HOUSE OF REPRESENTATIVES

H.B. NO.

2703

TWENTY-NINTH LEGISLATURE, 2018

H.D. 1

STATE OF HAWAII

 

 

 

 

 

 

A BILL FOR AN ACT

 

 

RELATING TO HOUSING AFFORDABILITY.

 

 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

 


PART I

SECTION 1. The legislature finds that affordable housing is a serious concern for many Hawaii residents. As the population of the State continues to grow, the State must develop innovative means of ensuring that residents are able to find and pay for housing.

The legislature also finds that amendments to the state tax code could be used to assist low-income wage earners in affording housing without significant negative impact on the State's fiscal status. First, increasing the existing refundable income tax credit for low-income household renters and converting the state earned income tax credit into a refundable tax credit could provide low- to moderate-income working families with immediate access to additional funds that may be used to help pay their rent. Also, the distribution of conveyance tax revenues could be amended to provide a dedicated source of funding for the rental assistance revolving fund to provide assistance to low-income residents.

The purpose of this Act is to:

(1) Allocate a portion of the conveyance tax revenues to the rental assistance revolving fund to be used to subsidize rents for persons who meet certain income requirements;

(2) Increase the income tax credit for low-income household renters to an unspecified amount; and

(3) Convert the state earned income tax credit into a refundable tax credit and change the amount of the credit to an unspecified percentage of the federal earned income tax credit.

PART II

SECTION 2. Section 201H-123, Hawaii Revised Statutes, is amended by amending subsections (b) and (c) to read as follows:

"(b) The rental assistance revolving fund may include sums made available from any government program or grant, from private grants or contributions, from the proceeds of any bond issue, conveyance tax revenues pursuant to section 247-7(3), or from appropriations to the fund. The aggregate principal in the fund shall be invested by the corporation in a manner that [will maximize] maximizes the rate of return on investment of the fund; provided that any investment made shall be consistent with section 201H-77 but need not comply with section 36-21.

(c) The corporation may use, as needed, the aggregate principal sum and the accumulated earnings in the rental assistance revolving fund to make payments under rental assistance contracts or to subsidize tenants' rents in eligible projects developed under this part; provided that [the]:

(1) The corporation shall use up to $25,000,000 plus any bond proceeds to provide interim construction financing to:

[(1)] (A) Qualified sponsors who are private nonprofit or for-profit entities; or

[(2)] (B) The corporation, for the development of affordable rental housing;

(2) [provided further that the] The corporation, in allotting interim construction financing moneys pursuant to this subpart, shall give preference to rental housing projects developed by qualified sponsors who are private nonprofit or for-profit entities[.]; and

(3) Conveyance tax revenues deposited into the rental assistance revolving fund pursuant to section 247-7(3) shall only be used to subsidize rents for individuals or families whose income does not exceed thirty per cent of the area median income as determined by the United States Department of Housing and Urban Development."

SECTION 3. Section 247-7, Hawaii Revised Statutes, is amended to read as follows:

"247-7 Disposition of taxes. All taxes collected under this chapter shall be paid into the state treasury to the credit of the general fund of the State, to be used and expended for the purposes for which the general fund was created and exists by law; provided that of the taxes collected each fiscal year:

(1) Ten per cent or $6,800,000, whichever is less, shall be paid into the land conservation fund established pursuant to section 173A-5; [and]

(2) Fifty per cent or $38,000,000, whichever is less, shall be paid into the rental housing revolving fund established by section 201H-202[.]; and

(3)       per cent or      , whichever is less, shall be paid into the rental assistance revolving fund established by section 201H-123."

PART III

SECTION 4. Section 235-55.7, Hawaii Revised Statutes, is amended by amending subsection (c) to read as follows:

"(c) Each taxpayer with an adjusted gross income of less than $30,000 who has paid more than $1,000 in rent during the taxable year for which the credit is claimed may claim a tax credit of [$50] $         multiplied by the number of qualified exemptions to which the taxpayer is entitled; provided each taxpayer sixty-five years of age or over may claim double the tax credit; and provided that a resident individual who has no income or no income taxable under this chapter may also claim the tax credit as set forth in this section."

PART IV

SECTION 5. Section 235-55.75, Hawaii Revised Statutes, is amended as follows:

1. By amending subsection (a) to read:

"(a) Each qualifying individual taxpayer may claim a [nonrefundable] refundable earned income tax credit. The tax credit, for the appropriate taxable year, shall be [twenty]       per cent of the federal earned income tax credit allowed and properly claimed under section 32 of the Internal Revenue Code and reported as such on the individual's federal income tax return."

2. By amending subsection (d) to read:

"(d) The credit allowed under this section shall be claimed against the net income tax liability for the taxable year. If the tax credit under this section exceeds the taxpayer's income tax liability, the excess of the tax credit over liability [may be used as a credit against the taxpayer's net income tax liability in subsequent years until exhausted.] shall be refunded to the taxpayer; provided that the tax credit claimed by a taxpayer who has no income tax liability shall be paid to the taxpayer; and provided that no refunds or payment on account of the tax credit allowed by this section shall be made for amounts less than $1. All claims, including amended claims, for a tax credit under this section shall be filed on or before the end of the twelfth month following the close of the taxable year for which the credit may be claimed. Failure to comply with the foregoing provision shall constitute a waiver of the right to claim the credit."

PART V

SECTION 6. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 7. This Act shall take effect on January 1, 2050; provided that:

(1) Part II shall take effect on January 1, 2050; and

(2) Parts III and IV shall apply to taxable years beginning after December 31, 2017.


 


 

Report Title:

Conveyance Tax; Rental Assistance Revolving Fund; Earned Income Tax Credit; Income Tax Credit for Low-Income Household Renters

 

Description:

(1) Allocates a portion of the conveyance tax revenues to the rental assistance revolving fund to be used to subsidize rents for persons who meet certain income requirements; (2) Increases the income tax credit for low-income household renters to an unspecified amount; and (3) Makes the state earned income tax credit refundable and changes the amount of the credit to an unspecified percentage of the federal earned income tax credit. (HB2703 HD1)

 

 

 

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