STAND. COM. REP. NO. 92

Honolulu, Hawaii

RE: S.B. No. 24

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 Housing and Commerce and Consumer Protection, to which was referred S.B. No. 24 entitled:

"A BILL FOR AN ACT RELATING TO LIMITED-PROFIT HOUSING ASSOCIATIONS,"

beg leave to report as follows:

The purpose and intent of this measure is to:

(1) Establish an organizational, tax, and regulatory framework for limited-profit housing associations; and

(2) Establish the Limited‑Profit Housing Council to oversee limited-profit housing associations.

Your Committees received testimony in support of this measure from one individual.

Your Committees received comments on this measure from the Department of Taxation.

Your Committees find that limited-profit housing associations are private companies that develop and manage residential housing units that are characterized by a distinct business model wherein profits are revolved to finance the future of affordable housing construction. Additionally, rents for units in a development owned by a limited-profit housing association are fixed to account for costs such as construction, operating and management, and routine repair and maintenance. As limited-profit housing associations are restricted in the types of activities that may be undertaken and rent amounts that may be collected, this model offers the State an opportunity to incentivize the development of housing at the scale needed to address the state's ongoing housing shortage.

Your Committees have amended this measure by:

(1) Deleting references to "affordable housing" and instead using the term "housing developed exclusively for qualified residents as defined in section 201H-32, Hawaii Revised Statutes"; 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 Housing and Commerce and Consumer Protection that are attached to this report, your Committees are in accord with the intent and purpose of S.B. No. 24, as amended herein, and recommend that it pass Second Reading in the form attached hereto as S.B. No. 24, S.D. 1, and be referred to your Committees on Ways and Means and Judiciary.

Respectfully submitted on behalf of the members of the Committees on Housing and Commerce and Consumer Protection,

________________________________ JARRETT KEOHOKALOLE, Chair

________________________________ STANLEY CHANG, Chair