STAND. COM. REP. NO. 924

Honolulu, Hawaii

RE: S.B. No. 645

S.D. 2

Honorable Ronald D. Kouchi

President of the Senate

Thirty-First State Legislature

Regular Session of 2021

State of Hawaii

Sir:

Your Committee on Ways and Means, to which was referred S.B. No. 645, S.D. 1, entitled:

"A BILL FOR AN ACT RELATING TO TAXATION,"

begs leave to report as follows:

The purpose and intent of this measure is to amend the county surcharge on state tax.

More specifically, this measure:

(1) Extends the period in which a county may adopt a surcharge on state tax, under certain conditions; and

(2) Authorizes the use of county surcharge revenues for affordable and workforce housing infrastructure.

Your Committee received written comments in support of this measure from a member of the Maui County Council.

Your Committee received written comments on this measure from the Department of Taxation, Maui Chamber of Commerce, NAIOP Hawaii, and Tax Foundation of Hawaii.

Your Committee finds that this measure supports the development of affordable and workforce housing, which will allow skilled employees to remain in the State, instead of leaving due to a lack of affordable housing options.

Your Committee has amended this measure by:

(1) Changing the date by which a county may adopt a surcharge on state tax from July 1, 2023, to July 1, 2022;

(2) Changing the date upon which the Department of Taxation is authorized to begin levying the surcharge from July 1, 2023, to January 1, 2023; and

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

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. 645, S.D. 1, as amended herein, and recommends that it pass Third Reading in the form attached hereto as S.B. No. 645, 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