.Comm.Rep. No. 66-86 (H.B. No. 2805-86, H.D. 1, S.D. 1, C.D. 1), in 1986 Senate Journal, at 652. Despite the criticism, as voiced by Senator Soares, no portion of the TAT was earmarked for either the tourist industry, the HVB, or the convention center. The proceeds from the five percent tax went directly into the state's general fund.
In 1988, the state legislature first enacted legislation to specifically address the need for a convention center and, as noted above, passed legislation establishing the Authority. In doing so, the legislature made the following findings:
Tourism has been and probably will remain the mainstay of Hawai'i's economy. Although prospects for the tourism industry appear to be excellent for the foreseeable future, the legislature finds that certain steps should be taken to ensure this continued vitality. The legislature finds and declares that the construction of a world-class convention center facility would strengthen Hawai'i's economy by expanding its market size to convention-going visitors.
Conventioneers, because they spend more money per day than other visitors, are exceedingly desirable guests. An added benefit is that most conventions are normally held during the traditional tourist off-season. This influx of convention dollars during the normal tourist off-season results in greater year-round economic stability for all Hawai'i.
HRS § 206X-1 (Supp.1992). The 1988 act further provided that the convention center facility should be centrally located within Waikiki to best address the needs of prospective conventioneers and suggested possible sites. However, the 1988 act did not provide any specific mechanism for financing the convention center.
In 1993, the legislature revisited the convention center issue and made the following findings:
The...
To continue reading
Request your trial
-
86 Hawai'i 440, State v. Mallan
...fundamental principle in interpreting a constitutional provision is to give effect to that intent." Convention Center Authority v. Anzai, 78 Hawai'i 157, 167, 890 P.2d 1197, 1207 (1995) (internal quotation marks and citations omitted). Based on the committee reports and debates in the Const......
-
81 Hawai'i 39, State v. Jackson, 17367
...ascertaining the intent of the framers and the people who adopted the constitutional provision, see Convention Center Authority v. Anzai, 78 Hawai'i 157, 167, 890 P.2d 1197, 1207 (1995) ("[W]e have long recognized that the Hawai'i Constitution must be construed with due regard to the intent......
-
State v. Cutsinger
...beyond a reasonable doubt; and (3) the constitutional defect must be clear, manifest, and unmistakable." Convention Ctr. Auth. v. Anzai, 78 Hawai`i 157, 162, 890 P.2d 1197, 1202 (1995) (internal quotation marks and brackets Article I, section 10, clause 1, of the United States Constitution ......
-
County Of Haw.‘i v. Homeowners
...1 Cranch 137, 5 U.S. 137, 180, 2 L.Ed. 60 (1803) (laws repugnant to the Constitution are void)); Convention Ctr. Auth. v. Anzai, 78 Hawai‘i 157, 164, 890 P.2d 1197, 1204 (1995) (determining that the legislative findings were not dispositive of whether the revenues met the “substantially der......
-
SAVING CITIES OR EXPLOITING CREDITORS? STATE REDIRECTION OF MUNICIPAL ASSETS.
...AL., supra note 195, at 230-48. (199.) See id. at 230-31. (200.) See id. (201.) See id. (202.) See, e.g., Convention Ctr. Auth. v. Anzai, 890 P.2d 1197,1205 (Haw. 1995). See generally Eakin v. State ex rel. Cap. Improvement Bd. of Managers, 474 N.E.2d 62 (Ind. 1985). (203.) See AMDURSKY ET ......