STAND. COM. REP. NO. 210

Honolulu, Hawaii

, 2025

RE: H.B. No. 741

H.D. 1

Honorable Nadine K. Nakamura

Speaker, House of Representatives

Thirty-Third State Legislature

Regular Session of 2025

State of Hawaii

Madame:

Your Committee on Housing, to which was referred H.B. No. 741 entitled:

"A BILL FOR AN ACT RELATING TO HOUSING,"

begs leave to report as follows:

The purpose of this measure is to exempt certain projects funded by the Affordable Homeownership Revolving Fund from prevailing wages provisions.

Your Committee received testimony in support of this measure from the Hawaii Housing Finance and Development Corporation; Hawaii Habitat for Humanity Association; Hawaiʻi Community Lending; and Maui Chamber of Commerce.

Your Committee finds that the high cost of construction labor, driven by prevailing wage requirements, has become a significant barrier to the development of affordable housing in the State, particularly for smaller-scale projects. These added costs often discourage developers from pursuing affordable housing projects, slowing efforts to address the critical housing shortage. This measure will alleviate this burden by exempting certain small-scale projects funded through the Affordable Homeownership Revolving Fund from prevailing wages requirements. This narrowly-tailored exemption will help nonprofit developers maximize the impact of this limited funding and produce more affordable homeownership opportunities for Hawaii residents.

Your Committee has amended this measure by:

(1) Inserting a purpose section;

(2) Clarifying that an affordable housing project financed by a certified nonprofit community development financial institution utilizing less than $1,500,000 of monies from the Affordable Homeownership Revolving Fund are exempt from prevailing wages provisions;

(3) Changing the effective date to July 1, 3000, to encourage further discussion; and

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

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. 741, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 741, H.D. 1, and be referred to your Committee on Labor.

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

____________________________

LUKE A. EVSLIN, Chair