STAND. COM. REP. NO. 451

Honolulu, Hawaii

RE: S.B. No. 1405

S.D. 1

Honorable Ronald D. Kouchi

President of the Senate

Thirty-Third State Legislature

Regular Session of 2025

State of Hawaii

Sir:

Your Committees on Hawaiian Affairs and Housing, to which was referred S.B. No. 1405 entitled:

"A BILL FOR AN ACT RELATING TO HOUSING,"

beg leave to report as follows:

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

Your Committees received testimony in support of this measure from the Department of Hawaiian Home Lands; Dowling Company, Inc.; and one individual.

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

Your Committees find that the Department of Hawaiian Home Lands currently has several development projects that are either underway or in the pipeline for construction, and that the general excise tax exemption established by this measure could produce cost savings for the Department that could be used to develop more homestead lots. This measure will ensure that amounts received related to planning, design, financing, or construction activities conducted for a new construction, moderate rehabilitation, or substantial rehabilitation project for homestead lots or housing for the Department of Hawaiian Home Lands are exempt from general tax so that the Department of Homelands can fund their many projects.

Your Committees have amended this measure by:

(1) Requiring the Department of Hawaiian Home Lands to submit annual reports to the Legislature detailing cost savings, reinvestments, and housing production increases resulting from the tax exemption for five years; and

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

As affirmed by the records of votes of the members of your Committees on Hawaiian Affairs and Housing that are attached to this report, your Committees are in accord with the intent and purpose of S.B. No. 1405, as amended herein, and recommend that it pass Second Reading in the form attached hereto as S.B. No. 1405, S.D. 1, and be referred to your Committee on Ways and Means.

Respectfully submitted on behalf of the members of the Committees on Hawaiian Affairs and Housing,

________________________________ STANLEY CHANG, Chair

________________________________ HERBERT RICHARDS, Chair