STAND. COM. REP. NO. 127

Honolulu, Hawaii

RE: S.B. No. 1099

Honorable Ronald D. Kouchi

President of the Senate

Thirty-Second State Legislature

Regular Session of 2023

State of Hawaii

Sir:

Your Committee on Public Safety and Intergovernmental and Military Affairs, to which was referred S.B. No. 1099 entitled:

"A BILL FOR AN ACT RELATING TO TAXATION,"

begs leave to report as follows:

The purpose and intent of this measure is to:

(1) Extend the period in which a county may adopt a surcharge on state tax, under certain conditions;

(2) Authorize the use of the surcharge revenues for affordable and workforce housing infrastructure; and

(3) Allow the counties to use surcharge revenues for housing infrastructure, including roadways, water, and sewer.

Your Committee received testimony in support of this measure from the Office of the Mayor of the County of Maui and two members of the Maui County Council. Your Committee received testimony in opposition to this measure from one individual. Your Committee received comments on this measure from the Department of Taxation and Tax Foundation of Hawaii.

Your Committee finds that Maui County is the only county in the State that has not adopted a surcharge on state tax. Additionally, the high cost of living in Maui County often prevents residents from purchasing a home. Your Committee believes that a surcharge on state tax would provide much-needed revenue for Maui County to address its affordable housing crisis. This measure will generate funding to increase Maui County's ability to support affordable and workplace housing infrastructure by extending the period in which a county may adopt a surcharge on state tax, under certain conditions; authorizing the use of the surcharge revenues for affordable and workforce housing infrastructure; and allowing the counties to use surcharge revenues for housing infrastructure, including roadways, water, and sewer.

As affirmed by the record of votes of the members of your Committee on Public Safety and Intergovernmental and Military Affairs that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 1099 and recommends that it pass Second Reading and be referred to your Committee on Ways and Means.

Respectfully submitted on behalf of the members of the Committee on Public Safety and Intergovernmental and Military Affairs,

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GLENN WAKAI, Chair