STAND. COM. REP. NO. 2056

Honolulu, Hawaii

RE:    S.B. No. 2981

       S.D. 1

Honorable Colleen Hanabusa

President of the Senate

Twenty-Fourth State Legislature

Regular Session of 2008

State of Hawaii

Madam:

     Your Committee on Human Services and Public Housing, to which was referred S.B. No. 2981 entitled:

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

begs leave to report as follows:

     The purpose of this measure is to reduce the period over which state low-income housing tax credits are taken from ten years to five years.

     Testimony in support of this measure was received from the Governor's Office, Department of Taxation, Hawaii Housing Finance and Development Corporation, Hawaii Island Community Development Corporation, Catholic Charities Hawai‘i, Pacific Housing Assistance Corporation, and Hawaii Association of REALTORS.

     Your Committee finds that affordable housing is a critical issue in Hawaii, and sufficient incentives must be available in order to leverage public-private partnerships to construct additional housing.  This measure provides one such incentive, making the low-income housing tax credit more attractive to investors who may be considering affordable housing projects in Hawaii.

     Your Committee has amended this measure to:

     (1)  Clarify an internal reference in section 235-110.8, Hawaii Revised Statutes;

     (2)  Add language that, for the purposes of subsection (h), the state housing credit shall be one hundred per cent of the applicable percentage of the qualified basis of each building located in Hawaii; provided that the applicable percentage shall be calculated as provided in section 42(b) of the Internal Revenue Code; and

     (3)  Make technical amendments to conform to the preferred drafting style.

     As affirmed by the record of votes of the members of your Committee on Human Services and Public Housing that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 2981, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 2981, 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 Human Services and Public Housing,

____________________________

SUZANNE CHUN OAKLAND, Chair