SB448

PART I

SECTION 1. The legislature finds that lands utilized by the department of Hawaiian home lands to provide housing for native Hawaiians are offered at affordable rates when compared to similar housing available in Hawaii. The purpose of this part is to exempt any housing development for the department of Hawaiian home lands from general excise taxes.

SECTION 2. Chapter 237, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"§237- Exemptions for any housing development for the department of Hawaiian home lands. (a) All gross income received by any qualified person or firm for the planning, design, financing, or construction of any housing development for the department of Hawaiian home lands shall be exempt from the tax imposed by this chapter.

(b) The department of Hawaiian home lands may approve and certify for exemption from general excise tax any qualified person or firm involved with a newly constructed, or a moderately or substantially rehabilitated, project that is:

(1) Developed under a government assistance program approved by the department of Hawaiian home lands;

(2) Developed under the sponsorship of a private nonprofit organization providing home rehabilitation or new homes for beneficiaries in need of decent, safe and sanitary, low-cost housing;

(3) Developed by a qualified person or firm to provide affordable rental housing where at least fifty per cent of the available units are for households with incomes at or below eighty per cent of the area median family income as determined by the United States Department of Housing and Urban Development; or

(4) Developed by contract or project developer agreement to provide affordable housing through new construction or substantial rehabilitation; provided that:

(A) The allowable general excise tax and use tax costs shall apply to contracting only and shall not exceed $30,000,000 per year in the aggregate for all projects approved and certified by the department of Hawaiian home lands; and

(B) At least twenty per cent of the available units are for households with incomes at or below eighty per cent of the area median family income as determined by the United States Department of Housing and Urban Development.

(c) To obtain certification for exemption under this section, housing projects shall, unless exempted by the department of Hawaiian home lands, be covered by a regulatory agreement with the department of Hawaiian home lands to ensure the project's continued compliance with the applicable eligibility requirements of subsection (b).

(d) All claims for exemption under this section shall be filed with and certified by the department of Hawaiian home lands and forwarded to the department of taxation. Any claim for exemption that is filed and approved shall not be considered a subsidy.

(e) For purposes of this section:

"Moderate rehabilitation" means rehabilitation to upgrade a dwelling unit to a decent, safe, and sanitary condition, or to repair or replace major building systems or components in danger of failure.

"Qualified person or firm" means any individual, partnership, joint venture, corporation, association, limited liability partnership, limited liability company, business, trust, or any organized group of persons or legal entities, or any combination thereof, which possesses all professional or vocational licenses necessary to do business in the State in conjunction with the planning, design, financing, and construction, including materials and supplies for new construction, moderate rehabilitation, and substantial rehabilitation; sale; or rental of projects under the sponsorship of the department of Hawaiian home lands.

"Substantial rehabilitation" means the improvement of a property to a decent, safe, and sanitary condition that requires more than routine or minor repairs or improvements. It may include but is not limited to the gutting and extensive reconstruction of a dwelling unit, or cosmetic improvements coupled with the curing of a substantial accumulation of deferred maintenance and includes renovation, alteration, or remodeling to convert or adapt structurally sound property to the design and condition required for a specific use, such as conversion of a hotel to housing for elders.

(f) The department of Hawaiian home lands may establish, revise, charge, and collect a reasonable service fee, as necessary, in connection with its approvals and certifications under this section. The fees shall be deposited into the Hawaiian home administration account pursuant to section 10-13."

PART II

SECTION 3. The legislature finds that lands utilized by the department of Hawaiian home lands to provide housing for native Hawaiians are offered at affordable rates when compared to similar housing available in Hawaii. Since the enactment of the Hawaiian Homes Commission Act, 1920, as amended, lands set aside for use as Hawaiian home lands have been withdrawn for other purposes, including public schools. Moreover, development on Hawaiian home lands often accounts for the educational facilities that may be needed to support the community with the siting of public schools, public charter schools, early learning facilities, and other similar facilities on or near Hawaiian home lands. The purpose of this part is to exempt any housing development for the department of Hawaiian home lands from school impact fee requirements.

SECTION 4. Section 302A-1603, Hawaii Revised Statutes, is amended by amending subsection (b) to read as follows:

"(b) The following shall be exempt from this section:

(1) Any form of housing permanently excluding school-aged children, with the necessary covenants or declarations of restrictions recorded on the property;

(2) Any form of housing that is or will be paying the transient accommodations tax under chapter 237D;

(3) All nonresidential development; [~~and~~]

(4) Any development with an executed education contribution agreement or other like document with the agency for the contribution of school sites or payment of fees for school land or school construction[.] and

(5) Any housing development for the department of Hawaiian home lands certified pursuant to section 237- ."

PART III

SECTION 5. Act 279, Session Laws of Hawaii 2022, is amended by amending section 6 to read as follows:

"SECTION 6. There is appropriated out of the general revenues of the State of Hawaii the sum of $600,000,000 or so much there of as may be necessary for fiscal year 2021-2022 for the purposes of this Act; provided that any moneys not encumbered for specific purposes shall lapse to the general fund on June 30, [~~2025.~~] 20 .

The sum appropriated shall be expended by the department of Hawaiian home lands for the purposes of this Act."

PART IV

SECTION 6. Act 141, Session Laws of Hawaii 2009, as amended by section 3 of Act 102, Session Laws of Hawaii 2015, as amended by section 1 of Act 80, Session laws of Hawaii 2019, is amended by amending section 3 to read as follows:

"SECTION 3. This Act shall take effect on July 1, 2009; provided that on June 30, [~~2024,~~] 20 , this Act shall be repealed and section 46-15.1, Hawaii Revised Statutes, shall be reenacted in the form in which it read on the day before the approval of this Act."

PART V

SECTION 7. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 8. This Act shall take effect upon its approval.

INTRODUCED BY:	_____________________________

THE SENATE	S.B. NO.	448
THIRTY-SECOND LEGISLATURE, 2023
STATE OF HAWAII