STAND. COM. REP. NO. 3567

Honolulu, Hawaii

RE: H.B. No. 207

H.D. 2

S.D. 1

Honorable Ronald D. Kouchi

President of the Senate

Twenty-Ninth State Legislature

Regular Session of 2018

State of Hawaii

Sir:

Your Committee on Ways and Means, to which was referred H.B. No. 207, H.D. 2, entitled:

"A BILL FOR AN ACT RELATING TO TAXATION,"

begs leave to report as follows:

The purpose and intent of this measure is to expand the income tax credit for low-income household renters.

For purposes of a public hearing, your Committee circulated a proposed S.D. 1 (Proposed Draft) of the measure and notified the public that your Committee would be accepting testimony on the Proposed Draft, which deletes the existing provisions of this measure and replaces its contents with provisions to:

(1) Increase estate taxes for Hawaii net taxable estates valued at over $10,000,000; and

(2) Raise the conveyance tax rates for residential investment properties with a value of at least $2,000,000.

Your Committee received testimony in support of the H.D. 2 version from IMUAlliance, Hawaiian Community Assets, and one individual.

Your Committee received written comments on the H.D. 2 version from Catholic Charities Hawaii.

Your Committee received testimony in support of the Proposed Draft from the Hawaii Appleseed Center for Law and Economic Justice, Hawaii Alliance for Progressive Action, and eight individuals.

Your Committee received testimony in opposition to the Proposed Draft from the Kohala Coast Resort Association, Hawaii Association of REALTORS, League of Women Voters of Hawaii, and The Chamber of Commerce Hawaii.

Your Committee received comments on the Proposed Draft from the Department of Taxation, Hawaii Housing Finance and Development Corporation, Tax Foundation of Hawaii, and Faith Action for Community Equity.

Your Committee finds that this measure will provide additional revenues to the State through the taxation of high-value estates and residential investment properties.

Your Committee has amended this measure by adopting the Proposed Draft and further amending the Proposed Draft by:

(1) Clarifying that the increased conveyance tax rates do not apply to multi-family condominium units; and

(2) Changing the date that the increased conveyance tax rates take effect from July 1, 2018, to January 1, 2019.

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 H.B. No. 207, H.D. 2, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 207, H.D. 2, S.D. 1, and be placed on the calendar for Third Reading.

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

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DONOVAN M. DELA CRUZ, Chair