Bill Text: HI HB2448 | 2020 | Regular Session | Amended


Bill Title: Relating To Affordable Housing.

Spectrum: Partisan Bill (Democrat 12-0)

Status: (Engrossed) 2020-05-21 - Report adopted; Passed Second Reading, as amended (SD 1) and referred to WAM. [HB2448 Detail]

Download: Hawaii-2020-HB2448-Amended.html

HOUSE OF REPRESENTATIVES

H.B. NO.

2448

THIRTIETH LEGISLATURE, 2020

H.D. 1

STATE OF HAWAII

S.D. 1

 

 

 

 

 

A BILL FOR AN ACT

 

 

RELATING TO AFFORDABLE HOUSING.

 

 

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

 


     SECTION 1.  The legislature recognizes that Hawaii is experiencing a severe affordable housing crisis, with a lack of affordable rentals and affordable for-sale units.  According to the report "Measuring Housing Demand in Hawai'i, 2015-2025", published by the department of business, economic development, and tourism, the State is projected to require 64,693 additional housing units to meet housing demand by 2025.  Nearly seventy per cent, or 43,828, of those units will be needed for low-income households earning eighty per cent or less of the area median income.

     In response to this critical problem, the legislature enacted Act 127, Session Laws of Hawaii 2016, which established a goal of creating 22,500 new affordable rental units by 2026.

     The legislature finds that section 201H-36, Hawaii Revised Statutes, establishes an exemption from the state general excise tax for qualifying housing projects.  However, the legislature notes that some developers are unsure at what point in the development process this exemption begins.

     Accordingly, the purpose of this Act is to clarify that the exemption from the general excise tax established by section 201H-36, Hawaii Revised Statutes, shall be provided once the qualifying person or firm has filed or recorded a regulatory agreement in land court or the bureau of conveyances, or both, whichever is appropriate.

     SECTION 2.  Section 201H-36, Hawaii Revised Statutes, is amended to read as follows:

     "§201H-36  Exemption from general excise taxes.  (a)  In accordance with section 237-29, the corporation may approve and certify for exemption from general excise taxes any qualified person or firm involved with a newly constructed, or a moderately or substantially rehabilitated, project that is:

     (1)  Developed under this part;

     (2)  Developed under a government assistance program approved by the corporation, including but not limited to the United States Department of Agriculture's section 502 direct loan program and Federal Housing Administration's section 235 program;

     (3)  Developed under the sponsorship of a private nonprofit organization providing home rehabilitation or new homes for qualified families in need of decent, low-cost housing;

     (4)  Developed by a qualified person or firm to provide affordable rental housing where at least fifty per cent of the available units are for households with incomes at or below eighty per cent of the area median family income as determined by the United States Department of Housing and Urban Development, of which at least twenty per cent of the available units are for households with incomes at or below sixty per cent of the area median family income as determined by the United States Department of Housing and Urban Development; or

     (5)  Approved or certified from July 1, 2018, to June 30, 2030, and developed under a contract described in section 1042(i)(2) by a qualified person or firm to provide affordable rental housing through new construction or substantial rehabilitation; provided that:

          (A)  The allowable general excise tax and use tax costs shall apply to contracting only and shall not exceed $30,000,000 per year in the aggregate for all projects approved and certified by the corporation; and

          (B)  All available units are for households with incomes at or below one hundred forty per cent of the area median family income as determined by the United States Department of Housing and Urban Development, of which at least twenty per cent of the available units are for households with incomes at or below eighty per cent of the area median family income as determined by the United States Department of Housing and Urban Development; provided that an owner shall not refuse to lease a unit solely because the applicant holds a voucher or certificate of eligibility under section 8 of the United States Housing Act of 1937, as amended.

     (b)  To obtain certification for exemption under this section, rental housing projects shall, unless exempted by the corporation, enter into a regulatory agreement with the corporation to ensure the project's continued compliance with the applicable eligibility requirements set forth in subsection (a), as follows:

     (1)  For moderate rehabilitation projects, a minimum term of five years as specified in a regulatory agreement;

     (2)  For substantial rehabilitation projects, a minimum term of ten years as specified in a regulatory agreement; or

     (3)  For new construction projects, a minimum term of thirty years from the date of issuance of the certificate of occupancy.

     (c)  All claims for exemption under this section shall be filed with and certified by the corporation and forwarded to the department of taxation.  Any claim for exemption that is filed and approved, shall not be considered a subsidy for the purpose of this part.

     (d)  Notwithstanding any other law to the contrary, the exemption established by this section and certified by the corporation pursuant to subsection (c) shall commence upon the filing or recordation of a regulatory agreement entered into pursuant to subsection (b) in the office of the assistant registrar of the land court or bureau of conveyances, or both, whichever is appropriate.

     [(d)] (e)  For the purposes of this section:

     "Moderate rehabilitation" means rehabilitation to upgrade a dwelling unit to a decent, safe, and sanitary condition, or to repair or replace major building systems or components in danger of failure.

     "Substantial rehabilitation":

     (1)  Means the improvement of a property to a decent, safe, and sanitary condition that requires more than routine or minor repairs or improvements.  It may include but is not limited to the gutting and extensive reconstruction of a dwelling unit, or cosmetic improvements coupled with the curing of a substantial accumulation of deferred maintenance; and

     (2)  Includes renovation, alteration, or remodeling to convert or adapt structurally sound property to the design and condition required for a specific use, such as conversion of a hotel to housing for elders.

     [(e)] (f)  The corporation may establish, revise, charge, and collect a reasonable service fee, as necessary, in connection with its approvals and certifications under this section.  The fees shall be deposited into the dwelling unit revolving fund."

     SECTION 3.  This Act does not affect rights and duties that matured, penalties that were incurred, and proceedings that were begun before its effective date.

     SECTION 4.  Statutory material to be repealed is bracketed and stricken.  New statutory material is underscored.

     SECTION 5  This Act shall take effect on July 1, 2050.



 

Report Title:

HHFDC; Taxation; General Excise Tax; Exemption

 

Description:

Provides that an exemption from the general excise tax established by section 201H-36, Hawaii Revised Statutes, that has been approved by the Hawaii housing finance and development corporation shall be provided once the qualified person or firm has filed or recorded the regulatory agreement in land court or the bureau of conveyances, whichever is appropriate.  Effective 7/1/2050.  (SD1)

 

 

 

The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.9

 

 

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