STAND. COM. REP. NO. 2900

Honolulu, Hawaii

RE: S.B. No. 2757

S.D. 2

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 S.B. No. 2757, S.D. 1, entitled:

"A BILL FOR AN ACT RELATING TO HOUSING,"

begs leave to report as follows:

The purpose and intent of this measure is to lower the costs of developing and operating affordable housing.

Specifically, this measure:

(1) Extends the exemption from the general excise tax applicable to certain affordable rental housing projects by an additional four years;

(2) Removes the cap on the tax exemption; and

(3) Prohibits project owners who received the tax exemption from refusing to lease a unit in the project to a qualified applicant on the basis that the applicant holds a voucher or certificate of eligibility under section 8 of the United States Housing Act.

Your Committee received written comments in support of this measure from the Office of the Governor; Department of Taxation; Department of Business, Economic Development, and Tourism; Hawaii Housing Finance and Development Corporation; Hawaii Public Housing Authority; and Hawaii Construction Alliance.

Your Committee received written comments on this measure from the Office of Hawaiian Affairs; Tax Foundation of Hawaii; and General Contractors Association of Hawaii.

Your Committee finds that the tax exemption provided by this measure will assist in addressing Hawaii's current critical shortage of affordable housing and the need for sixty-six thousand additional housing units by the year 2025.

Your Committee has amended this measure by:

(1) Changing the effective date to July 1, 2050, to facilitate further discussion on the measure; and

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

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 S.B. No. 2757, S.D. 1, as amended herein, and recommends that it pass Third Reading in the form attached hereto as S.B. No. 2757, S.D. 2.

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

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DONOVAN M. DELA CRUZ, Chair