STAND. COM. REP. NO. 3114

Honolulu, Hawaii

RE: H.B. No. 2787

H.D. 2

S.D. 1

Honorable Ronald D. Kouchi

President of the Senate

Thirty-Second State Legislature

Regular Session of 2024

State of Hawaii

Sir:

Your Committee on Housing, to which was referred H.B. No. 2787, H.D. 2, entitled:

"A BILL FOR AN ACT RELATING TO THE INDIVIDUAL HOUSING ACCOUNT PROGRAM,"

begs leave to report as follows:

The purpose and intent of this measure is to:

(1) Increase the maximum amount of deductible contributions for individual housing accounts; and

(2) Require and appropriate funds for the Department of Taxation to create and implement a public awareness campaign about individual housing accounts.

Your Committee received testimony in support of this measure from the Maui Chamber of Commerce, Grassroot Institute of Hawaii, and two individuals.

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

Your Committee finds that the current median home value in the State is estimated to be between $820,000 and $977,000. The existing maximum allowed contribution under the State's Individual Housing Account Program is $25,000 per year, which has not been increased since the program was established in 1982. At these current rates, a minimum of eight years of savings would be required just for a down payment. Your Committee further finds that saving for a down payment for the purchase of a home continues to be a barrier for many Hawaii residents, with few programs available to assist in this endeavor. Therefore, this measure will incentivize home ownership for first time buyers by increasing the maximum contributions to individual housing accounts as an allowable tax deduction to enable buyers to save for a down payment and closing costs.

Your Committee has amended this measure by:

(1) Inserting an effective date of July 1, 2050, to encourage further discussion; and

(2) 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 H.B. No. 2787, H.D. 2, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 2787, H.D. 2, S.D. 1, and be referred to your Committee on Ways and Means.

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

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STANLEY CHANG, Chair