STAND. COM. REP. NO. 516

Honolulu, Hawaii

RE: S.B. No. 1462

S.D. 1

Honorable Ronald D. Kouchi

President of the Senate

Thirty-Second State Legislature

Regular Session of 2023

State of Hawaii

Sir:

Your Committee on Housing, to which was referred S.B. No. 1462 entitled:

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

begs leave to report as follows:

The purpose and intent of this measure is to establish an organizational and regulatory framework for limited-profit housing associations.

Your Committee received testimony in support of this measure from one individual. Your Committee received comments on this measure from the Department of Commerce and Consumer Affairs; Department of Business, Economic Development, and Tourism; Department of Taxation; and Office of the Auditor.

Your Committee finds that it would be in the best interest of the State to consider Vienna's Limited-Profit Housing Act of 1979 as a model to sustainably finance the development of affordable housing in the State. Profits generated by a limited-profit housing association are used to build more housing, which means that each new public housing project built enables the creation of more housing. This measure offers entrepreneurs and investors a sustainable option to develop long-term housing in the State.

Your Committee has amended this measure by:

(1) Deleting language that would have:

(A) Required the State Auditor or their designee to serve as the chair of the Limited-Profit Housing Council;

(B) Required the Commissioner of Financial Institutions or their designee to serve on the Limited-Profit Housing Council;

(C) Required limited-profit housing associations to undergo an annual audit and publicly post an annual report;

(D) Defined and established limited-profit housing supervisory boards; and

(E) Established two working groups;

(2) Inserting language that requires the Executive Directors of the Hawaii Housing Finance and Development Corporation and Hawaii Public Housing Authority to serve as co-chairs of the Limited-Profit Housing Council; and

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

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 S.B. No. 1462, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 1462, S.D. 1, and be referred to your Committee on Commerce and Consumer Protection.

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

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STANLEY CHANG, Chair