STAND. COM. REP. NO. 3204

                                   Honolulu, Hawaii
                                                     , 2000

                                   RE:  H.B. No. 2432
                                        H.D. 1
                                        S.D. 1




Honorable Norman Mizuguchi
President of the Senate
Twentieth State Legislature
Regular Session of 2000
State of Hawaii

Sir:

     Your Committee on Ways and Means, to which was referred
H.B. No. 2432, H.D. 1, S.D. 1, entitled: 

     "A BILL FOR AN ACT RELATING TO LOW-INCOME HOUSING TAX
     CREDIT,"

begs leave to report as follows:

     The purpose of this measure is to assist members of
partnerships, limited liability companies, or S corporations to
claim the low-income housing tax credit.

     This measure:

     (1)  Allows a taxpayer to claim the state credit without
          claiming the federal credit; and

     (2)  Splits Section 235-2.4, Hawaii Revised Statutes (HRS),
          into two sections, 235-2.4 and 235-2.45.

     The State low-income housing tax credit program helps create
affordable housing for persons earning less than 60 per cent of
the median income by providing preferences for projects
consisting of units which will be available to families with
substantially lower incomes.  The intent of the program is to
attract investors who provide equity to build these projects in
return for tax credits for a period of ten years.


 
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                                   STAND. COM. REP. NO. 3204
                                   Page 2


     Your Committee finds that under current law, investors may
claim the State low-income housing tax credit only if they also
claim the the federal low-income housing tax credit.  By allowing
investors to claim the tax credit whether or not they claim the
federal tax credit, the State will realize an increase in the
development of affordable rental housing.

     As affirmed by the record of votes of the members of your
Committee on Ways and Means that is attached to this report, your
Committee is in accord with the intent and purpose of
H.B. No. 2432, H.D. 1, S.D. 1, and recommends that it pass Third
Reading.

                                 Respectfully submitted on behalf
                                 of the members of the Committee
                                 on Ways and Means,



                                 ________________________________
                                 CAROL FUKUNAGA, Co-Chair



                                 ________________________________
                                 ANDREW LEVIN, Co-Chair

 
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