SB3101

THE SENATE	S.B. NO.	3101
THIRTY-FIRST LEGISLATURE, 2022
STATE OF HAWAII

A BILL FOR AN ACT

RELATING TO TAX EXEMPTION.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

Section 1. The legislature finds that lands utilized by the department of Hawaiian home lands to provide homesteads for native Hawaiians are offered at affordable rates when compared to similar development available in Hawaii. The purpose of this Act is to exempt any homestead development for the department of Hawaiian home lands from general excise taxes.

Section 2. Chapter 237, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"§237- Exemptions for any homestead development for the department of Hawaiian home lands. (a) There shall be exempted from the measure of the taxes imposed by this chapter, any gross income arising from the planning, design, financing, or construction of any homestead development for the department of Hawaiian home lands as provided in this section.

(b) The exemption eligibility shall be approved by the department of Hawaiian home lands and shall apply to the gross income derived by any qualified person or firm from a newly constructed or a moderately or substantially rehabilitated project that is developed:

(1) For the department of Hawaiian home lands;

(2) Under a government assistance program approved by the department of Hawaiian home lands;

(3) Under the sponsorship of a nonprofit organization providing home rehabilitation or new homes for qualified families in need of decent, low-cost housing; or

(4) To provide affordable rental housing where at least fifty per cent of the available units are for households with incomes at or below eighty per cent of the area median family income as determined by the United States Department of Housing and Urban Development.

(c) All claims for exemption under this section shall be filed with and certified by the department of Hawaiian home lands and forwarded to the department of taxation by the claimant. Any claim for exemption that is filed and approved, shall not be considered a subsidy.

(d) The department of Hawaiian home lands may establish, revise, charge, and collect a reasonable service fee, as necessary, in connection with its approvals and certifications of the exemption under this section. The fees shall be deposited into the department of Hawaiian home lands administration account.

(e) For purposes of this section:

"Homestead development" means development of residential, agricultural, or pastoral lots to be awarded as homestead leases pursuant to the Hawaiian Homes Commission Act of 1920, as amended, including, but not limited to, on- and off-site infrastructure requirements, and dwelling units upon those lots.

"Moderately rehabilitated":

(1) Means rehabilitation to upgrade a dwelling unit to a decent, safe, and sanitary condition; or

(2) Includes the repair or replacement of major building systems or components in danger of failure.

"Substantially rehabilitated":

(1) Means the improvement of a property to a decent, safe, and sanitary condition that requires more than routine or minor repairs or improvements. It may include but shall not be limited to:

(A) The gutting and extensive reconstruction of a dwelling unit; or

(B) Cosmetic improvements coupled with the curing of a substantial accumulation of deferred maintenance; and

(2) Includes renovation, alteration, or remodeling to convert or adapt structurally sound property to the design and condition required for a specific use, such as conversion of a hotel to housing for elders."

SECTION 3. New statutory material is underscored.

SECTION 4. This Act shall take effect upon its approval.

INTRODUCED BY:	_____________________________