| 1 | 1 | | THE SENATE S.B. NO. 2024 THIRTY-SECOND LEGISLATURE, 2024 STATE OF HAWAII A BILL FOR AN ACT RELATING TO LIMITED-PROFIT HOUSING ASSOCIATIONS. BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII: |
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| 3 | 3 | | THE SENATE S.B. NO. 2024 |
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| 4 | 4 | | THIRTY-SECOND LEGISLATURE, 2024 |
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| 5 | 5 | | STATE OF HAWAII |
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| 7 | 7 | | THE SENATE |
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| 9 | 9 | | S.B. NO. |
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| 11 | 11 | | 2024 |
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| 13 | 13 | | THIRTY-SECOND LEGISLATURE, 2024 |
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| 17 | 17 | | STATE OF HAWAII |
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| 31 | 31 | | A BILL FOR AN ACT |
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| 37 | 37 | | RELATING TO LIMITED-PROFIT HOUSING ASSOCIATIONS. |
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| 43 | 43 | | BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII: |
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| 47 | 47 | | PART I SECTION 1. Chapter 201, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows: "§201- Limited-profit housing council. (a) There is established the limited-profit housing council within the department of business, economic development, and tourism for administrative purposes, to oversee and administer the establishment and governance of limited-profit housing associations in the State. (b) The limited-profit housing council shall consist of the following members: (1) The executive director of the Hawaii housing finance and development corporation, who shall serve as the co-chair; (2) The executive director of the Hawaii public housing authority, who shall serve as the co-chair; (3) The director of the department of business, economic development, and tourism or the director's designee; (4) The attorney general or their designee; (5) The director of taxation or their designee; (6) The chairs of the standing committees of the senate and house of representatives with subject matter jurisdiction over housing or their designees; (7) A representative from the city and county of Honolulu's office of housing with experience in affordable housing development; (8) A representative from the county of Maui's housing division with experience in affordable housing development; (9) A representative from the county of Kauai's housing agency with experience in affordable housing development; and (10) A representative from the county of Hawaii's office of housing and community development with experience in affordable housing development. (c) Meetings shall be open to the public and subject to chapter 92. The co-chairs shall determine how often the council shall meet; provided that the council meets at least once a calendar year. (d) The department shall provide administrative support to the council and hire an administrator without regard to chapter 76, who shall be responsible for the day-to-day operations of the council. (e) The council may adopt rules under chapter 91 necessary to establish and govern limited-profit housing associations in the State." PART II SECTION 2. The Hawaii Revised Statutes is amended by adding a new chapter to be appropriately designated and to read as follows: "Chapter LIMITED-profit housing associations § ‑1 Purpose. The purpose of this chapter is to create long-term affordable housing in the State through the establishment of limited-profit housing associations. Every limited-profit housing association shall have the primary purpose of providing long-term affordable housing in the State. This includes devoting and reinvesting its assets, including its shareholders' equity, to generate affordable housing and regularly auditing its business operations to ensure that it is aligned with this primary purpose. This chapter authorizes a designation and code of conduct for an association to offer entrepreneurs and investors a sustainable option to develop long-term affordable housing in the State. § ‑2 Definitions. As used in this chapter: "Contractor" means any general engineering, general building, or specialty contractor, any subcontractor, or any person, who by oneself or through others offers to undertake, or holds oneself out as being able to undertake, or does undertake to alter, add to, subtract from, improve, enhance, or beautify any realty or construct, alter, repair, add to, subtract from, improve, move, wreck, or demolish any building, highway, road, railroad, excavation, or other structure, project, development, or improvement, or do any part thereof, including the erection of scaffolding or other structures or works in connection therewith. "Financial relationship" means a relationship between a person and a contractor, where: (1) The person is, or has been within the last three years, an employee of a contractor, its parent company, or its subsidiaries; (2) The person is related by blood, marriage, or adoption to; is a party to a civil union with; is a reciprocal beneficiary or household member of; or resides with a contractor or an officer or director of a contractor, its parent company, or its subsidiaries; or (3) The person or an association of which the person is a director, officer, or manager or in which the person owns beneficially or of record five per cent or more of the outstanding equity interests or the outstanding shares of a contractor, its parent company, or its subsidiaries. "Limited-profit housing association" or "association" means a domestic corporation, incorporated under chapter 414, that is approved by the limited-profit housing council to act as a limited-profit housing association and whose status as a limited-profit housing association has not been terminated as provided in this chapter. "Limited-profit housing council" or "council" means the council established pursuant to section 201- . § -3 Establishment; standards of conduct; termination. (a) A domestic corporation, incorporated under chapter 414, may establish itself as a limited-profit housing association upon approval from the council. If a corporation that is not a limited-profit housing association is a party to a merger, consolidation, or division, or is the exchanging corporation in a share exchange, and the surviving, new, or any resulting corporation in the merger, consolidation, division, or share exchange is to be a limited-profit housing association, then the plan of merger, consolidation, division, or share exchange shall not be effective unless approved by the council. (b) Upon approval of its limited-profit housing association status, the corporation shall include in its articles, or amend its articles to include, a statement that the corporation's primary purpose is to provide long-term affordable housing in the State and that the corporation shall devote its assets, including its shareholders' equity, to generate affordable housing and regularly check and monitor its business operations to ensure that it is aligned with this primary purpose. (c) All directors and officers of an association shall be independent of and shall have no financial relationship with any contractors. (d) The director of an association shall not be personally liable for monetary damages for any action taken as a director if the director performed the duties of the director's office in compliance with the general standards of conduct pursuant to section 414-221. (e) The officer of an association shall not be personally liable for monetary damages for any action taken as an officer if the officer performed the duties of the position in compliance with the general standards of conduct pursuant to section 414-233. (f) Upon proper notice, an association that is noncompliant with this chapter shall have its status as a limited-profit housing association revoked. (g) An association may elect to terminate its status as a limited-profit housing association and cease to be subject to this chapter upon approval from the council. If a plan of merger, consolidation, division, or share exchange would have the effect of terminating the status of a corporation as a limited-profit housing association, the plan shall not be effective unless it is approved by the council. § -4 Leasehold purchase prices; rental prices. (a) A limited-profit housing association shall only charge a fixed price for the use of its affordable housing units. The fixed price shall be at a level neither higher nor lower than necessary to cover the costs for constructing and operating the building, while considering the actual and reasonable costs of managing the affordable housing units, including the formation of reserves. The fixed price shall be based on the following factors: (1) Construction expenses, including the financing of the affordable housing units; (2) Operating expenses and management costs; and (3) Replacement reserves. (b) If a tenant or buyer of an affordable housing unit that is built by an association disagrees with the cost of the affordable housing unit, they may have the amount of the fixed price reviewed by a court of law. § -5 Asset management. (a) The revenues generated by a limited-profit housing association shall be reserved and placed in a revolving fund where the moneys shall be used only for limited business activities as provided under section -6. (b) The association shall only distribute its profits once a year. The profit distributed shall not exceed the permissible interest rate for shareholder equity as determined by the council. (c) The dividend paid to a member or shareholder that withdraws from the association shall be only the amount of the nominal value of the member's or shareholder's capital contribution. § -6 Limited business activities. (a) Limited-profit housing associations shall primarily construct, rehabilitate, and manage affordable housing. Additional primary activities of an association include the large-scale renovation and management of the affordable housing of other limited-profit housing associations. All activities performed under this subsection shall be performed under the name of the association. (b) An association may conduct other secondary business activities, including: (1) The construction of public housing, private homes, and homes built for third parties; (2) The construction of commercial premises, garages, and parking lots; (3) The construction of community facilities for the residents of its affordable housing projects and the residential public in general; (4) Improvements in the general housing environment of the State; (5) Special renovation activities, including urban renewal, sanitation, and renovation for third parties; (6) Legal transactions relating to the affordable housing units owned by the limited-profit housing association; (7) Bank transactions relating to the construction of affordable housing; (8) The purchase of building materials and furnishings; and (9) Participation in other limited-profit building associations, loan associations, and building societies; provided that the scope of these activities shall be connected and related to the primary business activities described in subsection (a). (c) With written approval from the council, an association may perform other housing-related services. (d) Any interruption in building activities by an association shall require the explicit permission of the council." SECTION 3. Chapter 235, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows: "§235- Exclusion of income earned by a limited-profit housing association. Notwithstanding any law to the contrary, all income earned from a limited-profit housing association established pursuant to chapter that would otherwise be taxed as ordinary income shall be excluded from taxation under this chapter for Hawaii income tax purposes; provided that any income that is not used for primary business activities under section -6(a) shall be subject to this chapter if the limited-profit housing association is unable to verify that the income has been properly utilized in five years for the primary business activities of the association." SECTION 4. Section 23-94, Hawaii Revised Statutes, is amended by amending subsection (c) to read as follows: "(c) This section shall apply to the following: (1) Section 235-4.5(a)--Exclusion of intangible income earned by a trust sited in this State; (2) Section 235-4.5(b)--Exclusion of intangible income of a foreign corporation owned by a trust sited in this State; (3) Section 235-4.5(c)--Credit to a resident beneficiary of a trust for income taxes paid by the trust to another state; (4) Sections 235-55 and 235-129--Credit for income taxes paid by a resident taxpayer to another jurisdiction; (5) Section 235-71(c)--Credit for a regulated investment company shareholder for the capital gains tax paid by the company; (6) Section 235-110.6--Credit for fuel taxes paid by a commercial fisher; (7) Section 235-110.93--Credit for important agricultural land qualified agricultural cost; [(8) Section 235-110.94--Credit for organically produced agricultural products; (9)] (8) Section 235-129(b)--Credit to a shareholder of an S corporation for the shareholder's pro rata share of the tax credit earned by the S corporation in this State; [and (10)] (9) Section 209E-10--Credit for a qualified business in an enterprise zone; provided that the review of this credit pursuant to this part shall be limited in scope to income tax credits[.]; and (10) Section 235- -- Exclusion of income earned by a limited-profit housing association." SECTION 5. Section 247-3, Hawaii Revised Statutes, is amended to read as follows: "§247-3 Exemptions. The tax imposed by section 247-1 shall not apply to: (1) Any document or instrument that is executed prior to January 1, 1967; (2) Any document or instrument that is given to secure a debt or obligation; (3) Any document or instrument that only confirms or corrects a deed, lease, sublease, assignment, transfer, or conveyance previously recorded or filed; (4) Any document or instrument between husband and wife, reciprocal beneficiaries, or parent and child, in which only a nominal consideration is paid; (5) Any document or instrument in which there is a consideration of $100 or less paid or to be paid; (6) Any document or instrument conveying real property that is executed pursuant to an agreement of sale, and where applicable, any assignment of the agreement of sale, or assignments thereof; provided that the taxes under this chapter have been fully paid upon the agreement of sale, and where applicable, upon [such] the assignment or assignments of agreements of sale; (7) Any deed, lease, sublease, assignment of lease, agreement of sale, assignment of agreement of sale, instrument or writing [in which] that the United States or any agency or instrumentality thereof or the State or any agency, instrumentality, or governmental or political subdivision thereof are the only parties thereto; (8) Any document or instrument executed pursuant to a tax sale conducted by the United States or any agency or instrumentality thereof or the State or any agency, instrumentality, or governmental or political subdivision thereof for delinquent taxes or assessments; (9) Any document or instrument conveying real property to the United States or any agency or instrumentality thereof or the State or any agency, instrumentality, or governmental or political subdivision thereof pursuant to the threat of the exercise or the exercise of the power of eminent domain; (10) Any document or instrument that solely conveys or grants an easement or easements; (11) Any document or instrument whereby owners partition their property, whether by mutual agreement or judicial action; provided that the value of each owner's interest in the property after partition is equal in value to that owner's interest before partition; (12) Any document or instrument between marital partners or reciprocal beneficiaries who are parties to a divorce action or termination of reciprocal beneficiary relationship that is executed pursuant to an order of the court in the divorce action or termination of reciprocal beneficiary relationship; (13) Any document or instrument conveying real property from a testamentary trust to a beneficiary under the trust; (14) Any document or instrument conveying real property from a grantor to the grantor's revocable living trust, or from a grantor's revocable living trust to the grantor as beneficiary of the trust; (15) Any document or instrument conveying real property, or any interest therein, from an entity that is a party to a merger or consolidation under chapter 414, 414D, 415A, 421, 421C, 425, 425E, or 428 to the surviving or new entity; (16) Any document or instrument conveying real property, or any interest therein, from a dissolving limited partnership to its corporate general partner that owns, directly or indirectly, at least a ninety per cent interest in the partnership, determined by applying section 318 (with respect to constructive ownership of stock) of the federal Internal Revenue Code of 1986, as amended, to the constructive ownership of interests in the partnership; [and [](17)[]] Any document or instrument that conforms to the transfer on death deed as authorized under chapter 527[.]; and (18) Any document or instrument conveying real property, or any interest therein, to or by a limited-profit housing association established pursuant to chapter ." PART III SECTION 6. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored. SECTION 7. This Act shall take effect upon its approval; provided that sections 3, 4, and 5 of this Act shall take effect on January 1, 2025, and shall apply to taxable years beginning after December 31, 2024. INTRODUCED BY: _____________________________ |
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| 49 | 49 | | PART I |
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| 50 | 50 | | |
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| 51 | 51 | | SECTION 1. Chapter 201, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows: |
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| 52 | 52 | | |
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| 53 | 53 | | "§201- Limited-profit housing council. (a) There is established the limited-profit housing council within the department of business, economic development, and tourism for administrative purposes, to oversee and administer the establishment and governance of limited-profit housing associations in the State. |
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| 54 | 54 | | |
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| 55 | 55 | | (b) The limited-profit housing council shall consist of the following members: |
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| 56 | 56 | | |
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| 57 | 57 | | (1) The executive director of the Hawaii housing finance and development corporation, who shall serve as the co-chair; |
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| 58 | 58 | | |
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| 59 | 59 | | (2) The executive director of the Hawaii public housing authority, who shall serve as the co-chair; |
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| 60 | 60 | | |
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| 61 | 61 | | (3) The director of the department of business, economic development, and tourism or the director's designee; |
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| 62 | 62 | | |
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| 63 | 63 | | (4) The attorney general or their designee; |
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| 64 | 64 | | |
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| 65 | 65 | | (5) The director of taxation or their designee; |
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| 66 | 66 | | |
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| 67 | 67 | | (6) The chairs of the standing committees of the senate and house of representatives with subject matter jurisdiction over housing or their designees; |
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| 68 | 68 | | |
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| 69 | 69 | | (7) A representative from the city and county of Honolulu's office of housing with experience in affordable housing development; |
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| 70 | 70 | | |
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| 71 | 71 | | (8) A representative from the county of Maui's housing division with experience in affordable housing development; |
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| 72 | 72 | | |
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| 73 | 73 | | (9) A representative from the county of Kauai's housing agency with experience in affordable housing development; and |
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| 74 | 74 | | |
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| 75 | 75 | | (10) A representative from the county of Hawaii's office of housing and community development with experience in affordable housing development. |
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| 76 | 76 | | |
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| 77 | 77 | | (c) Meetings shall be open to the public and subject to chapter 92. The co-chairs shall determine how often the council shall meet; provided that the council meets at least once a calendar year. |
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| 78 | 78 | | |
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| 79 | 79 | | (d) The department shall provide administrative support to the council and hire an administrator without regard to chapter 76, who shall be responsible for the day-to-day operations of the council. |
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| 80 | 80 | | |
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| 81 | 81 | | (e) The council may adopt rules under chapter 91 necessary to establish and govern limited-profit housing associations in the State." |
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| 82 | 82 | | |
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| 83 | 83 | | PART II |
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| 84 | 84 | | |
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| 85 | 85 | | SECTION 2. The Hawaii Revised Statutes is amended by adding a new chapter to be appropriately designated and to read as follows: |
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| 87 | 87 | | "Chapter |
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| 89 | 89 | | LIMITED-profit housing associations |
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| 91 | 91 | | § ‑1 Purpose. The purpose of this chapter is to create long-term affordable housing in the State through the establishment of limited-profit housing associations. Every limited-profit housing association shall have the primary purpose of providing long-term affordable housing in the State. This includes devoting and reinvesting its assets, including its shareholders' equity, to generate affordable housing and regularly auditing its business operations to ensure that it is aligned with this primary purpose. This chapter authorizes a designation and code of conduct for an association to offer entrepreneurs and investors a sustainable option to develop long-term affordable housing in the State. |
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| 92 | 92 | | |
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| 93 | 93 | | § ‑2 Definitions. As used in this chapter: |
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| 94 | 94 | | |
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| 95 | 95 | | "Contractor" means any general engineering, general building, or specialty contractor, any subcontractor, or any person, who by oneself or through others offers to undertake, or holds oneself out as being able to undertake, or does undertake to alter, add to, subtract from, improve, enhance, or beautify any realty or construct, alter, repair, add to, subtract from, improve, move, wreck, or demolish any building, highway, road, railroad, excavation, or other structure, project, development, or improvement, or do any part thereof, including the erection of scaffolding or other structures or works in connection therewith. |
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| 96 | 96 | | |
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| 97 | 97 | | "Financial relationship" means a relationship between a person and a contractor, where: |
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| 98 | 98 | | |
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| 99 | 99 | | (1) The person is, or has been within the last three years, an employee of a contractor, its parent company, or its subsidiaries; |
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| 100 | 100 | | |
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| 101 | 101 | | (2) The person is related by blood, marriage, or adoption to; is a party to a civil union with; is a reciprocal beneficiary or household member of; or resides with a contractor or an officer or director of a contractor, its parent company, or its subsidiaries; or |
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| 102 | 102 | | |
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| 103 | 103 | | (3) The person or an association of which the person is a director, officer, or manager or in which the person owns beneficially or of record five per cent or more of the outstanding equity interests or the outstanding shares of a contractor, its parent company, or its subsidiaries. |
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| 104 | 104 | | |
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| 105 | 105 | | "Limited-profit housing association" or "association" means a domestic corporation, incorporated under chapter 414, that is approved by the limited-profit housing council to act as a limited-profit housing association and whose status as a limited-profit housing association has not been terminated as provided in this chapter. |
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| 106 | 106 | | |
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| 107 | 107 | | "Limited-profit housing council" or "council" means the council established pursuant to section 201- . |
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| 108 | 108 | | |
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| 109 | 109 | | § -3 Establishment; standards of conduct; termination. (a) A domestic corporation, incorporated under chapter 414, may establish itself as a limited-profit housing association upon approval from the council. If a corporation that is not a limited-profit housing association is a party to a merger, consolidation, or division, or is the exchanging corporation in a share exchange, and the surviving, new, or any resulting corporation in the merger, consolidation, division, or share exchange is to be a limited-profit housing association, then the plan of merger, consolidation, division, or share exchange shall not be effective unless approved by the council. |
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| 110 | 110 | | |
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| 111 | 111 | | (b) Upon approval of its limited-profit housing association status, the corporation shall include in its articles, or amend its articles to include, a statement that the corporation's primary purpose is to provide long-term affordable housing in the State and that the corporation shall devote its assets, including its shareholders' equity, to generate affordable housing and regularly check and monitor its business operations to ensure that it is aligned with this primary purpose. |
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| 112 | 112 | | |
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| 113 | 113 | | (c) All directors and officers of an association shall be independent of and shall have no financial relationship with any contractors. |
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| 114 | 114 | | |
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| 115 | 115 | | (d) The director of an association shall not be personally liable for monetary damages for any action taken as a director if the director performed the duties of the director's office in compliance with the general standards of conduct pursuant to section 414-221. |
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| 116 | 116 | | |
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| 117 | 117 | | (e) The officer of an association shall not be personally liable for monetary damages for any action taken as an officer if the officer performed the duties of the position in compliance with the general standards of conduct pursuant to section 414-233. |
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| 118 | 118 | | |
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| 119 | 119 | | (f) Upon proper notice, an association that is noncompliant with this chapter shall have its status as a limited-profit housing association revoked. |
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| 120 | 120 | | |
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| 121 | 121 | | (g) An association may elect to terminate its status as a limited-profit housing association and cease to be subject to this chapter upon approval from the council. If a plan of merger, consolidation, division, or share exchange would have the effect of terminating the status of a corporation as a limited-profit housing association, the plan shall not be effective unless it is approved by the council. |
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| 122 | 122 | | |
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| 123 | 123 | | § -4 Leasehold purchase prices; rental prices. (a) A limited-profit housing association shall only charge a fixed price for the use of its affordable housing units. The fixed price shall be at a level neither higher nor lower than necessary to cover the costs for constructing and operating the building, while considering the actual and reasonable costs of managing the affordable housing units, including the formation of reserves. The fixed price shall be based on the following factors: |
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| 124 | 124 | | |
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| 125 | 125 | | (1) Construction expenses, including the financing of the affordable housing units; |
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| 126 | 126 | | |
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| 127 | 127 | | (2) Operating expenses and management costs; and |
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| 128 | 128 | | |
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| 129 | 129 | | (3) Replacement reserves. |
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| 130 | 130 | | |
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| 131 | 131 | | (b) If a tenant or buyer of an affordable housing unit that is built by an association disagrees with the cost of the affordable housing unit, they may have the amount of the fixed price reviewed by a court of law. |
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| 132 | 132 | | |
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| 133 | 133 | | § -5 Asset management. (a) The revenues generated by a limited-profit housing association shall be reserved and placed in a revolving fund where the moneys shall be used only for limited business activities as provided under section -6. |
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| 134 | 134 | | |
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| 135 | 135 | | (b) The association shall only distribute its profits once a year. The profit distributed shall not exceed the permissible interest rate for shareholder equity as determined by the council. |
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| 136 | 136 | | |
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| 137 | 137 | | (c) The dividend paid to a member or shareholder that withdraws from the association shall be only the amount of the nominal value of the member's or shareholder's capital contribution. |
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| 138 | 138 | | |
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| 139 | 139 | | § -6 Limited business activities. (a) Limited-profit housing associations shall primarily construct, rehabilitate, and manage affordable housing. Additional primary activities of an association include the large-scale renovation and management of the affordable housing of other limited-profit housing associations. All activities performed under this subsection shall be performed under the name of the association. |
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| 140 | 140 | | |
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| 141 | 141 | | (b) An association may conduct other secondary business activities, including: |
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| 142 | 142 | | |
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| 143 | 143 | | (1) The construction of public housing, private homes, and homes built for third parties; |
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| 144 | 144 | | |
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| 145 | 145 | | (2) The construction of commercial premises, garages, and parking lots; |
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| 146 | 146 | | |
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| 147 | 147 | | (3) The construction of community facilities for the residents of its affordable housing projects and the residential public in general; |
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| 148 | 148 | | |
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| 149 | 149 | | (4) Improvements in the general housing environment of the State; |
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| 150 | 150 | | |
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| 151 | 151 | | (5) Special renovation activities, including urban renewal, sanitation, and renovation for third parties; |
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| 152 | 152 | | |
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| 153 | 153 | | (6) Legal transactions relating to the affordable housing units owned by the limited-profit housing association; |
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| 154 | 154 | | |
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| 155 | 155 | | (7) Bank transactions relating to the construction of affordable housing; |
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| 156 | 156 | | |
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| 157 | 157 | | (8) The purchase of building materials and furnishings; and |
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| 158 | 158 | | |
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| 159 | 159 | | (9) Participation in other limited-profit building associations, loan associations, and building societies; |
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| 160 | 160 | | |
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| 161 | 161 | | provided that the scope of these activities shall be connected and related to the primary business activities described in subsection (a). |
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| 162 | 162 | | |
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| 163 | 163 | | (c) With written approval from the council, an association may perform other housing-related services. |
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| 164 | 164 | | |
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| 165 | 165 | | (d) Any interruption in building activities by an association shall require the explicit permission of the council." |
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| 166 | 166 | | |
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| 167 | 167 | | SECTION 3. Chapter 235, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows: |
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| 168 | 168 | | |
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| 169 | 169 | | "§235- Exclusion of income earned by a limited-profit housing association. Notwithstanding any law to the contrary, all income earned from a limited-profit housing association established pursuant to chapter that would otherwise be taxed as ordinary income shall be excluded from taxation under this chapter for Hawaii income tax purposes; provided that any income that is not used for primary business activities under section -6(a) shall be subject to this chapter if the limited-profit housing association is unable to verify that the income has been properly utilized in five years for the primary business activities of the association." |
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| 170 | 170 | | |
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| 171 | 171 | | SECTION 4. Section 23-94, Hawaii Revised Statutes, is amended by amending subsection (c) to read as follows: |
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| 172 | 172 | | |
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| 173 | 173 | | "(c) This section shall apply to the following: |
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| 174 | 174 | | |
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| 175 | 175 | | (1) Section 235-4.5(a)--Exclusion of intangible income earned by a trust sited in this State; |
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| 176 | 176 | | |
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| 177 | 177 | | (2) Section 235-4.5(b)--Exclusion of intangible income of a foreign corporation owned by a trust sited in this State; |
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| 178 | 178 | | |
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| 179 | 179 | | (3) Section 235-4.5(c)--Credit to a resident beneficiary of a trust for income taxes paid by the trust to another state; |
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| 180 | 180 | | |
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| 181 | 181 | | (4) Sections 235-55 and 235-129--Credit for income taxes paid by a resident taxpayer to another jurisdiction; |
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| 182 | 182 | | |
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| 183 | 183 | | (5) Section 235-71(c)--Credit for a regulated investment company shareholder for the capital gains tax paid by the company; |
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| 184 | 184 | | |
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| 185 | 185 | | (6) Section 235-110.6--Credit for fuel taxes paid by a commercial fisher; |
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| 186 | 186 | | |
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| 187 | 187 | | (7) Section 235-110.93--Credit for important agricultural land qualified agricultural cost; |
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| 188 | 188 | | |
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| 189 | 189 | | [(8) Section 235-110.94--Credit for organically produced agricultural products; |
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| 190 | 190 | | |
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| 191 | 191 | | (9)] (8) Section 235-129(b)--Credit to a shareholder of an S corporation for the shareholder's pro rata share of the tax credit earned by the S corporation in this State; [and |
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| 192 | 192 | | |
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| 193 | 193 | | (10)] (9) Section 209E-10--Credit for a qualified business in an enterprise zone; provided that the review of this credit pursuant to this part shall be limited in scope to income tax credits[.]; and |
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| 194 | 194 | | |
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| 195 | 195 | | (10) Section 235- -- Exclusion of income earned by a limited-profit housing association." |
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| 196 | 196 | | |
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| 197 | 197 | | SECTION 5. Section 247-3, Hawaii Revised Statutes, is amended to read as follows: |
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| 198 | 198 | | |
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| 199 | 199 | | "§247-3 Exemptions. The tax imposed by section 247-1 shall not apply to: |
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| 200 | 200 | | |
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| 201 | 201 | | (1) Any document or instrument that is executed prior to January 1, 1967; |
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| 202 | 202 | | |
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| 203 | 203 | | (2) Any document or instrument that is given to secure a debt or obligation; |
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| 204 | 204 | | |
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| 205 | 205 | | (3) Any document or instrument that only confirms or corrects a deed, lease, sublease, assignment, transfer, or conveyance previously recorded or filed; |
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| 206 | 206 | | |
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| 207 | 207 | | (4) Any document or instrument between husband and wife, reciprocal beneficiaries, or parent and child, in which only a nominal consideration is paid; |
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| 208 | 208 | | |
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| 209 | 209 | | (5) Any document or instrument in which there is a consideration of $100 or less paid or to be paid; |
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| 210 | 210 | | |
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| 211 | 211 | | (6) Any document or instrument conveying real property that is executed pursuant to an agreement of sale, and where applicable, any assignment of the agreement of sale, or assignments thereof; provided that the taxes under this chapter have been fully paid upon the agreement of sale, and where applicable, upon [such] the assignment or assignments of agreements of sale; |
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| 212 | 212 | | |
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| 213 | 213 | | (7) Any deed, lease, sublease, assignment of lease, agreement of sale, assignment of agreement of sale, instrument or writing [in which] that the United States or any agency or instrumentality thereof or the State or any agency, instrumentality, or governmental or political subdivision thereof are the only parties thereto; |
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| 214 | 214 | | |
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| 215 | 215 | | (8) Any document or instrument executed pursuant to a tax sale conducted by the United States or any agency or instrumentality thereof or the State or any agency, instrumentality, or governmental or political subdivision thereof for delinquent taxes or assessments; |
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| 216 | 216 | | |
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| 217 | 217 | | (9) Any document or instrument conveying real property to the United States or any agency or instrumentality thereof or the State or any agency, instrumentality, or governmental or political subdivision thereof pursuant to the threat of the exercise or the exercise of the power of eminent domain; |
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| 218 | 218 | | |
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| 219 | 219 | | (10) Any document or instrument that solely conveys or grants an easement or easements; |
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| 220 | 220 | | |
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| 221 | 221 | | (11) Any document or instrument whereby owners partition their property, whether by mutual agreement or judicial action; provided that the value of each owner's interest in the property after partition is equal in value to that owner's interest before partition; |
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| 222 | 222 | | |
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| 223 | 223 | | (12) Any document or instrument between marital partners or reciprocal beneficiaries who are parties to a divorce action or termination of reciprocal beneficiary relationship that is executed pursuant to an order of the court in the divorce action or termination of reciprocal beneficiary relationship; |
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| 224 | 224 | | |
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| 225 | 225 | | (13) Any document or instrument conveying real property from a testamentary trust to a beneficiary under the trust; |
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| 226 | 226 | | |
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| 227 | 227 | | (14) Any document or instrument conveying real property from a grantor to the grantor's revocable living trust, or from a grantor's revocable living trust to the grantor as beneficiary of the trust; |
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| 228 | 228 | | |
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| 229 | 229 | | (15) Any document or instrument conveying real property, or any interest therein, from an entity that is a party to a merger or consolidation under chapter 414, 414D, 415A, 421, 421C, 425, 425E, or 428 to the surviving or new entity; |
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| 230 | 230 | | |
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| 231 | 231 | | (16) Any document or instrument conveying real property, or any interest therein, from a dissolving limited partnership to its corporate general partner that owns, directly or indirectly, at least a ninety per cent interest in the partnership, determined by applying section 318 (with respect to constructive ownership of stock) of the federal Internal Revenue Code of 1986, as amended, to the constructive ownership of interests in the partnership; [and |
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| 232 | 232 | | |
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| 233 | 233 | | [](17)[]] Any document or instrument that conforms to the transfer on death deed as authorized under chapter 527[.]; and |
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| 234 | 234 | | |
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| 235 | 235 | | (18) Any document or instrument conveying real property, or any interest therein, to or by a limited-profit housing association established pursuant to chapter ." |
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| 236 | 236 | | |
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| 237 | 237 | | PART III |
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| 238 | 238 | | |
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| 239 | 239 | | SECTION 6. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored. |
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| 240 | 240 | | |
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| 241 | 241 | | SECTION 7. This Act shall take effect upon its approval; provided that sections 3, 4, and 5 of this Act shall take effect on January 1, 2025, and shall apply to taxable years beginning after December 31, 2024. |
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| 242 | 242 | | |
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| 243 | 243 | | |
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| 244 | 244 | | |
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| 245 | 245 | | INTRODUCED BY: _____________________________ |
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| 246 | 246 | | |
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| 247 | 247 | | INTRODUCED BY: |
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| 248 | 248 | | |
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| 249 | 249 | | _____________________________ |
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| 250 | 250 | | |
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| 251 | 251 | | |
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| 252 | 252 | | |
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| 253 | 253 | | |
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| 254 | 254 | | |
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| 255 | 255 | | Report Title: Affordable Housing; Limited-Profit Housing Associations; Limited-Profit Housing Council Description: Establishes an organizational, tax, and regulatory framework for limited-profit housing associations. Establishes the Limited-Profit Housing Council to oversee limited-profit housing associations. The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent. |
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| 256 | 256 | | |
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| 257 | 257 | | |
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| 258 | 258 | | |
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| 259 | 259 | | |
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| 260 | 260 | | |
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| 261 | 261 | | |
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| 262 | 262 | | |
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| 263 | 263 | | Report Title: |
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| 264 | 264 | | |
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| 265 | 265 | | Affordable Housing; Limited-Profit Housing Associations; Limited-Profit Housing Council |
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| 266 | 266 | | |
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| 267 | 267 | | |
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| 268 | 268 | | |
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| 269 | 269 | | Description: |
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| 270 | 270 | | |
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| 271 | 271 | | Establishes an organizational, tax, and regulatory framework for limited-profit housing associations. Establishes the Limited-Profit Housing Council to oversee limited-profit housing associations. |
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| 272 | 272 | | |
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| 273 | 273 | | |
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| 274 | 274 | | |
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| 275 | 275 | | |
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| 276 | 276 | | |
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| 277 | 277 | | |
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| 278 | 278 | | |
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| 279 | 279 | | The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent. |
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