STAND. COM. REP. NO. 387-18

Honolulu, Hawaii

, 2018

RE: H.B. No. 2672

H.D. 1

Honorable Scott K. Saiki

Speaker, House of Representatives

Twenty-Ninth State Legislature

Regular Session of 2018

State of Hawaii

Sir:

Your Committee on Housing, to which was referred H.B. No. 2672 entitled:

"A BILL FOR AN ACT RELATING TO TAXATION,"

begs leave to report as follows:

The purpose of this measure is to assist low-income renters afford housing by expanding the low-income household renters' income tax credit based upon adjusted gross income and filing status.

The Office of Hawaiian Affairs, Hawaii Appleseed Center for Law and Economic Justice, Oahu County Committee on Legislative Priorities of the Democratic Party of Hawaii, and a concerned individual testified in support of this measure. The Department of Taxation and Tax Foundation of Hawaii provided comments.

Your Committee finds that housing renters in Hawaii are cost burdened, with over half of the State's renters spending more than thirty percent of their income on rent. While Hawaii's Low-Income Household Renters' Tax Credit was created forty years ago to help make up for high rents and tax rates that burden low- and moderate-income households, this tax credit has not been updated in nearly thirty years, not even to account for inflation that occurred over that period of time. Your Committee finds that this measure is necessary to make housing more affordable for low- and moderate-income households.

Your Committee has amended this measure by:

(1) Amending the definition of "adjusted gross income" to conform to the federal definition of adjusted gross income to increase accuracy in measuring a taxpayer's income and eligibility for the income tax credit for low-income household renters;

(2) Changing its effective date to July 1, 2050, to facilitate further discussion; and

(3) Making technical, nonsubstantive amendments for clarity, consistency, and style.

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 H.B. No. 2672, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 2672, H.D. 1, and be referred to your Committee on Finance.

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

____________________________

TOM BROWER, Chair