STAND. COM. REP. NO. 515
RE: S.B. No. 924
Honorable Ronald D. Kouchi
President of the Senate
Thirty-Second State Legislature
Regular Session of 2023
State of Hawaii
Your Committee on Housing, to which was referred S.B. No. 924 entitled:
"A BILL FOR AN ACT RELATING TO TAXATION,"
begs leave to report as follows:
The purpose and intent of this measure is to:
(1) Eliminate the home mortgage interest deduction for second homes under Hawaii income tax law; and
(2) Require the amount of state revenue gained by eliminating the deduction to be deposited into the Rental Housing Revolving Fund.
Your Committee received testimony in support of this measure from one individual. Your Committee received testimony in opposition to this measure from Hawai‘i Association of REALTORS. Your Committee received comments on this measure from the Department of Taxation, Department of Budget and Finance, and Tax Foundation of Hawaii.
Your Committee finds that more incentives should be directed toward helping residents purchase their first home, rather than toward encouraging ownership of a second home. Not allowing the deduction of mortgage interest for a second home would generate revenues for the State and expand access to affordable housing.
Your Committee has amended this measure by requiring the amount of state revenue gained by eliminating the mortgage interest deduction for a second home to be deposited into the Dwelling Unit Revolving Fund.
Should your Committee on Ways and Means choose to deliberate on this measure, your Committee respectfully requests that it, along with the Department of Taxation, explore ways to best assess the amount of state revenue that will be generated from eliminating the home mortgage interest deduction as provided in this measure.
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. 924, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 924, 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