STAND. COM. REP. NO. 2995

Honolulu, Hawaii

RE:    H.B. No. 1735

       H.D. 1

Honorable Ronald D. Kouchi

President of the Senate

Twenty-Eighth State Legislature

Regular Session of 2016

State of Hawaii

Sir:

     Your Committee on Economic Development, Environment, and Technology, to which was referred H.B. No. 1735, H.D. 1, entitled:

"A BILL FOR AN ACT RELATING TO PROPERTY TAXES,"

begs leave to report as follows:

     The purpose and intent of this measure is to request the Department of Business, Economic Development, and Tourism to study the effects of Hawaii's low property tax rates.

     Your Committee received testimony in support of this measure from one individual.  Your Committee received comments on this measure from the Department of Business, Economic Development, and Tourism and Tax Foundation of Hawaii.

     Your Committee finds that Hawaii has the lowest property taxes in the nation, which causes the counties to potentially forego additional tax revenue from high-value homes and second homes.  Many individuals and families who spend time in Hawaii are owners of high-value properties and do not pay state income tax, instead maintaining resident status in another state with a lower income tax rate.  However, these individuals still use Hawaii's infrastructure and services, and thus should pay their fair share of taxes.  Your Committee further finds that low property taxes can incentivize development of high-end, high-value properties, contributing to the high cost of land, driving up the cost of living, and exacerbating affordable housing and homelessness issues.

     As affirmed by the record of votes of the members of your Committee on Economic Development, Environment, and Technology that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 1735, H.D. 1, and recommends that it pass Second Reading and be referred to your Committee on Ways and Means.

Respectfully submitted on behalf of the members of the Committee on Economic Development, Environment, and Technology,

________________________________

GLENN WAKAI, Chair