STAND. COM. REP. NO. 2568

Honolulu, Hawaii

RE:    S.B. No. 2593

       S.D. 1

Honorable Colleen Hanabusa

President of the Senate

Twenty-Fifth State Legislature

Regular Session of 2010

State of Hawaii

Madam:

     Your Committee on Ways and Means, to which was referred S.B. No. 2593, S.D. 1, entitled:

"A BILL FOR AN ACT RELATING TO THE HAWAII HOUSING FINANCE AND DEVELOPMENT CORPORATION,"

begs leave to report as follows:

     The purpose of this measure is to promote greater accountability in the granting of general excise tax exemptions for housing projects.

Specifically, this measure requires the Hawaii Housing Finance and Development Corporation to conduct periodic reviews of housing projects that receive general excise tax exemptions to ensure that the projects continue to meet eligibility requirements under the exemption.  This measure also requires the Hawaii Housing Finance and Development Corporation to adopt rules instituting penalties to be imposed on claimants who received or continue to receive general excise tax exemptions despite being ineligible.

     Your Committee received written comments in opposition to the measure from the Hawaii Housing Finance and Development Corporation.  The Hawaii Association of Realtors submitted comments on this measure.  The written comments may be reviewed on the Legislature's website.

     Your Committee finds that many affordable housing projects in the State receive general excise tax exemptions.  Your Committee also finds that the number of housing projects meeting the exemption criteria and those actually receiving the exemption is unknown.  Your Committee believes that, with proper oversight by the Hawaii Housing Finance and Development Corporation, the State will be able to collect all general excise tax revenues owed and ensure that the affordable housing projects receiving tax exemptions are in compliance with requirements to receive or retain the exemption.

     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 S.B. No. 2593, S.D. 1, and recommends that it pass Third Reading.

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

____________________________

DONNA MERCADO KIM, Chair