STAND. COM. REP. NO. 1045

Honolulu, Hawaii

RE: S.B. No. 1033

S.D. 2

Honorable Ronald D. Kouchi

President of the Senate

Thirty-Third State Legislature

Regular Session of 2025

State of Hawaii

Sir:

Your Committees on Ways and Means and Judiciary, to which was referred S.B. No. 1033, S.D. 1, entitled:

"A BILL FOR AN ACT RELATING TO TAXATION,"

beg leave to report as follows:

The purpose and intent of this measure is to address the housing shortage in the State.

More specifically, this measure:

(1) Establishes an excise tax on certain taxpayers who own excess single-family residences for failing to sell those residences;

(2) Establishes and allocates excise tax revenues to the Housing Downpayment Trust Fund; and

(3) Requires annual reports to the Legislature.

Your Committees received written comments in opposition to this measure from the Aloha Freedom Coalition and ten individuals.

Your Committees received written comments on this measure from the Department of Taxation and Tax Foundation of Hawaii.

Your Committees find that, in recent years, certain entities, including large private equity hedge funds, have purchased large portfolios of foreclosed homes, preventing ordinary families and nonprofit organizations from being able to purchase those homes. Your Committees also find that this trend has continued at an alarming and accelerating rate, contributing to a critical shortage of affordable housing in the State.

Your Committees note that, although the intent of this measure is to reduce corporate ownership of single family residences and provide opportunities for individuals to purchase homes, your Committees have concerns that family corporations or individuals who own multiple properties may become subject to the excise tax established by this measure.

Your Committees have amended this measure by clarifying that the term "applicable taxpayer" does not include an individual.

As affirmed by the records of votes of the members of your Committees on Ways and Means and Judiciary that are attached to this report, your Committees are in accord with the intent and purpose of S.B. No. 1033, S.D. 1, as amended herein, and recommend that it pass Third Reading in the form attached hereto as S.B. No. 1033, S.D. 2.

Respectfully submitted on behalf of the members of the Committees on Ways and Means and Judiciary,

________________________________ KARL RHOADS, Chair

________________________________ DONOVAN M. DELA CRUZ, Chair