STAND. COM. REP. NO. 2118

Honolulu, Hawaii

RE: S.B. No. 3101

S.D. 1

Honorable Ronald D. Kouchi

President of the Senate

Thirty-First State Legislature

Regular Session of 2022

State of Hawaii

Sir:

Your Committee on Hawaiian Affairs, to which was referred S.B. No. 3101 entitled:

"A BILL FOR AN ACT RELATING TO TAX EXEMPTION,"

begs leave to report as follows:

The purpose and intent of this measure is to exempt any homestead development for the Department of Hawaiian Home Lands from general excise taxes.

Your Committee received testimony in support of this measure from the Department of Hawaiian Home Lands; Department of Taxation; Dowling Company, Inc.; and one individual. Your Committee received testimony in opposition to this measure from the Center for Hawaiian Sovereignty Studies. Your Committee received comments on this measure from the Department of Budget and Finance, and Tax Foundation of Hawaii.

Your Committee finds that lands used by the Department of Hawaiian Home Lands to provide homesteads for native Hawaiians need to be offered at affordable rates when compared to similar developments in Hawaii. Therefore, this measure exempts any homestead development for the Department of Hawaiian Home Lands from general excise taxes.

Your Committee has amended this measure by:

(1) Clarifying that the exempt homestead developments for native Hawaiians must be on Hawaiian home lands;

(2) Adding a commensurate use tax exemption in section 238‑3, Hawaii Revised Statutes;

(3) Requiring the Department of Hawaiian Home Lands and the Department of Taxation to adopt administrative rules to implement the tax exemption; and

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

As affirmed by the record of votes of the members of your Committee on Hawaiian Affairs that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 3101, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 3101, S.D. 1, and be referred to your Committee on Ways and Means.

Respectfully submitted on behalf of the members of the Committee on Hawaiian Affairs,

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MAILE S.L. SHIMABUKURO, Chair