STAND. COM. REP. NO. 3175

Honolulu, Hawaii

RE: H.B. No. 2747

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 Committees on Housing and Human Services, to which was referred H.B. No. 2747, H.D. 2, entitled:

"A BILL FOR AN ACT RELATING TO HOMEOWNERSHIP,"

beg leave to report as follows:

The purpose and intent of this measure is to bifurcate and amend the law relating to individual housing accounts under section 235-5.5, Hawaii Revised Statutes, by:

(1) Changing the annual contribution and deduction amounts, aggregate contribution amount, and deadline for distributing the entire interest for individual housing accounts established after December 31, 2018;

(2) Allowing community development financial institutions to serve as trustees of individual housing accounts established after December 31, 2018; and

(3) Requiring homebuyer education conducted by a housing counseling agency approved by the United States Department of Housing and Urban Development as a condition of distribution of funds in individual housing accounts by trustees.

Your Committees received testimony in support of this measure from the Hawai‘i Association of REALTORS and O‘ahu County Committee on Legislative Priorities of the Democratic Party of Hawai‘i. Your Committees received comments on this measure from the Department of Taxation and Hawaii Credit Union League.

Your Committees find that individual housing accounts are savings vehicles that assist individuals in purchasing their first principal residence. Contributions to individual housing accounts are deductible, and distributions are taxed to the recipient. Contributions are limited by the annual limitation and by the aggregate limitation. This measure is intended to increase the contribution limits for individual housing accounts to reflect the current higher cost of housing, in order to enable more individuals to become homeowners.

Your Committees have amended this measure by 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 Housing and Human Services that are attached to this report, your Committees are in accord with the intent and purpose of H.B. No. 2747, H.D. 2, as amended herein, and recommend that it pass Second Reading in the form attached hereto as H.B. No. 2747, H.D. 2, S.D. 1, and be referred to your Committee on Ways and Means.

Respectfully submitted on behalf of the members of the Committees on Housing and Human Services,

________________________________ JOSH GREEN, Chair

________________________________ WILL ESPERO, Chair