STAND. COM. REP. NO. 648

 

Honolulu, Hawaii

                   

 

RE:     S.B. No. 771

        S.D. 1

 

 

 

Honorable Ronald D. Kouchi

President of the Senate

Thirtieth State Legislature

Regular Session of 2019

State of Hawaii

 

Sir:

 

     Your Committee on Housing, to which was referred S.B. No. 771 entitled:

 

"A BILL FOR AN ACT RELATING TO AFFORDABLE HOUSING,"

 

begs leave to report as follows:

 

     The purpose and intent of this measure is to establish an income tax credit for taxpayers who lease housing to certain low-income tenants.

 

     Your Committee received testimony in support of this measure from the Hawaii Public Housing Authority, Oahu County Committee on Legislative Priorities of the Democratic Party of Hawaii, and one individual.  Your Committee received comments on this measure from the Department of Taxation and Tax Foundation of Hawaii.

 

     Your Committee finds that the affordable housing crisis in Hawaii extends to the lack of affordable rentals, particularly in high visitor traffic areas.  This lack of affordable rentals hurts the quality of service, diminishes Hawaii's appeal in the visitor industry, and stresses the State's infrastructure, due to increased traffic.  Your Committee further finds that the lack of affordable rental homes in these areas is also due to the high costs of property ownership, which encourages many landlords to enter into interval or short-term rentals rather than workforce-eligible rentals.  This measure provides an economic incentive to make available more immediate affordable housing rentals for workforce-eligible people who are in the most need.

 

     Your Committee notes that the approximately two hundred section 8 recipients are currently searching for housing to rent.  Your Committee further notes that this measure may require further discussion about the best mechanism to cap the affordable rental housing income tax credit, whether per eligible unit or per taxpayer.  Your Committee also recognizes the concerns regarding the verification process of income and concerns expressed by the Department of Taxation regarding tenants and landlords who are related.

 

     Your Committee has amended this measure by:

 

     (1)  Inserting a blank amount for the maximum amount of tax credits that may be claimed by a taxpayer per taxable year;

 

     (2)  Clarifying the definition of "eligible tenant" to mean a family or an individual whose income is less than thirty percent of the area median income; and

 

     (3)  Inserting an effective date of July 1, 2050, to encourage further discussion.

 

     As affirmed by the record of votes of the members of your Committee on Housing that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 771, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 771, S.D. 1, and be referred to your Committee on Ways and Means.

 

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

 

 

 

________________________________

STANLEY CHANG, Chair