STAND. COM. REP. NO. 3626

Honolulu, Hawaii

RE: H.B. No. 2448

H.D. 1

S.D. 1

Honorable Ronald D. Kouchi

President of the Senate

Thirtieth State Legislature

Regular Session of 2020

State of Hawaii

Sir:

Your Committee on Housing, to which was referred H.B. No. 2448, H.D. 1, entitled:

"A BILL FOR AN ACT RELATING TO AFFORDABLE HOUSING,"

begs leave to report as follows:

The purpose and intent of this measure is to clarify that the exemption from the general excise tax established by section 201H‑36, Hawaii Revised Statutes, shall be provided once the qualifying person or firm has filed or recorded a regulatory agreement in land court or the bureau of conveyances, or both, whichever is appropriate.

Your Committee received testimony in support of this measure from the Kobayashi Group, LLP and one individual. Your Committee received comments on this measure from the Department of Taxation; Hawaii Housing Finance and Development Corporation; Tax Foundation of Hawaii; and The Michaels Organization, LLC.

Your Committee finds that section 201H-36, Hawaii Revised Statutes, establishes an exemption from the state general excise tax for qualifying housing projects. However, your Committee notes that some developers are unsure at what point in the development process this exemption begins. This measure clarifies that the exemption from the general excise tax established by section 201H-36, Hawaii Revised Statutes, shall be provided once the qualifying person or firm has filed or recorded a regulatory agreement in land court or the bureau of conveyances, or both, whichever is appropriate.

Accordingly, your Committee has amended this measure by inserting an effective date of July 1, 2050, to encourage further discussion.

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. 2448, H.D. 1, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 2448, H.D. 1, 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,

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STANLEY CHANG, Chair