STAND. COM. REP. NO. 2456

Honolulu, Hawaii

RE: S.B. No. 3333

S.D. 1

Honorable Ronald D. Kouchi

President of the Senate

Thirty-Third State Legislature

Regular Session of 2026

State of Hawaii

Sir:

Your Committees on Energy and Intergovernmental Affairs and Housing, to which was referred S.B. No. 3333 entitled:

"A BILL FOR AN ACT RELATING TO TAXATION,"

beg leave to report as follows:

The purpose and intent of this measure is to require each county to apply any applicable real property tax exemptions, reduced assessments, or tax classifications for any affordable housing subject to income, resale, or occupancy restrictions as of the date a qualifying owner takes title to the affordable housing for the upcoming tax period, consistent with county procedures.

Your Committees received testimony in support of this measure from the Hawaii Association of REALTORS, Nā Hale O Maui, and four individuals.

Your Committees received comments on this measure from the Tax Foundation of Hawaii.

Your Committees find that housing classified as "affordable" is a tool to help stabilize local communities and support workforce housing. However, under certain county ordinances, certain affordable housing units face unnecessary administrative barriers that can dramatically increase a homeowner's tax burden. Your Committees further find that affordable housing units or deed-restricted properties can be assessed and taxed as if they were unrestricted market-rate properties. Your Committees believe that providing affordable housing, including equitable real property tax treatment for these units, is essential to supporting the State's housing goals. Therefore, this measure will assist homebuyers of affordable housing units and promote fairness and long-term housing security for the State.

Your Committees have amended this measure by inserting an effective date of April 19, 2042, to encourage further discussion.

As affirmed by the records of votes of the members of your Committees on Energy and Intergovernmental Affairs and Housing that are attached to this report, your Committees are in accord with the intent and purpose of S.B. No. 3333, as amended herein, and recommend that it pass Second Reading in the form attached hereto as S.B. No. 3333, S.D. 1, and be referred to your Committee on Ways and Means.

Respectfully submitted on behalf of the members of the Committees on Energy and Intergovernmental Affairs and Housing,

________________________________ STANLEY CHANG, Chair

________________________________ GLENN WAKAI, Chair