STAND. COM. REP. NO.  603

Honolulu, Hawaii

                , 2007

RE:   H.B. No. 252

      H.D. 1

Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-Fourth State Legislature

Regular Session of 2007

State of Hawaii

Sir:

     Your Committee on Economic Development & Business Concerns, to which was referred H.B. No. 252 entitled:

"A BILL FOR AN ACT RELATING TO CONVEYANCE TAXES FOR SPECULATIVE SALES,"

begs leave to report as follows:

     The purpose of this bill is to curb speculative residential home sales by increasing the conveyance tax rates for sales of condominiums or single-family residences where the purchaser is ineligible for a county homeowner's property tax exemption.

     The Nature Conservancy of Hawaii and Sierra Club-Hawaii Chapter supported this bill.  The Department of Land and Natural Resources supported the intent of this measure.  The Hawaii Association of REALTORS and Wyndham Vacation Ownership, Inc., opposed the bill. The Department of Taxation submitted comments.

     Your Committee finds that specified percentages of the conveyance tax are paid into the Land Conservation Fund, Natural Area Reserve Fund, and Rental Housing Trust Fund.  Thus, increasing the conveyance tax rate under this bill will increase the moneys available for watershed conservation, affordable housing programs, and the acquisition of legacy lands.  However, it is not clear what effect the bill will have on the price and availability of housing in Hawaii, because any increase in taxes may be transferred by a seller to a purchaser simply by increasing the price of the home.

     Your Committee has changed the effective date of the bill to July 1, 2034, to encourage further discussion of the issues raised by the measure and respectfully requests the Committee on Finance to review the financial impact of this bill.

     As affirmed by the record of votes of the members of your Committee on Economic Development & Business Concerns that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 252, as amended herein, and recommends that it be referred to the Committee on Finance in the form attached hereto as H.B. No. 252, H.D. 1.

Respectfully submitted on behalf of the members of the Committee on Economic Development & Business Concerns,

____________________________

KYLE T. YAMASHITA, Chair