STAND. COM. REP. NO. 626

Honolulu, Hawaii

RE:    S.B. No. 1917

       S.D. 2

Honorable Colleen Hanabusa

President of the Senate

Twenty-Fourth State Legislature

Regular Session of 2007

State of Hawaii

Madam:

     Your Committee on Economic Development and Taxation, to which was referred S.B. No. 1917, S.D. 1, entitled:

"A BILL FOR AN ACT RELATING TO HOUSING,"

begs leave to report as follows:

     The purpose of this measure is to expand housing opportunities for Hawaii residents by:

     (1)  Extending the sunset date for the allocation of conveyance tax revenues to the Rental Housing Trust Fund;

     (2)  Requiring the Hawaii Housing Finance and Development Corporation to create an affordable housing inventory registry; and

     (3)  Appropriating funds for various homeless and housing programs and projects.

     Testimony in support of this measure was received from the Hawaii Housing Finance and Development Corporation, Hawaii Public Housing Authority, City and County of Honolulu Department of Community Services, McCully-Moiliili Neighborhood Board #8, Hawaii Family Forum, Catholic Charities Hawai‘i, Partners in Care, Hawaii Association of REALTORS, and one individual.  The Department of Taxation and the Tax Foundation of Hawaii submitted comments.

     Your Committee finds that affordable housing is one of the top public concerns in Hawaii, and the problem is compounded by the spike in land and housing prices in recent years.  This measure attempts to address the problem through a combination of direct appropriations and increasing the dedicated source of funding through the conveyance tax.

     Your Committee received a revenue impact statement from the Department of Taxation (Department) that the general fund tax revenue would lose $11,800,000 for fiscal years 2008 and 2009, and the Rental Housing Trust Fund would gain the same amounts.  The Department also stated that in fiscal year 2006, conveyance tax collections were $59,200,000.

     Your Committee is strongly supportive of providing financing options for affordable housing, but believes the proposal to again raise the percentage of the conveyance tax earmarked for the Rental Housing Trust Fund merits further legislative deliberations.

     Your Committee has amended this measure by making section 6, relating to the conveyance tax transfers, effective July 1, 2020, for purposes of further discussion.  Your Committee has also made a technical, nonsubstantive amendment for the purpose of clarity.

     As affirmed by the record of votes of the members of your Committee on Economic Development and Taxation that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 1917, S.D. 1, as amended herein, and recommends that it be referred to the Committee on Ways and Means, in the form attached hereto as S.B. No. 1917, S.D. 2.

Respectfully submitted on behalf of the members of the Committee on Economic Development and Taxation,

____________________________

CAROL FUKUNAGA, Chair