STAND. COM. REP. NO. 2677

Honolulu, Hawaii

RE:    S.B. No. 2542

       S.D. 1

Honorable Donna Mercado Kim

President of the Senate

Twenty-Seventh State Legislature

Regular Session of 2014

State of Hawaii

Madam:

     Your Committee on Ways and Means, to which was referred S.B. No. 2542 entitled:

"A BILL FOR AN ACT RELATING TO THE DISPOSITION OF THE CONVEYANCE TAX COLLECTIONS TO THE RENTAL HOUSING TRUST FUND,"

begs leave to report as follows:

     The purpose and intent of this measure is to support Hawaii's goal of meeting the projected number of needed affordable housing units.

     More specifically, this measure restores the allocation of conveyance tax revenues to the Rental Housing Trust Fund to fifty per cent.

     Your Committee received written comments in support of this measure from the Hawaii Housing Finance and Development Corporation, Catholic Charities Hawaii, Hawaii Appleseed Center for Law and Economic Justice, Hawaii Association of REALTORS, Office for Social Ministry of the Catholic Diocese of Honolulu, Partners in Care, PHOCUSED, and three individuals.  Your Committee received comments on this measure from the Department of Budget and Finance and the Tax Foundation of Hawaii.

     Your Committee finds that Hawaii has a definite, immediate need for affordable rental housing.  Your Committee also finds that the Rental Housing Trust Fund was established to provide loans or grants for the development, pre-development, construction, acquisition, preservation, and substantial rehabilitation of rental housing units.  In recognition of the need to address the shortfall in affordable rental housing units, the Legislature raised the allocation of the conveyance tax to the Rental Housing Trust Fund to fifty per cent in 2006.  However, due to the economic downturn of 2008 to 2010, the allocation to the Rental Housing Trust Fund was reduced to thirty per cent.  Your Committee further finds that restoring the allocation to the Rental Housing Trust Fund to fifty per cent of state conveyance tax collections will increase the amount of funds available to build affordable rental housing.

     Your Committee has amended this measure by:

     (1)  Changing the effective date to July 1, 2050, to facilitate further discussion on the measure; and

     (2)  Making technical nonsubstantive amendments for the purposes of consistency, clarity, and style.

     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. 2542, as amended herein, and recommends that it pass Third Reading in the form attached hereto as S.B. No. 2542, S.D. 1.

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

____________________________

DAVID Y. IGE, Chair