STAND. COM. REP. NO. 135

Honolulu, Hawaii

, 2025

RE: H.B. No. 949

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. 949 entitled:

"A BILL FOR AN ACT RELATING TO THE LOW-INCOME HOUSING TAX CREDIT,"

begs leave to report as follows:

The purpose of this measure is to:

(1) Clarify that a partner or member that is a partnership or limited liability company that has been allocated a Low-Income Housing Tax Credit may either further allocate the credit or transfer, sell, or assign all or a portion of the credit to any taxpayer; and

(2) Extend the sunset date of Act 129, Session Laws of Hawaii 2016, relating to the Low-Income Housing Tax Credit.

Your Committee received testimony in support of this measure from the Hawaii Housing Finance and Development Corporation; Mark Development, Inc.; EAH Housing; Ahe Group LLC; NAIOP Hawaii; Central Pacific Bank; and Kobayashi Group. Your Committee received comments on this measure from the Department of Taxation and Tax Foundation of Hawaii.

Your Committee finds that the expansion of the Low-Income Housing Tax Credit program is vital to addressing the ongoing shortage of affordable housing in the State. Your Committee believes that expanding the pool of investors for state tax credits will enhance the ability of affordable housing developers to raise equity efficiently, thereby leading to faster project funding, less reliance on other financing sources, and enhanced affordability for residents.

Your Committee has amended this measure by:

(1) Specifying the timeframe for reporting the transfer, sale, or assignment of the credit to the Department of Taxation; and

(2) Changing the effective date to July 1, 3000, to encourage further discussion.

Your Committee notes the request by the Department of Taxation to have this measure apply to taxable years beginning after December 31, 2025, rather than taxable years beginning after December 31, 2024, to provide sufficient time for the Department to implement the changes proposed by this measure.

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. 949, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 949, H.D. 1, and be referred to your Committee on Economic Development & Technology.

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

____________________________

LUKE A. EVSLIN, Chair