STAND. COM. REP. NO. 1468

Honolulu, Hawaii

RE:    H.B. No. 1179

       H.D. 2

       S.D. 2

Honorable Ronald D. Kouchi

President of the Senate

Twenty-Ninth State Legislature

Regular Session of 2017

State of Hawaii

Sir:

     Your Committees on Judiciary and Labor and Ways and Means, to which was referred H.B. No. 1179, H.D. 2, S.D. 1, entitled:

"A BILL FOR AN ACT RELATING TO HOUSING,"

beg leave to report as follows:

     The purpose and intent of this measure is to:

     (1)  Expand the types of rental housing projects that may be exempt from general excise taxes; and

     (2)  Allow the terms of collective bargaining agreements and associated provisions to be deemed the prevailing wages and terms serving as the basis of compliance with chapter 104, Hawaii Revised Statutes, for the construction of certain rental housing projects.

     Your Committees received testimony in support of this measure from the Department of Labor and Industrial Relations, Office of the Mayor of the County of Hawai‘i, Hawaii Housing Finance and Development Corporation, Land Use Research Foundation of Hawaii, Hawai‘i Construction Alliance, and Pacific Resource Partnership.  Your Committees received comments on this measure from the Department of Taxation, Hawaii Community Development Authority, General Contractors Association of Hawaii, and Tax Foundation of Hawaii.

     Your Committees find that the State is experiencing a critical shortage of affordable housing.  Your Committees further find that private sector construction and development entities have taken steps to improve the economics of building and operating rental housing in Hawaii.  This measure supports private development entities that provide affordable housing units by expanding the types of projects that may be exempt from general excise taxes.

     Your Committees have amended this measure by:

     (1)  Replacing "special prevailing wage" with "section 201H‑36(a)(5) prevailing wages";

     (2)  Specifying that prevailing wages are prevailing wages under contracts pursuant to section 201H-36(a)(5), Hawaii Revised Statutes, ("section 201H-36(a)(5) prevailing wages"), rather than requiring that the terms of the collective bargaining agreement be deemed the prevailing wages;

     (3)  Stipulating that the qualified person or firm approved and certified for exemption from general excise taxes has not received other financing from any governmental contracting agency, including the Hawaii Housing Finance and Development Corporation, in order for the terms of the section 201H-36(a)(5) prevailing wages to be deemed the prevailing wages serving as the basis of compliance with chapter 104, Hawaii Revised Statutes, for work on the project;

     (4)  Deleting the stipulation that the collective bargaining agreement be properly submitted to the Director of Labor and Industrial Relations under section 104-34, Hawaii Revised Statutes, in order for the terms of the section 201H-36(a)(5) prevailing wages to be deemed the prevailing wages serving as the basis of compliance with chapter 104, Hawaii Revised Statutes, for work on the project; and

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

     As affirmed by the records of votes of the members of your Committees on Judiciary and Labor and Ways and Means that are attached to this report, your Committees are in accord with the intent and purpose of H.B. No. 1179, H.D. 2, S.D. 1, as amended herein, and recommend that it pass Third Reading in the form attached hereto as H.B. No. 1179, H.D. 2, S.D. 2.

Respectfully submitted on behalf of the members of the Committees on Judiciary and Labor and Ways and Means,

________________________________ JILL N. TOKUDA, Chair

________________________________ GILBERT S.C. KEITH-AGARAN, Chair