STAND. COM. REP. NO. 206-26

Honolulu, Hawaii

, 2026

RE: H.B. No. 2147

H.D. 1

Honorable Nadine K. Nakamura

Speaker, House of Representatives

Thirty-Third State Legislature

Regular Session of 2026

State of Hawaii

Madame:

Your Committee on Education, to which was referred H.B. No. 2147 entitled:

"A BILL FOR AN ACT PROPOSING AMENDMENTS TO ARTICLES VIII AND X OF THE CONSTITUTION OF THE STATE OF HAWAII TO AUTHORIZE THE LEGISLATURE TO ESTABLISH A SURCHARGE ON RESIDENTIAL INVESTMENT PROPERTY TO INCREASE FUNDING FOR PUBLIC EDUCATION,"

begs leave to report as follows:

The purpose of this measure is to propose amendments to the Hawaii State Constitution to:

(1) Repeal the counties' exclusive power to tax real property; and

(2) Authorize the Legislature to establish a state surcharge on real property taxes levied by the counties on residential investment properties valued at $3,000,000 or more to increase funding for public education.

Your Committee received testimony in support of this measure from the State Public Charter School Commission; Hawaiʻi Teacher Standards Board; Hawaiʻi State Teachers Association; Democratic Party of Hawaiʻi Education Caucus; Hawaiʻi Children's Action Network Speaks!; Early Childhood Action Strategy; Hoaloha Project; and numerous individuals. Your Committee received testimony in opposition to this measure from the Hawaiʻi Association of REALTORS; Grassroot Institute of Hawaii; and one individual. Your Committee received comments on this measure from the Department of Education and Tax Foundation of Hawaii.

Your Committee finds that article X, section 1, of the Hawaii State Constitution requires the State to provide a system of public education. Your Committee notes that Hawaii is unique compared to the other states because the State, rather than a county of local level jurisdiction, is responsible for public education, resulting in funding for public education in Hawaii being primarily sourced from the general revenues of the State.

Your Committee further finds that public education in the State is not adequately funded. This inadequate funding has played an influential role for many families in Hawaii choosing to enroll their children in private schools, resulting in Hawaii having one of the highest rates of private school enrollment in the nation. Your Committee believes that a surcharge on certain residential investment property will provide additional funding for the State to better meet its educational responsibilities and prepare all students to meet the social and economic demands of the twenty-first century.

Your Committee has amended this measure by:

(1) Including a definition of "surcharge";

(2) Changing the effective date to July 1, 3000; and

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

As affirmed by the record of votes of the members of your Committee on Education that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 2147, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 2147, H.D. 1, and be referred to your Committee on Judiciary & Hawaiian Affairs.

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

____________________________

JUSTIN H. WOODSON, Chair