STAND. COM. REP. NO. 497

Honolulu, Hawaii

RE:    S.B. No. 1145

       S.D. 1

Honorable Ronald D. Kouchi

President of the Senate

Twenty-Ninth State Legislature

Regular Session of 2017

State of Hawaii

Sir:

     Your Committee on Housing, to which was referred S.B. No. 1145 entitled:

"A BILL FOR AN ACT RELATING TO THE CONVEYANCE TAX,"

begs leave to report as follows:

     The purpose and intent of this measure is to:

     (1)  Increase the rates for certain conveyance tax categories; and

     (2)  Repeal the statutory cap on the disposition of conveyance taxes dedicated for deposit into the rental housing revolving fund.

     Your Committee received testimony in support of this measure from the Hawaii Housing Finance and Development Corporation, Hawaii Habitat for Humanity Association, Housing Now Coalition, IMUAlliance, Hawaii Appleseed Center for Law and Economic Justice, Faith Action for Community Equity, and seven individuals.  Your Committee received testimony in opposition to this measure from the Hawaii Association of REALTORS and Chamber of Commerce Hawaii.  Your Committee received comments on this measure from the Department of Taxation, Department of Budget and Finance, Tax Foundation of Hawaii, and Building Industry Association of Hawaii.

     Your Committee finds that the development and construction of affordable housing units is an urgent priority of the State.  Your Committee further finds that the rental housing revolving fund, which was established to provide low-interest loans or grants to qualified owners and developers constructing affordable housing units, can help to fulfill the need for affordable housing.  This measure will increase the amount of available monies in the rental housing revolving fund by increasing the rates for certain conveyance tax categories and increasing the amount of conveyance tax that is paid into the revolving fund.

     Your Committee has amended this measure by:

     (1)  Further increasing the conveyance tax rate for the sale of condominiums or single family residences for which the purchaser is ineligible for a homeowner's exemption with a value of $1,000,000 or more;

     (2)  Removing language increasing the conveyance tax rate for the sale of condominiums or single family residences for which the purchaser is ineligible for a homeowner's exemption with a value of less than $1,000,000; and

     (3)  Increasing the portion of conveyance tax to be paid into the rental housing revolving fund to sixty percent.

     As affirmed by the record of votes of the members of your Committee on Housing that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 1145, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 1145, S.D. 1, and be referred to your Committee on Ways and Means.

Respectfully submitted on behalf of the members of the Committee on Housing,

________________________________

WILL ESPERO, Chair