STAND. COM. REP. NO. 2020-26

Honolulu, Hawaii

, 2026

RE: S.B. No. 3028

S.D. 2

H.D. 2

Honorable Nadine K. Nakamura

Speaker, House of Representatives

Thirty-Third State Legislature

Regular Session of 2026

State of Hawaii

Madame:

Your Committee on Finance, to which was referred S.B. No. 3028, S.D. 2, H.D. 1, entitled:

"A BILL FOR AN ACT RELATING TO PROPERTY CONVEYANCE,"

begs leave to report as follows:

The purpose of this measure is to:

(1) Restructure the conveyance tax to a marginal rate system for the sale of properties with residential use, adjusts the tax for multifamily properties to reflect value on a per-unit basis, and applies a cost-of-living adjustment to conveyance tax rates;

(2) Allocate a portion of conveyance tax collections to the Dwelling Unit Revolving Fund, Hawaiian Home Lands Infrastructure and Housing Special Fund, and Special Land and Development Fund; and

(3) Establish and appropriate funds out of the Hawaiian Home Lands Infrastructure and Housing Special Fund.

Your Committee received testimony in support of this measure from the Department of Land and Natural Resources; Department of Hawaiian Home Lands; Chamber of Sustainable Commerce; Hawaiʻi Public Health Institute; Hiʻipaka LLC; Hawaiʻi Children's Action Network Speaks!; Hawaiʻi YIMBY; Hawaiʻi Appleseed Center for Law & Economic Justice; Association of Hawaiian Civic Clubs; HOPE Services Hawaii; Catholic Charities Hawaiʻi; Nation of Hawaiʻi; Indivisible Hawaiʻi; Friends of Amy B.H. Greenwell Ethnobotanical Garden; and numerous individuals. Your Committee received testimony in opposition to this measure from the Grassroot Institute of Hawaii; NAIOP Hawaii; Hawaiʻi Association of REALTORS; Land Use Research Foundation of Hawaii; and two individuals. Your Committee received comments on this measure from the Department of Taxation; Chamber of Commerce Hawaii; Tax Foundation of Hawaii; The Nature Conservancy, Hawaiʻi and Palmyra; and one individual.

Your Committee has amended this measure by:

(1) Removing the allocation of conveyance tax revenues to the Special Land and Development Fund for land acquisition for the Na Ala Hele Program;

(2) Establishing the Transit-Oriented Development Infrastructure Subaccount within the Dwelling Unit Revolving Fund to receive allocations from the conveyance tax revenues;

(3) Inserting tax rates for the conveyance of property with a residential dwelling unit, with different rates based on whether or not the purchaser is eligible for a county homeowner's exemption from property tax;

(4) Inserting tax rates for the conveyance of property with no residential dwelling unit that are the same as existing rates under section 247-2(1), Hawaii Revised Statutes;

(5) Inserting conveyance tax revenue allocation percentages and amounts; and

(6) 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 Finance that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 3028, S.D. 2, H.D. 1, as amended herein, and recommends that it pass Third Reading in the form attached hereto as S.B. No. 3028, S.D. 2, H.D. 2.

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

____________________________

CHRIS TODD, Chair