STAND. COM. REP. NO. 1063

Honolulu, Hawaii

RE:    H.B. No. 1096

       H.D. 1

       S.D. 1

Honorable Colleen Hanabusa

President of the Senate

Twenty-Fourth State Legislature

Regular Session of 2007

State of Hawaii

Madam:

     Your Committee on Commerce, Consumer Protection, and Affordable Housing, to which was referred H.B. No. 1096, H.D. 1, entitled:

"A BILL FOR AN ACT RELATING TO STATE MORTGAGE CREDIT CERTIFICATES,"

begs leave to report as follows:

     The purpose of this measure is to assist low- and moderate-income taxpayers with purchasing a principal residence in sustainable affordable housing developments by providing qualified buyers with an income tax credit in an amount up to twenty per cent of the buyer's annual mortgage interest payment.

     Your Committee received testimony in support of this measure from the Hawaii Association of Realtors and UniDev Hawaii, L.L.C.  The Department of Taxation submitted testimony in opposition to this measure.  The Tax Foundation of Hawaii submitted comments.

     The Department of Taxation submitted testimony that the implementation of this measure would result in a revenue loss of approximately $800,000.  The Department of Taxation did not provide the method used to calculate the fiscal impact of this measure.

     Your Committee recognizes that the State is undergoing a

housing crisis and finds that the intent of this measure is to provide home ownership opportunities for low- and moderate-income taxpayers by establishing an income tax credit to lessen the financial burden of a mortgage. 

     Your Committee notes that UniDev Hawaii, L.L.C. has provided proposed amendments to this measure and on passing this measure out, your Committee asks that the Committee on Economic Development and Taxation consider the amendments proposed by UniDev Hawaii, L.L.C.

     Your Committee has amended this measure by making technical, nonsubstantive changes for the purposes of clarity and style.

     As affirmed by the record of votes of the members of your Committee on Commerce, Consumer Protection, and Affordable Housing that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 1096, H.D. 1, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 1096, H.D. 1, S.D. 1, and be referred to the Committee on Economic Development and Taxation.

Respectfully submitted on behalf of the members of the Committee on Commerce, Consumer Protection, and Affordable Housing,

____________________________

BRIAN T. TANIGUCHI, Chair