The Taxman Cometh--well, sort of.
Hawaii Insurers Council v. Lingle (ICA April 14, 2008) Vacated in Part by HSC. Background. The Insurance Regulation Fund (IRF) was established by the legislature, but controlled by the executive branch, to collect monies from Hawai'i insurers in order to support the overhead of the Insurance Commissioner, Dept. of Budget and Finance, the DCCA, and the Insurance Division. Over the years the IRF collected from the insurers and had $2 million in excess. The State therefore prepared to transfer the funds to the General Fund. The Hawaii Insurers Council (HIC) sued the State alleging that the monies collected from the insurers were illegal and unconstitutional taxes. The circuit court enjoined the State from transferring the money. A Regulatory fee is still an Unconstitutional Tax. The executive branch of government cannot tax. Only the legislature and "political subdivisions" have the constitutional power to tax. Haw. Const. Art. III § 3. The State argued that the charge to...