STAND. COM. REP. NO. 769

Honolulu, Hawaii

RE: S.B. No. 1568

S.D. 2

Honorable Ronald D. Kouchi

President of the Senate

Thirty-Second State Legislature

Regular Session of 2023

State of Hawaii

Sir:

Your Committee on Ways and Means, to which was referred S.B. No. 1568, S.D. 1, entitled:

"A BILL FOR AN ACT RELATING TO TAXATION,"

begs leave to report as follows:

The purpose and intent of this measure is to amend the county surcharge on state tax.

More specifically, this measure:

(1) Extends the period in which a county may adopt a surcharge on state tax, under certain conditions, from March 31, 2019, to December 31, 2023;

(2) Authorizes, in certain instances, the use of county surcharge revenues for housing infrastructure; and

(3) Temporarily authorizes counties that have previously adopted a surcharge on state tax to amend the rates and uses of the surcharge.

Your Committee received written comments in support of this measure from the Hawaii Housing Finance and Development Corporation, Office of the Mayor of the County of Maui, Maui Hotel and Lodging Association, and one individual.

Your Committee received written comments in opposition to this measure from one individual.

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

Your Committee finds that the development of housing is of critical importance to the State. Your Committee also finds that the high cost of infrastructure is a factor that makes homes expensive, to the point of being unobtainable for many local families. Your Committee further finds that making counties, rather than private developers, responsible for the location, planning, and development of infrastructure to support housing would result in more efficient community planning.

Your Committee has amended this measure by:

(1) Clarifying that any change to a county's surcharge rate shall take effect on January 1, 2025; and

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

As affirmed by the record of votes of the members of your Committee on Ways and Means that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 1568, S.D. 1, as amended herein, and recommends that it pass Third Reading in the form attached hereto as S.B. No.1568, S.D. 2.

Respectfully submitted on behalf of the members of the Committee on Ways and Means,

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DONOVAN M. DELA CRUZ, Chair