STAND. COM. REP. NO. 7

Honolulu, Hawaii

RE:    S.B. No. 86

Honorable Donna Mercado Kim

President of the Senate

Twenty-Seventh State Legislature

Regular Session of 2013

State of Hawaii

Madam:

     Your Committee on Human Services, to which was referred S.B. No. 86 entitled:

"A BILL FOR AN ACT RELATING TO PUBLIC HOUSING,"

begs leave to report as follows:

     The purpose and intent of this measure is to move the state income tax and obligations exemption for public housing agencies from the laws governing the Hawaii Housing Finance and Development Corporation to the laws governing the Hawaii Public Housing Authority and correct a reference to a section of the United States Housing Act of 1937.

     Your Committee received testimony in support of this measure from the Department of Human Services and the Hawaii Public Housing Authority.  Your Committee received comments on this measure from the Tax Foundation of Hawaii.

Your Committee finds that the United States Housing Act of 1937, as amended, provides for public housing agencies to issue obligations secured by a variety of United States Department of Housing and Urban Development funds to finance the development of low-income housing projects.  The Housing Act further provides that any such obligations, including interest thereon, that are issued by a public housing agency, and any income derived by the public housing agency from such projects, are exempt from all taxation imposed by the United States.  Current state laws provide that such obligations and income should also be exempt from all taxation imposed by the State.  Your Committee further finds that this measure corrects the misplacement of the statute providing the exemption, which was caused when the Hawaii Housing Finance and Development Corporation and the Hawaii Public Housing Authority bifurcated on July 5, 2005.

     As affirmed by the record of votes of the members of your Committee on Human Services that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 86 and recommends that it pass Second Reading and be referred to the Committee on Ways and Means.

Respectfully submitted on behalf of the members of the Committee on Human Services,

____________________________

SUZANNE CHUN OAKLAND, Chair