STAND. COM. REP. NO. 205

Honolulu, Hawaii

RE: S.B. No. 26

S.D. 1

Honorable Ronald D. Kouchi

President of the Senate

Thirty-First State Legislature

Regular Session of 2021

State of Hawaii

Sir:

Your Committee on Housing, to which was referred S.B. No. 26 entitled:

"A BILL FOR AN ACT RELATING TO INDIVIDUAL HOUSING ACCOUNTS,"

begs leave to report as follows:

The purpose and intent of this measure is to establish the individual housing accounts savings program, with accompanying board and administrative fund. The savings program will allow Hawaii residents to save money for a down payment on a home or certain other home-related expenses.

Your Committee received testimony in support of this measure from one individual. Your Committee received comments on this measure from the Department of Taxation, Tax Foundation of Hawaii, Hawaii Credit Union League, Office of Information Practices, and Department of Budget and Finance.

Your Committee finds that this measure is intended to create a way for employees who are Hawaii taxpayers to save money for home ownership or other housing-related expenses. Your Committee has heard testimony that when a similar program was offered there were only 83 participants in the program, which would make it difficult to achieve economies of scale.

Your Committee understands this concern and notes that S.B. No. 5, Regular Session of 2021, is substantially similar to this measure and creates employer-run housing savings accounts but creates an opt-out system where every employee is automatically enrolled rather than the opt-in provision in this measure as drafted. Your Committee finds that the language in S.B. No. 5 is preferrable as it will result in far greater participation in the program.

Accordingly, your Committee has amended this measure by deleting its contents and inserting the contents of S.B. No. 5, a measure that:

(1) Establishes a Housing Savings Account system;

(2) Establishes a board for administrative purposes within the Department of Budget and Finance;

(3) Sets the default contribution rate, but provides that employees may elect to contribute a different amount; and

(4) Automatically enrolls all employees in the program, but also provides that any employee may opt-out at any time.

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 S.B. No. 26, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 26, S.D. 1, and be referred to your Committees on Ways and Means and Judiciary.

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

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STANLEY CHANG, Chair