Senate Standing Committee on Housing

Good afternoon. It's 1:00pm and welcome to the Committee on Housing. Today we have four different agendas. We have a joint agenda with the Committee on Energy and Intergovernmental Affairs at 1 o'Clock. We also have a 1:01pm agenda of just the Committee on Housing and we also have two deferred agendas at one o'. Clock.

So we'll be taking the joint agenda with Energy and Intergovernmental affairs first, followed by the 1:01pm hearing and followed finally by the two deferred agendas. So this meeting is being streamed live on YouTube.

In the unlikely event that we have to end this hearing due to technical difficulties, the Committee will reconvene to discuss any outstanding business on Tuesday, February 10th at 1pm in this room. 225 and a public notice will be posted on the Legislature's website. We have a 1 Min per time limit testIf 1 Min per testifier time limit.

If there are temporary technical glitches during your turn to testify via Zoom, we may have to move on to the next person due to time constraints. We appreciate your understanding and remind you that the Committee has your written testimony.

All right, so we'll start today with Senate Bill 2232 relating to a tiny Home Grant pilot program, which establishes a three year Tiny home grant pilot program within hhftc, requires counties and nonprofit organizations that are awarded a grant to submit an annual report to HHFDC and requires a report to the Legislature.

Our first testifier is HHFTC in support, Followed by State Office on Homelessness and Housing Solutions with comments followed by Keoni Shizuma in support, Johnny Mae Perry in opposition, Cindy Freidas in opposition and Sherry Pollock in support. Is there anyone else wishing to testify on Senate Bill 2232? Okay, if not Members, any questions? EIG Any questions?

Okay, Our next bill today is Senate Bill 2192 relating to housing, which authorizes a county to reduce the number of housing units that may be built within any geographical area of the county only if the county increases the number of housing units that may be built elsewhere in the county such that there's no net loss in residential capacity in the county.

Our first testifier is City and County Department of Planning and Permitting with comments followed by Grassroots Institute of Hawaii and support Cindy Freitas in opposition. Is there anyone else wishing to testify on Senate Bill 2192? If not, any questions or comments? Numbers?

Okay, next is Senate Bill 2378 relating to housing which clarifies insurance Requirements for single family and multifamily housing projects to obtain expedited permitting from county agencies. First testifier is ACECH in support?

Good afternoon, Committee Chair, Chair Chang and Hashimoto. My name is Ikaika Kincaid. I'm with the ACECH and we support this bill. Strongly support this bill. It's important that engineers can perform their duties in response to this bill. And part of that is making sure that we as engineers and firms can be insured.

So, you know, clarifying the language of this bill allows for engineering firms to help this program succeed.

Thank you.

Yeah.

Next we have Grassroot Institute of Hawaii in support, Akinaka and Associates in support, Lim Tiaka Consulting Group in support, Cindy Fredis in opposition, and a number of individuals in support. Is there anyone else wishing to testify on this measure? Is Jay MK Stone in support? On Zoom.

Is available on Zoom, Chair.

Yes, I'm here. Are you able to hear me?

Yes.

Aloha, Chair and Members of the Committee. SB2378 makes a targeted but critical clarification to Act 295's expedited permitting program. The intent. While the intent of Act 295 is to accelerate housing production, it's insurance indemnification provisions create a significant uncertainty and unintended risk exposure for licensed architects and engineers.

This bill clarifies that professional liability remains appropriately tied to negligence while allowing counties to rely on professional certifications without transferring public permitting liability wholesale onto private professionals in ways that conflict with errors and emissions insurance coverage.

Without this clarification, any qualified AE firms are reluctant or unable to to participate, which undermines the very housing production goals the expedited process was designed to achieve. The SB2378 as currently written, improves participation, reduces friction and advances housing delivery while maintaining accountability. I strongly support this measure. Mahalo.

Thank you. Is there anyone else wishing to testify on Senate Bill 2378? If not Members, Any questions? Okay.

And our next bill is Senate Bill 2524, making appropriations to the city and county of Honolulu which appropriates monies to the Department of Housing and Land Management and Department of Design and Construction of the City and County of Honolulu as grants and aid to comply with the requirements of Act 206 Session Laws 2017 and Act 210 Session Laws 2018.

We have the Department of Housing and Land Management in support.

Good morning. Here to stand. We'll stand on our written testimony, but here to answer any questions.

Thank you. Anyone else wishing to testify at Senate Bill 2524? Any questions or comments? Members, if not all. Yeah, Former council Member Elefante, you as well, Chair.

Thank you. Thank you for being here. So a question I have is on the expended money that you had on 355,000, was that from general funds in the city and county's budget?

For the record, I should probably say who I am. Gavin Thornton, Housing Policy Director within the Department of Housing and Land Management at the City and County of Honolulu. I apologize, I do not know the answer to that question. But I'm happy to find out and get back to you. Yeah, that'd be great. Thank you. Thank you.

Thank you. Any other questions or discussion? Okay, if not, we'll hand it to Chair.

Okay. Members, we're on Senate Bill 2398 relating to residential housing utilities. First, our testifiers list is Ernie Lau.

Oh, I see. That's true.

Hello Chair and Members, Ernie Lau, Manager and Chief engineer for Honolulu Border Water Supply. We have some really serious concerns about this measure that requires us to put GIS maps up showing water availability for residential development. There are six points. Number one, protection of critical infrastructure information.

So really have concerns if we have to be required to depict the water system configuration on a map that's publicly available. There are bad actors that are after information about the drinking water systems across the nation. Number two, generalized maps could mislead the public.

Determinations are done right now are really highly site specific depending on like elevation, fire flow, availability, distance to a fire hydrant, the nature of the development being proposed. They really a static map could create may not be able to capture all these variables and may create false expectations. Third item, conversion of planning information to appealable agency decisions.

So this requires this Bill requires an agency decision subject to contested case procedures under Chapter 91. So we can anticipate there's potential for a lot of contested case hearing requests. Four, administrative burden and fiscal impact.

This is going to divert resources away from to support this updated GIS system map and the requirement to defend potential Chapter 91 appeals. It's going to divert staff capacity toward responding to inquiries to now responding to maybe challenges to the maps. Five, liability risks from statutory reliance.

Subsection D of the Bill allows permanent applicants to rely on the maps. Reliance on generalized maps could expose the border water supply to claims when actual conditions may differ from published depictions. And changes in the water system can occur sometimes without a lot of notice. For example, the contamination event at Red Hill.

We shut down three wells that affected the water system in two major water systems, our Honolulu water system and our Aiehenau system that occurred Over a few weeks in November and December of 20216. The existing process provides more accurate information.

We already offer free parcel specific water availability assessments that can be used for planning, engineering and financ. And basically a customer can even simply write a note on a piece of paper, handwritten note, indicate their address, what they're trying to do, like build a second home.

And we will respond to that formally with them with more detailed analysis. And that's already there. And it can be more, it's more efficient than a generalized GIS map that's available. So those are our concerns. Thank you.

Thank you, Mr. Lowe. Members, we have Keith Okamoto from the Big island has submitted testimony, opposition. Lindsay Garcia from the Realtors.

Thank you.

Thank you, Lindsay. Damian Waikoloa has submitted testimony in support. He represents an entity called YIMBY. And we have potentially John Stuffenbean on Zoom.

Aloha Priya Landgraft here on behalf of Director Stuffelbean who sends his regrets. We stand by our written opposition testimony.

Thank you very much. Is there anyone else wishing to testify on Senate Bill 2398? If not Members, any questions? Senator Hashimoto, maybe?

Director, can you come, come up, please?

So I guess if I'm reading the bill correctly, you know, my sense of what we're trying to get at is when you're a developer or someone who is trying to, you know, create housing, you're going to try and figure out, okay, do I have utilities before I decide to embark on some type of, you know, you know, purchase potentially of a property or make an investment in some type of property.

So. So I think it would be useful, I think from just a high level to really understand where is capacity available. It may not be a Oahu thing, but I see the other border water supplies and departments are jumping on. But on Maui, you don't know where an area is that might have water available.

So at a high level, is there not. Can you not at least help these people out to be like, okay, we have water availability in this region. We don't know how much. You might have to go write your name on that paper and give it to you and to find out. Exactly.

But, you know, I think we want to at least the purpose to me is to try and allow people to make these target investments to allow them to then hopefully build more housing? Right.

I would say, you know, thank you. I think transparency is important. And you're pointing, I think the issue of transparency of what's available or not available in the various water systems Elisa Namahu.

This process that we currently have, which is early on in the project as part of the due diligence of anybody wanting to build, they'll check with the utilities to see if capacity is available and we've been able to respond effectively to them.

So even if you don't currently own the property, you're able to ask about.

Yeah, we welcome that. Even if they're thinking about a location for say, a high rise project, for example, I just saw a request and this is related to. On Oahu, there's a lot of development occurring right now, Transit Oriented Development. In one area of the transit rail project, a request came in.

It was an inquiry, part of their due diligence for construction of 5,750 residential units in one location. A future water demand, ultimately of over a million gallons of water for just their project. I don't think.

I don't know if they own all the parcels, but we're fine in providing our best available information about it, about the conditions of the water system.

And then at what point they'd have to reserve it at a point of when they put in the application with.

You, when they actually. For us. And we've had this process in place for a long, long time. And it's worked effectively on Oahu where they write in. We'll give them that initial read. It's a preliminary read. At this time water is available or not available. If it's not available, we just tell them outright it's not available.

And what are the reasons for that. And at the time they come in for a building permit, they'll get a final determination.

How would a person know that they can do that? Is that on your website?

You bring up a good point. And this Bill has caused us to kind of look at what do we present to our customers on our website as a service. And this free service I don't think is well advertised. It's well known among the industry on Oahu.

And I think the realtors and everybody know that just got checked with the Board of Water Supply. So we're looking at ways.

How do we make this more well known, the service and allow for maybe a customer to go online on our website, fill out a form on a water service inquiry, whether they own the property or not, if they're thinking about.

Yeah, and then we would provide best available information at this point in time, but also caution them that the conditions can change in the system.

I know you can't speak for your other, you know, departments on the neighbor islands, but do you Know of any other Department that does this on the neighbor islands?

I'm not sure. In Kauai, I think when I was there over 25 years ago as the manager for the Kauai Department of Water, we'd get these inquiries from developers or their consultants or the General public on what was available at a different location.

I think on Kauai, when they go through the subdivision process, then the Dow would provide clear comments on water availability.

Okay, yeah, thank you, Mr. Lau.

Thank you.

Maybe Maui County. You can ask them.

Maui County. John's representative, Stuffle Bean. Yeah, I think he had a representative, same question.

Priya, do you, do we know if. You offer this service?

I know that we offer the case by case evaluation prior to initiating that permit application. I don't know what features are available and I'll take that back to our Department for interview.

Can you send that to us in writing, please, of what, what, what you guys are able to. To do? Because I think everyone here is very, very curious. Absolutely.

We'll get that information to you.

Thank you.

Chair Members, any further questions? If not Mr. Lau, I have a few questions. Mr. Lau, I have great respect for you and I want to work with you to make this bill something that you can tolerate. And I want to try and address some of the six points that you make here with some level of specificity.

With regard to your first point about critical infrastructure information being out there, I totally recognize that we don't want any bad actors to have access to information that they shouldn't have access to. The Bill doesn't require parcel by parcel data. But could we address your concern by saying that it will recognize areas by broad geographic zones.

Would that be palatable to you from.

A critical infrastructure standpoint? That'd be more palatable than, say, showing the actual pipeline configuration, how things are connected to water tanks, to wells in the system.

And then you brought up an issue that you're worried about, contested case hearings due to the language in this bill. If I read the bill correctly, if we go to sections 1, actually Section 1 and 2 in subsections C and D, where they talk about owner disagreements. And then.

The relying on the maps, if we strike sections C and D In both sections 1 and 2, I think that will take care of your contested case concerns. Correct?

I think that'll make it much better for us because contested cases could also lead to lawsuits eventually. I think the idea that, Senator, with all due respect, Chair, the information that say, if it goes on these maps in zones, really, we want to make it clear that that's preliminary. That's a very high level. It's not in detail.

Because the other thing that really gives us really is important to understand is what is the nature of the development? What is the idea that they actually want to do on a piece of land in terms of a residential project or any other project?

Because that also determines how much fire flow would be needed, how many gallons, whether it's 1,000 gallons or 2,000 gallons from a fire hydrant in the area. So the maps, if they could be just kind of viewed as preliminary.

But we encourage them to go to the next step, which is the free service of getting more detail information. Like we also provide what is available from the nearest fire hydrant to the parcel that's being thawed out for development.

Okay, so you would like to just add that you're allowed to put a disclaimer.

Yeah, I have aviator. So I think that it's clearly preliminary. This is high level for planning purposes. But we encourage them and we're looking at, how do we say, create an online form for customers just to fill out more information for the bigger developers.

They already know they've done multiple projects, so they know they've got to go through a level of detail that identifies what their project needs are. Like in that case, the 5,750 unit residential project proposal. They provide enough specifics that we can do a better job of evaluating the impact on the water system.

Okay, thank you. Thank you, Mr. Lau.

Thank you.

Yeah, Chair

Senator Richards.

Highlighted something. Thanks. Mr. Lau, as I hear you talking and we're talking about infrastructure within Oahu, Honolulu proper, I get it, because we have a lattice work, but on the Big Island, I'm thinking we have very small areas. So you mentioned about the bad actors, and I completely agree with what you're saying there.

Is there a way to look at this? So when we make some regional. Is there water available? Yes or no. At a very high level. And I don't want you to answer for Keith, but do you think it's possible to make it very generalized? And I like the.

That the information is available if you ask for it, but I think that needs to be publicized better. But is this something that we could do at a real high level? And so we are not reflective of any details. Do you believe that that's possible?

Yeah, I think it's possible.

We just want to make sure it's preliminary and it's a very dynamic situation because say the map is done this month, but then tomorrow or next month a contamination event affects Wells that have to be shut off in the area and maybe not turned on until a water treatment system is put in place or new replacement wells develop or a project comes in that suddenly so, so large it just whatever capacity is there, it would take up all the remaining capacity in that system until we could build more capacity.

So I guess I'm trying to express that it could be a very dynamic, changing situation. So it's like a point in time we're going to give you this information, but it's really valid for a point in time and sometimes it takes many years before development actually comes from to the building permit stage or requesting actual water service.

And then during that time, passage of time, things can change in the system. We want to provide water on a, we provide water to all on a first come first basis.

But I also, so I think preliminary high level and not required to be like an agency decision that's subject to claims and the idea that a developer is going to rely on this information and then proceed to move forward, but know that they're not actually given the information, it's only a point in time and it's preliminary.

So it's a point in time, not a real time evaluation.

When they actually need the water, it could be a while before they actually need that water.

Okay, thank you. Thank you, Chair.

You're welcome. Any further questions? If not, we're going to take a brief recess prior to taking the vote.

Good afternoon. Welcome back to the joint committees on Housing and Energy and Intergovernmental Affairs. We're back for decision making on the five bills on today's agenda. The first is Senate Bill 2232 relating to a tiny home grant pilot program. Chairs having conferred, the recommendation will be to pass this bill with amendments.

We'll take the HHFTC amendment for a full time staff position designated as a housing development specialist too, at an annual salary of $170,000 per year, including benefits.

We'll also take the amendment from Kyone Shizuma to require that these tiny homes be for residential use only, not for transient accommodations, second homes or any other use other than as a primary residence. We'll blank the appropriation. The date is already defective.

And in the Committee report we'll note the request for the $10 million appropriation and $170,000 a year for one FTE housing development specialist too. Members, do we have any questions or discussion? If not for the Committee on Housing, Chair's recommendation is to pass SB 2232 with amendments. Chair votes Aye.

Members SB 2232. Chairs recommendations passed with amendment. [Roll Call] Chair recommendations adopted. Thank you.

For EIG, same recommendation. Any discussion? If not Senator Chang, I vote yes.

Chair votes yes.[Roll all] Recommendation is adopted. Thank you. Okay. Our second bill today is Senate Bill 2192 relating to housing. Chair's recommendation will be to pass with amendments.

The amendments will be to clean the date and Add to Section 1 examples of down zoning here in Hawaii, such as in Waikiki, that have reduced residential capacity in urban areas without compensating for it elsewhere, greatly limiting the housing growth needed to accommodate the growing population. And there are also technical, non substantive amendments.

For the purposes of clarity and consistency. Members, any questions or discussion? Okay. If not, Chair's recommendation for Senate Bill 2192 is to pass with amendments.

Chair votes I. Members, SB 2192. Chairs recommendations passed with amendments. Chair votes aye. Any Members voting with reservations? Any Members voting no. With all others voting Aye. With the excuse of Senator Fevella, for this measure and all others, its recommendations adopted. Thank you.

For Members of eig, same recommendation. Any discussion? If not Senator Chang, I vote yes.

Noting the excuses of Senators decoit and Favela, of the Members present, are there any objections or reservations seeing? None. The recommendation is adopted.

Thank you.

Our third bill today is Senate Bill 2378 relating to housing. Chair's recommendation will be again to pass with amendments. On page two, line 16, the word insurers will be changed to insureds with a D, and that's it. Any questions or discussion? Okay. If not, Senate Bill 2378 for the housing Committee. Chair's recommendation is to pass with amendments.

Chair votes Aye.

Members SB 2378 shares recommendations passed with amendment. Chair votes Aye. Any Members voting with reservations? Any Members voting no? With all others voting Aye recommendation is adopted.

For Members of EIG, same recommendation to pass this measure with that phenomenal amendment for the D. Any discussion? If not Senator Chang, I vote yes.

Chair's recommendation for Senate Bill 2378 is to pass with amendments noting the excusals of Senators Decoit and Fevella. Of the Members present, are there any objections or reservations seeing? None. The recommendation is adopted. For Senate Bill 2524 making appropriations to the city and county of Honolulu. Check. Chair's recommendation will be to pass this measure with amendments.

The amendment will be to defect the date it already has. Blank appropriations and A blank number of full time positions. So in the Committee report we'll note that there's a request for $280,000 for two FTEs and also appropriation for $3.25 million. Any discussion numbers? If not for Senate Bill 2524 Chair's recommendation is to pass with amendments.

Chair votes Aye.

Members SB2524 charge. Recommendations passed with amendment. Chair votes aye. Any Members voting with reservations? Any Members voting no without others voting Aye.

Recommendations adopted for EIG Same recommendation. Any discussion? If not Senator Chang? I vote yes.

Chair's recommendation for Senate Bill 2524 is to pass with amendments of the Members present. Are there any objections or reservations? Hearing none. The recommendation is adopted.

The last measure on this agenda is Senate Bill 2398 relating to residential housing utilities. I think we all recognize that we want to reduce as much friction as possible that stands in the way of getting us more housing throughout the island.

I think this measure addresses one part of that friction but recognize that this Bill has some work to be done. I'd like to offer to the Members four amendments to the measurement to address Mr. Lau and other water enthusiasts concerns about critical infrastructure. Want to make sure that we set it in broad General geographic zones.

We're not going to have specificity for parcel data but broad General geographic areas.

With regard to addressing concerns about contested cases, we're going to take out in sections 1 and 2 in the bill subsections C and D in both of those two sections as well as allow for disclaimer language on the website that should take care of the contested case issues and then lastly defect the date to July 12050.

Those are the recommended amendments. Any discussion.

Chair appreciate those because I'm sensitive to what you were talking about and what Mr. Lau has said. So I'm going to vote with reservations to move it forward. I'm a little hesitant, but I think you've captured what we need to in the concerns to the discussion. So thank you.

For purposes of this vote, WR is water reservations. So anyway the recommendation and amendments are offered. Any other discussion? Discussion, yes. Senator Hash.

Thank you Chair for that those amendments. I think you know this is a really important bill just for. For so people know exactly you know where you can look at a quick map to see where. Where they should be focusing on. So I think this is very important in the housing continuum.

So thanks for working on those amendments.

My pleasure. Any further discussion? If not Senator Chang? I vote yes.

Chair's recommendation for Senate Bill 2398 is to pass with amendments? Chair votes yes. Noting the reservations of Senator Richards. Of the Members present. Are there any other objections or reservations? Seeing none, the recommendation is adopted.

Thank you.

And for the Committee on Housing? Same recommendation for Senate Bill 2398 to pass with amendments. Chair votes Aye.

Members, SB2398 shares. Recommendations passed with amendment. Chair votes Aye. Any Members voting with residents reservations? Any Members voting no. With all others voting Aye. Recommendations adopted.

Thank you very much. That brings us to the end of this agenda. There being no further business, the joint committees are adjourned.

Good afternoon and welcome back. This is the Committee on Housing. We are on our 1:01pm agenda and we have a number of bills to be heard today. Our first Bill is Senate Bill 2554 relating to 2544 relating to housing.

It establishes a five year Hawaii builds pilot program within HHFDC authorizes the corporation to deploy monies from the dwelling unit revolving Fund for pre development activities or as active construction equity.

Requires 50% of units made available on pilot program projects for households having incomes between 60 and 140% of the AMI mandates interagency coordination and expedited review for projects to facilitate timely delivery of projects and requires annual reports of the Legislature. Sunset 6/30/2031 Our first testifier today and as a reminder, you'll have one minute.

Our first testifier today is the State Procurement Office with comments followed by HHFDC and support.

Summer testimony and support Hawaii.

State Council on Developmental Disabilities and Support.

Thank you Chair Committee Members. My name is Dane Chupartolis, Executive Director for the Hawaii State Council on Developmental Disabilities. We are in strong support of this measure. This helps our caregivers who provide support to individuals with disabilities. They're in that medium range. I'd like to highlight a part of. Our testimony explaining that expanding housing options.

At the middle of the market helps. Relieve downward pressure, reduce competition for naturally affordable units and improve housing stability for people with IDD. Thank you very much for this opportunity.

Thank you. We have the Hawaii Realtors in support. Thank you. Center Urban Real Estate with comments and two individuals. Kaili Swan in support, Cindy Freitas in opposition. Is there anyone else wishing to testify on Senate Bill 2544? If not, Members, do we have any questions or comments or discussion? Okay.

If not, we'll move next to Senate Bill 2338 relating to housing. It increases the salary cap of the Executive Director of HHFDC to an amount that does not exceed the governor's salary, renames the Executive assistant to the deputy Executive Director and increases that position salary cap to 95% of the Executive director's salary.

It prohibits HHFTC and HPHA employment contracts that exceed two years unless approved by the Legislature and provides HHFTC with autonomy and personnel matters. Our first testifier is HHFTC in Support.

Standard support. Just want to clarify also though that you know, I myself do not see a personal benefit to this bill immediately because of course our operating ceiling must also be increased. But what would be a benefit is granting us more autonomy over personnel matters, right?

Now, there are initiatives that we have that are, I guess you would say, stymied due to, you know, certain rules which, you know, make it hard for us to retain employees and to plan for succession.

Thank you. Next we have Hawaii Public Housing Authority with comments. Thank you. Department of Human Resources Development with comments.

Good afternoon, Chair, Vice Chair, Members of the Committee. My name is Brenna Hashimoto. I'm the Director of the Department of Human Resources Development. I'd just like to point out the fact that we submitted revised testimony correcting some of the citations. You should have received it earlier today. But essential, our arguments remain the same.

Our concerns, I should say, first of all, our concerns are twofold. With regard to HHFTC having personnel autonomy, we find that to be problematic. We have a number of personnel statutes, rules, policies that dictate how personnel matters are to be handled in the state.

And to give one agency autonomy, which is not defined in this bill, is problematic. We want to ensure that all of our employees have the same access to the same benefits and same terms and conditions of employment. So I would like to point out that it's unclear. We also take issue with having contracts of any type.

We do not permit contracts. Exempt employees, which are primarily what they employ, are all considered at will. So there should be no employment contracts. I'm available to answer any other questions you might have. I know my time is up. Thank you.

Thank you. And thank you for your revised testimony, as the initial testimony had a lot of errors in it. Stanford Car Development and Support, Robert J. Hall with comments. Cindy Freitas and Johnny Mae Perry in opposition. Is there anyone else wishing to testify on Senate Bill 2338? Okay. Any questions or discussion, Members? Chair, I have a question.

Senator Elephant for Director, please. Thank you, Director Hashimoto, for your questions, your comments and your testimony. I'm just curious to know, how would this be different? Earlier today, there was a bill being. Heard between Judiciary and Labor regarding the. Salary increase for the Executive Director for.

The campaign spending Commission and matching that and tying that to another agency. So how is that different or similar in this respect?

I'm not familiar with that bill, but it sounds like it's very similar. So we have a number of positions, by statute, that are indexed to positions that are covered by the Commission on salaries. I actually have the list with me, but there's a handful in most departments.

Primarily that wasn't included on the list of commissioner salaries.

No. So the Commission on Salaries just addresses the Governor, the Lieutenant Governor, the Cabinet, and then by individual statutes, they reference Those positions, and it's usually there's a full range of either equal to not more than, not less than that kind of language in individual statutes.

Okay. Okay, thank you. Thank you.

So I guess you brought up the issue of autonomy. So just for some context. Right. So how would you fix that, then? In making sure that, you know, they follow the, I guess, what you want, where everybody else has to follow. But essentially the intent of the legislation, what we're looking for, is that if.

They have a position, Right. They should have the ability to move around the money if it's vacant. And right now they cannot. Right. So if you have a vacancy you want. You have two vacancies, you want to move all the money into that one. One vacancy from the other vacancy, they're told they cannot.

I'm not a budget person. But what they have now the ability to do is to employ and set the salary, which I'm not con. I'm. I have no issues with that. I think that's what they. What the statute provides now. So it's very unclear as to what the intent is.

I know I told you what the intent is.

Well, but that's not what is said here. It just says autonomy. So what does that mean? And. And what it says is including establishing and filling positions and setting salaries, which is already provided for in their current statute. That's not new language. Right. So.

So why are you concerned about that part then?

I'm not concerned about that part. I'm concerned about the. The phrase that precedes that, which is autonomy and personnel matters. I don't know what that means in terms of what you're working on, what kind of autonomy.

You want to put a definition of autonomy, perhaps, but like I said, most personnel matters are not within the jurisdiction of individual agencies. They're obligated to follow our policies, our statutes, collective bargaining, or the governor's Executive orders. So to give one agency broad personnel autonomy, I think is problematic.

So would you. Would you be opposed to putting a budgetary autonomy?

That's. That's not for me to say, because I'm not the budget person.

But then would you be still, you know, concerned?

No, because I'm generally not concerned about budget matters. I'm concerned about human resources and personnel matters. So. But I think perhaps others may be.

Okay, well, you're the only one here. So that's why I'm asking. Okay, let's. Let's pivot a little bit. So. So tell me more about this employment contract. So you're saying no boards, autonomous boards. Can give out contracts.

Yes. And the reason for that is Chapter 89. So essentially. Sorry, let me back up just a bit. We have civil service positions and we have exempt positions.

Right.

Civil service. Clear. What the terms and conditions are. We. It's set out in Chapter 76. What terms and conditions for civil service exempt employees, which is the bulk of the employees at HHFDC are considered at will. They're exempt from Chapter 89. So at will you can be discharged at any time at the pleasure of the appointing authority.

So what? And also your terms and conditions of employment. Once they're hired, it then shifts to the governor's Executive powers to determine under Chapter 89C what the benefits for excluded folks are. And so an individual agency cannot determine benefits. So what would be the point of a contract?

It would have to be to give them a longer period period of employment that's not permitted or to give them a benefit.

Let me ask then, why does the Hawaii Public Housing Authority Executive Director have a four year contract then?

I don't know that. If he does, then that would be contrary to our policies.

And so how could that have happened? Because it's a contract that has continued for multiple terms. Right. He started probably back in 2011. My understanding is public knowledge now. They vote on this in a public open meeting. So I'm not divulging personnel matters that are not public.

I don't know who is advising them that they have the authority to do that. But I would suspect that the terms and conditions that are spelled out in there are contrary to the nature of his employment, which is at will.

Okay, so how would you advise us to correct that?

I think that's something that we would need to consult with the AG on.

Okay, thank you, Chair.

Thank you. Further questions or discussion? Welcome, Senator Fevella. Okay, let's move on to our next bill. Oh, actually Chair has some questions for HHFTC .

So if we were to amend this bill to provide a list of minimum qualifications for the Finance branch chief so that the Finance Branch chief would be able to take a leadership role in developing new initiatives and greatly expanding your housing development pipeline, do you think that would be the best way to accomplish that or do you think it would be better to create an entirely new position?

It would be better to create a new position because the Finance branch chief is already that person's time is taken up with the day to day Administration of his branch or her branch.

So if the intent is to allow a person to focus solely on developing new initiatives, then it would be better to have a separate position for that.

Do you think it would be reasonable to expect that person to have experience relevant to public finance and housing finance, including the Administration of revolving loan funds and complex capital structuring, bond issuance, debt management and credit underwriting, asset and portfolio management, including risk assessment and mitigation strategies for long term loan portfolios and strategic financial planning and regulatory compliance with federal and state housing programs.

To have had actual experience in all of those areas would be very difficult to find someone I think you could find someone with knowledge of those areas, but to have actual working experience would be very difficult to find.

Or if it's experience relevant to rather than in Would that be flexible enough.

To that would be more flexible.

And what kind of so I believe the legislative intent here is to enable the agency to attract high level personnel that can expand the development pipeline of the agency. What kind of metrics should the Bill include to measure the performance of these personnel?

I don't know if the metric should be in the actual statute, but metrics that should be included are number of units produced, types of housing, programs that are implemented, AMI of household served.

Number of units delivered by program type, state funding per unit, rate that funds revolve, and range of household income.

Those are all good metrics. Yes.

Thank you. Thank you very much. Further questions or discussion, Members? All right, if not, we'll move on to our next bill, which is Senate Bill 2553 relating to the housing loan and mortgage program. It increases the Hula Mae multifamily revenue bond authorization ceiling amount to continue financing affordable rental housing statewide.

Our first testifier is the Department of the Attorney General with comments.

Good afternoon, Chair Chang, Vice Chair Hashimoto, Members of the Committee. Linda Child, Deputy Attorney General. We've offered comments regarding clarifying language in the bill to the sentence that is being added to that provision to just remove any potential ambiguity in that language.

Thank you. HHFTC in support Office of Planning and Sustainable Development and support, Hawaii Realtors and support.

Thank you. Chair. We sent on our testimonials.

Thank you. Stanford Car Development and Support, AARP Hawaiian Support Cindy Freidas in opposition and Glenn Kagamita in support. Is there anyone else wishing to testify on Senate Bill 2553? If not, any questions or discussion numbers? Chair has some questions for HHFTC. So when does the bond authorization limit of $3 billion get maxed out?

We anticipate that will happen in 2027 or 2028.

And once that happens, you will no longer be able to, I guess Issue these bonds. And these bonds are critical for all 4% LIHTC financed housing?

Yes. Per federal law, all 4% LIHTC projects must have befunded or they're defunded by 25% by bonds.

So if we don't raise the ceiling by the time it expires, then we would bring all LIHTC construction to a halt. All new LIHTC construction? Yes. If this is such an important.

Well, except for 9% LIHTC, okay.

Why isn't it part of the governor's package?

This is something that we're planning to introduce next year. But our bond counsel late last year advised us that it'd be better to introduce a bill this year to give comfort to investors, bond investors. So it was introduced late in the game.

What if we don't pass this bill?

Then we would attempt to have it passed next year.

How did you pick $5 billion? What's the significance of that number?

That's sufficient to last for between five to eight years.

Does the state have the authority to raise that ceiling to any number? Could it be $10 billion? Could it be $3.001 billion?

The ceiling can be whatever the Legislature.

Sets it at because this ceiling, again, doesn't affect the state's ability to borrow or its credit limit or anything like that.

I would defer to bnf, but I don't think it does.

Okay. Well, as you know, the Chair has had some really serious concerns about the inefficiency of LIHTC as a financing vehicle for new housing, for the saturation of that 60% AMI rental market. I don't feel like giving it just a blank check to developing another additional, you know, 10,000 units would be appropriate at this time of LIHTC.

What comfort can you give the Chair? What amendments would you propose to assure the Committee that you wouldn't just be focusing, putting all your eggs in the LIHTC basket and that other missing middle housing and more revenue efficient, revenue neutral programs would be producing a much greater share of the housing that your agency finances.

I would say that the types of programs that we finance are largely due to the funding that we receive from the Legislature. So if we don't receive, say, RHR funding for LIHTC , then we wouldn't be, hat would limit the amount of awards that we can make for LIHTC projects.

If more funding were to be made for mixed income projects, we'll focus our efforts there.

Well, you're the one asking for the funding.

Well, we're not asking for funding this year.

The Chair is, you know, uninclined to move this bill forward unless there's some assurance to the Committee that the corporation is proceeding rapidly on these other non LIHTC housing financing mechanisms. Can, can you come back to this Committee with those assurances or with a plan to do so?

Sure. We can talk about this more.

Thank you. Members. Do we have any other questions or discussion?

If not, we'll move on to our next bill today which is Senate Bill 2675 relating to the Low Income Housing Tax Credit which clarifies that a partner or Member that is a partnership or limited liability company that has been allocated a low income housing tax credit may either further allocate the credit or transfer, sell or assign all or a portion of the credit to any taxpayer extends the Sunset date of Act 129, SLH 2016 relating to the low income Housing Tax tax credit until 123132.

Our first testifier is HHFTC in support. Thank you Department of Taxation with comments. Thank you Tax foundation of Hawaii with comments.

Thank you Chair. Members of the Committee Tom Yamachika from. Tax Foundation of Hawaii will stand a written testimony be available for questions.

Thank you, American Council of Life Insurers in support. NIOP Hawaii Chapter in support.

Chair we stand.

Thank you. Sugar Creek Capital in support.

Thank you Chairman Chang, Vice Chair Hashimoto and Members of the Committee. My name is Kim Brown. I represent Sugar Creek Capital, an affordable housing investor. I'm testifying testifying in support of Senate Bill 2675.

Affordable housing continues to be a critical need in Hawaii and the Hawaii Housing Tax Credit is a long standing proven tool to boost affordable housing supply. Continuing to foster a robust, diverse market of investors in this program is good policy for Hawaii.

This bill strengthens the demand for these Hawaii housing credits in the investor market which in turn will boost investment directly into these developments and help lead to more homes being built. Sugar Creek has a national footprint. We have seen these technical improvements play out both in Hawaii and other state markets.

With over 30 state housing credit programs across the country, we're regularly learning new ways to get the most out of this already successful program. Thank you for allowing me to testify and support a Senate Bill 2675. I'm happy to answer any questions.

Thank you. Stanford Car Development and Support, AARP Hawaii and support and Hunt Creek, Hunt Capital Partners LLC and support. Is there anyone else wishing to testify in Senate Bill 2675? Members, any questions or discussion? Chair has some questions for HHFDC. First of all, who allocates these tax credits and what are the limitations on those allocations?

Tax credits are received by the developers and they are sold by syndicators to generate equity for the project.

Right, but who gives them the light?

The state does.

Does HHFTC do it?

I believe Department of Taxation.

It's not us, but who authorizes them? Does the Legislature go in and put in the budget that $34 million of tax credits?

No, there is no dollar limit on the allocation.

And you, through your QAP process, through your project awards, you are the one who determines who gets these tax credits.

It's the state law that determines, you know, that the tax credits are allocated to projects.

How many tax credits a year are going out? How much? What is the value?

I'm not sure. Offend.

Okay, so if, if it's on the order of. Was it 34 or $43 million a year? It was 43. That money is just leaving the door with no budget, with no legislative approval on a year to year basis whatsoever, isn't it?

The Legislature establishes the tax credit.

How much do these tax credits sell for?

Now, it varies, but I believe it's about 60 cents on the dollar.

And if this bill were passed, how much would they sell for then?

It's hard to say, but it would improve the marketability, so it should increase the pricing.

Does this bill, as written, apply to only tax credits that will be issued in the future or to all outstanding tax credits?

I'm not certain about that. It appears to apply to all tax credits.

Okay, so if it applies to all tax credits, including those that were housing tax credits. Right.

State LIHTC credits, including those that were issued two years ago, then would those owners then be getting a windfall that their tax credits would suddenly appreciate in value because they'd have the ability to transfer them, they'd have the ability to extend them over a longer period?

I'd have to talk to folks to see exactly how that would work.

Okay, can you get back to us on that? Because that will determine the amendments that we would want to make to this measure. Because if we're increasing the value of those credits without creating any new housing, that would be a concern to this Committee. Okay, so when you estimate the amount.

So first of all, the idea that the State is foregoing $43 million but only getting 60 cents, 60% of that in terms of housing construction, do you believe that that's an efficient way to finance housing construction in the state of Hawaii?

The value of the tax credit, that is something that has, we do have Some concerns about if the value gets too low, then it may not be worthwhile.

Well, I mean, we're losing 40% of that just completely off the top right now, aren't we?

Yes. So whether or not that's efficient, I would defer to Department of Taxation about how they view that.

Shouldn't we just directly appropriate these funds and keep the tax revenue, keep the 43 million?

That is an option that the Legislature has.

Thank you. Chair, I have a question for DOTAX. Hello. Welcome. So I know in your testimony that it would be on the person that's. Transferring the tax credit to report it to DOTAX. Is that your understanding?

Correct.

And would doltax keep a record? How would compliance play into effect?

Yeah, that is why we've asked for a later effective date so that we can come together and figure out exactly how we're going to track this from the owner of the building to the person who received it, which is a little more obvious because that would be all in the return. And now we're selling it.

So we requested an earlier date so we don't have two people claiming the same credit. And then. Yeah, and then there's other tracking issues because it's non refundable. So then you have to carry it forward. We have to make sure that it's, you know, that part is it's just the balance.

And then we would have to trace that back to the owner. So, yeah, there's more Administration that's going to be necessary.

My second and last question is, does. DOTAX have the capacity to track that and administer it?

Well, we say we do on our testimony. So I think it's something that we'd have to get together and create rules and work with the other the people, all the managers in the different departments to figure out how we're going to do this because we don't sell any other tax credits. This will be the first time.

Good to know we're administering this.

Okay, thank you so much. Thank you, Chair. Thank you for the questions, Senator Fevella.

Not for you. HHFDC. So, yeah. So kind of what Senator Chang was talking about. So we're going to increase the ceiling. What is the prediction of productivity on these homes that's going to be built by having this ceiling raised going forward for the tax credit for the revenue bonds? Right.

I mean, right now, I'll give you an example. My community have a development as I land from the city. They're developing homes. Those homes in the future were supposed to have been for senior living.

But now they're going to make it so called again, they use the word all the time, affordable housing and affordable rentals, like they were just saying. So how are we going to monitor that in a sense of we're giving all of this out and the return is what Senator Chang said.

What is the percent that the developer is obligated to continue to move forward to getting these revenue bonds and moving forward? Because you know, I keep hearing saying that, oh, you know, if we don't do this, you know, the developers are not going to build.

Well, if we don't give nothing, the developers don't bill, they don't make money neither and they have to leave or they gotta go.

But again, they stay going, talk to the taxpayers and again the state to subsidize things that they're doing to entice them to do business in Hawaii because they want to make sure that they don't get their return 10 times, probably full. But again, we don't have an accurate account on the exact benefits because we need the housing.

Right. So what is the percentage that is going to be delivering on these revenue bonds going forward?

I think you're asking how does the state LIHTC incentivize development of housing? Is that your right? Right. So basically that helps to fill the financing stack for these affordable housing projects, where typically the financing stack includes some equity from the developer, quite a bit from tax credit equity. Most of that is federal tax credit equity.

But the state equity also helps. So if we took away the state tax credit, the developer has to find another source of financing to fill that gap. That might be more rental housing revolving fund, if funds are available. It might be a conventional loan if they can make that work.

But that's where the state tax credit comes in. It helps to fill that, that financing stack for projects, you take that away, they got to find something else to fill it.

Okay. I just, I just kind of concerned because it seems like that's going to be the enticement of, you know, future development using again the idea of again, that's a famous word they like to use, affordable, but again, for who? Affordable. Yeah, as we go in, affordable, it's in a 700,000.

I mean, you know, who's affordable for who? You know what I mean? So that's the word that I think we need to clarify when we continue to move forward and try to hit our housing goals going forward and what we will get in return. Thank you.

Thank you. Any further questions or discussion? Numbers. Okay, we'll move to our next Bill today, which is Senate Bill 2676 relating to housing, authorizes HHFTC to approve and certify get exemptions for certain housing development projects developed under county housing incentive programs. Mixed conforming amendments. Our first testifier is HHFTC with comments. Thank you. Department of Taxation with comments.

Center Urban Real Estate and support. Hawaii. Appleseed center for Law and Economic justice and support AARP Hawaii in support. And Housing Hawaii's future in support. Is there anyone.

Yes, we stand on a written testimony.

Thank you. Is there anyone else wishing to testify on Senate Bill 2676?

Thank you, Chair, Members of the Committee, Tom Yamachika from Tax foundation of Hawaii. We did prepare written testimony. I don't think it's gotten to you, so I'll make sure it does. Thank you very much for the opportunity. I'll be happy to answer any questions.

Thank you very much. Anyone else wishing to testify on SB2676? If not, Members, do we have any questions or discussion? If not, Chair has questions for HHFDC. So you requested in your testimony a single standard for affordability level as well as for the length of the affordability term in this bill. What would you recommend?

Well, basically, if this bill were to be adopted with the proposed affordability levels, we would amend our admin roles to match their affordability. The term though is said and statute. So if the intent is to lower the minimum to 15 years for county programs and perhaps it should be set the same for state projects also.

Okay, thank you. What do you also think about. What do you think about including city and state units that are required to be owner occupied or rentered, rented in perpetuity, including those as an additional category?

We will support that.

Basically, this bill is premised on giving an additional incentive for bill 7 developments, isn't it? Yes. So currently these bill 7 developments are receiving various cash handouts from the city and now they're asking for the GT exemption. For GT exemption. Essentially a cash handout from the state.

Right. It's cost savings for them.

As a policy matter. Do you think that the state should be subsidizing city projects like that?

I think the intention of the get exemption program is to incentivize the development of affordable housing. So it is a useful tool in that regards.

If we had unlimited taxpayer funding at the state, I would agree with you. But given that we have a limited amount of taxpayer funding, instead of just giving away money, shouldn't the state expect a return on the investments that it makes?

Even your rental housing revolving Fund loans, which I, you know, my complete favorite tool of creating affordable housing. Even those eventually get repaid. Yes.

Again, this was a tool created by the Legislature to provide an incentive for affordable housing. And so it reduces the cost of delivering those housing units.

Okay, thank you very much. But currently, so I guess to clarify, and this is my Bill for full transparency. So right now there's, you can take it. Right. For 30 years if you choose to. Right. For a Bill 7 project.

Bill 7 project. Yes. They can, they can work with us to commit to a 30 year period.

So when you say that. So I guess my thought is how do we incentivize. I think why I was okay introducing this was how do we incentivize not only Honolulu to create some fast track program.

And to their credit, you know, it's not the, it's not the end all be all, but at least it's creating some type of units. But my thought was, is how do we then figure out is there incentive enough for other counties to do something like this? Right.

And will they create their own fast track, you know, some type of housing program which we haven't seen. Right. I think Bill 7 is the only one. Right. We haven't seen anything else from other counties.

Okay. If that's the intent, then yes, I see where we might want to have a separate standard for the counties as a carrot for them to develop their own programs.

Because I think as long as if we're willing to give something and I think, you know, to me I was like, okay, if you really want this to work, I guess we got to give some if they're going to give something, I think to me it's better. Than us giving them a grant. Right.

Because I think at 1.0 that's what they wanted us to give. Rather a better get exemption than write out cash. But, you know, I guess, you know, hopefully, hopefully we can kind of watch to see what else. And we haven't been really understanding. Right. What else bill 7 needs.

We haven't kind of had too much interest into that. Right.

Yeah. So if that's the intent, then we could have different standards for state programs versus the county programs.

Okay. Okay, thank you. Further questions, Members. If not, we'll move to the next item on our agenda, which is Senate Bill 2552 relating to the individual housing account program for taxable years beginning 1, 1, 2027 increases the maximum annual deduction for contributions to maximum account levels for individual housing accounts. Our first testifier is the Department of Taxation with comments.

Thank you, Hawaii Realtors and support.

We stand on our testimony.

Hous. Thank you. Housing Hawaii's Future and support.

Chair, Vice Chair, Members of the Committee, My name is Perry, Perry A. Smith. I'm the Director of Policy at Housing Hawaii's Future just want to reiterate our strong support for Senate Bill 2552. If and when a young person decides. They want to stay in Hawaii and if and when they want to try.

And purchase a home, the first obstacle. They face is the down payment. This measure is designed to help folks. Save up to make that down payment. This program, I'd add, was established in 1982. It has not been adjusted for inflation since 1982. In 1982, the median price of a. Single family home on Oahu was less than $200,000.

We incentivize retirement through individual Savings Account retention. We accounts. We do the same with child care. We do the same with health care. We think we should be reincentivizing housing. Stability for young residents through the IHA program. So we humbly urge you to advance this measure. Thank you.

Thank you. Tax Foundation of Hawaii with comments.

Aloha. Colleen Taramay on behalf of President Tom Yamachika, who's in another hearing. The Tax foundation of Hawaii stands on its written testimony. Thank you.

Thank you. And then we have three individuals in support. Johnny May, Perry, Glenn Kagamida and Jesse. Is there anyone else wishing to testify of Senate Bill 2552? Members? Any questions or discussion? Okay. Chair has a question for. For Department of Taxation. Thank you. So what, what dollar amounts should be inserted into this bill?

Oh, I can't. I can't comment on that.

Can you calculate what they would be if adjusted for inflation since 1982?

I could. I could get back to you on that. Yeah. Sorry. Yeah. Yeah.

Thank you. All right. Any other questions or discussion? Numbers. Okay. We'll move next to Senate Bill 2451 relating to taxation. It eliminates the home mortgage interest deduction for second homes under Hawaii income tax law and requires reports to the Legislature. Our first testifier is Department of Taxation with comments. Comments. Tax Foundation of Hawaii with comments.

Aloha. The Tax foundation stands on its testimony. Thank you.

Hawaii Government Employees association in opposition. Hawaii Realtors in opposition.

Thank you, Chair. We stand on our testimony.

And several individuals. Kaleo K, Johnny May, Perry, Lyle in support. Victor K. Ramos, Lila Maurer in opposition. Is there anyone else wishing to testify on Senate Bill 2451? Okay. If not, do we have any questions or comments? I have a question.

Sorry. For the realtors. I guess it's a very basic philosophical question. So we, with the mortgage interest deduction, I believe it's the largest, the largest. Subsidy that the government gives for purchasing homes. Why do, why do you, why should we subsidize? We have all these people in Hawaii who can't buy first homes.

Why would we spend our money subsidizing people to buy a second home?

Thank you, Senator, for that question. My name is Lindsey Garcia. I'm here with the Hawaii Realtors. So it's a good question. I think, however, from our perspective, we believe that it is a misconception that second home mortgages, for instance, are only for the rich.

For those who obviously are very wealthy, they have enough money to be able to purchase a home straight out with cash and not needing to get a second mortgage.

However, in Hawaii, we do see a lot of families needing to buy a second home to house their elderly parents or to help with their adult children to be able to actually qualify for a home because their adult children, like you say, can't afford to have to get their own mortgage on their own.

So they get help from their family members who kind of help finance that mortgage by utilizing a second mortgage, if that makes sense.

But wouldn't, but wouldn't the child or. The grant or the older generation be the first? I mean, they're the primary residential. Why would that be considered a second home?

Because someone else in their family is actually taking on that financial burden and getting a second mortgage so that their family Member can live in a home, a separate home. So for that individual, it would be a second mortgage.

For them it would be a second mortgage, but it wouldn't be for a second home. You can get more than one mortgage on your first home if you want. To, or if you can get someone to do it.

I say what you mean, Senator.

Okay. Okay. Thanks. Thank you, Chair. Chair Sorry. Thank you. Thank you.

If the Tax foundation is around, I, I have a question.

Not available on Zoom, Chair.

Oh, okay. All right. Well, I had a question for legal advice. Actually, we do have the AG here, so I can ask you. Department of the AG.

So we heard testimony and we've received written testimony about Hawaii residents who buy a second home to house their aging parents, for example, or their kids who might not be able to qualify for a mortgage for whatever reason. What if we applied this bill only to non residents who acquire second homes? Would that be legal?

So I was actually asked to this question by your aid, and I checked with the attorney generals who are assigned to this bill, and they felt that doing that would create an issue, a constitutional issue under the privileges and immunities provision of the US Constitution.

Is there another way to effectuate that purpose without violating the Constitution?

When you start making a restrictions based on residency, then it usually creates an issue under the privileges and provision of the Constitution. So I do not off the top of my head know of a way that that could be done. I could ask and get back to you.

Okay. Or what about, you know, for example, what if it was restricted only to the. The deduction were restricted to. Only to second homes with when both are occupied for example by the family in the first home and then say they're aging parents in the second home.

That would be a way. And I think that because if you're using an owner occupied restriction, then that might be a way to do it.

Right. But then the second home or at least only one of these homes could be owner occupied. Right.

You could do it owner occupied by maybe the mortgage or related family members.

And you don't think that would violate the privileges and immunities clause?

I would, I would have to check on that. Get back to us. Okay.

All right. So maybe we can further work on this and on an amendment in that. In that vein. True. Okay, thank you Members. Any further questions or questions?

No for, for DOTAX. Not for the Deputy Attorney General. Hello again.

Hi.

Do you know currently does dotex have. Figures on how many applicants get approval for interest deduction on second homes? Currently no. Is that something that you could provide to the Committee?

I'm not sure. We could probably do a mortgage like a. Probably a mortgage interest. I'm not sure. I'm not sure if they can distinguish what comes from a second home. Okay, I will ask. Okay. Now. Yeah.

If. If you're able to. Okay. Yeah. Thank you. Thank you. Chair.

Just like clarification along zoneless Senator Rhodes was saying. So what I'm not understanding is that if I take out a second mortgage on my home, right. Because I can and I have the equity to purchase another home. I still not getting clarification.

Why would that be my second home if I have a second loan on my house and I'm purchasing the home or family staying there. So why would be. That would be my second home. You understand? I mean I think that's what Senator Rhodes. I don't understand how would that be?

So it seemed like if I take out a home equity loan, right. And purchase another house and then my daughter would go in, it wouldn't be my house house, it be her house.

Oh, okay. Under her name. Right. Right.

So that's what I'm saying. So if you like the mortgage, so you're saying that when we take out the second mortgage, if it's not in my kid's name, then yeah, I can understand that's a second home, but I'm not buying it for myself or buying it for them.

So if I buy the second home with the money money that I have, it'll be on their in their name.

Right. In, in that case, you would be able to deduct your equity line also under this, if this were to pass, because you would only own one home. Thank you. Chair.

Thank you. Further questions.

Thank you very much.

Okay. If not, thank you very much. That brings us to the end of today's agenda. We're going to go into recess and come back for some decision making.

Thank you very much. The Committee on Housing is back from recess to do some decision making on our 1:01pm agenda. Chair will also note that we'll roll straight into decision making into the deferred decision makings on Senate Bill 2180 and 2020-2424. Immediately after the 1:01pm agenda is DM'd.

Our first bill today is Senate Bill 2544 relating to housing. Chair's recommendation will be to pass with amendments to add a preamble.

Add to the preamble a description of the BC Builds program on which this Bill is modeled, including its successes including having over 30 projects in pre development in the two years since the program was launched and also include a description of the rocket fuel strategy of accelerating project timelines.

We'll replace the requirement that half of the units be for 60 to 140% of AMI with a requirement that the majority of the units comply with requirements imposed by HHFTC under HRS 201H38. And further, we'll change section paragraph F on page 4, line 18 to page 5, line 2.

Any use of monies from the Dwelling Unit Revolving Fund, including but not limited to construction financing or equity Investment under subsection D2, shall be structured to ensure a reasonable return to the Dwelling Unit Revolving Fund will further defect the date. And we also have technical non substantive amendments for the purposes of clarity and consistency.

And we will additionally note in the Committee report the SPO concerns, but also that the Government Governor's Emergency Proclamation currently already exempts housing agencies from Chapter 103d. This bill would simply codify that exemption. We'll also note the 103 exemption's importance for HHFTC to quickly and efficiently develop the housing that the State needs.

Members, do we have any discussion if not For Senate Bill 2544? Chair's recommendation is to pass with amendments. Chair votes Aye.

Members SB2544 chairs Recommendation is passed with amendments. [Roll Call] Chair recommendations adopted. Thank you.

For Senate Bill 2338 relating to housing, the Chair's recommendation will be to pass this measure with amendments. We'll defect the date. We'll take PHA's suggestion to insert language in Section 356d 2 hrs subsection A to read to include the phrase provided that the authority shall have autonomy in personnel matters, including establishing and filling positions and setting salaries.

We will not be taking DHRD's suggested amendments we'll further amend to create a new Finance Director positioned to oversee all finance programs of the corporation and develop new initiatives to deliver housing to a range of household incomes as efficiently as possible and with the least use of state resources.

And in part, we'll do that by amending paragraph b of Section 201H2 to read the Corporation shall employ, exempt from Section 76 from Chapter 76 in Section 2635A4, an Executive Director and a deputy Executive Director and a Finance Director.

The Finance Director shall be paid a salary set by the Board established under Section 201H3, provided the salary may exceed the salary of the Executive Director.

The Finance Director shall oversee all finance programs of the corporation and possess experience relevant to public finance and housing finance, including the Administration of revolving loan funds and complex capital structuring, bond issuance, debt management and credit underwriting, asset and portfolio management, including risk assessment and mitigation strategies for long term loan portfolios and strategic financial planning and regulatory compliance with federal and state housing programs.

We'll also amend the preamble to recognize that the salary increases and the creation of the Finance Director position are being given not merely to reward the greater responsibility over the last 10 years, but also to great but really to greatly expand the agency's housing development plans.

And we'll also add metrics by which to measure HHFDC personnel performance including but not limited to the number of units delivered by program type, state funding per unit, the rate that funds revolve and and the range of household income served. And finally, there are technical non substantive amendments for the purposes of clarity and consistency.

Addition in the Committee report we'll note HHFTC is challenging in granting challenges in granting merit based salary increases to its hard working employees recently. Members any discussion? Okay? If not Chair's recommendation for Senate Bill 2338 is to pass with amendments. Chair votes aye.

Members SB 2338 chairs organizations pass with amendments. Any vote Any Members voting with reservations? Any Members voting no? With all others voting Aye. Recommendation's adopted. Thank you.

Our next measure is Senate Bill 2553 relating to the housing loan and mortgage program.

As mentioned in the hearing, Chair wants to hear HHFDC's assurances, including perhaps an amendment form in this Bill a more comprehensive plan of how they will supply much more housing, including middle income housing, revenue, neutral housing and financial products that will revolve faster than 60 years and pay greater than 0.25% interest.

So we'll be working with HHFDC on potential amendments to address those concerns. And so we'll be deferring decision making to Tuesday, February 10th at 1pm in room 225 on that measure. Any questions? Discussion? Okay. If not, we'll move to our next measure, Senate Bill 2675 relating to the low Income Housing Tax Credit.

Again, Chair will be deferring decision making to February to Tuesday, February 10, 1pm in this room 225. Any questions or discussion? If not, our next bill is Senate Bill 2676 relating to housing. Again, we'll be deferring decision making on this Measure until Tuesday, February 10, 1pm in room 225. Any discussion for questions, Members? Okay.

If not, we'll next move to Senate Bill 2552 relating to the Individual Housing Account program. As mentioned during the hearing, we'll be awaiting dollar amounts on pages 23 and 4 as adjusted for inflation since the institution of this program from the Department of Taxation.

And so we'll be deferring decision making until Tuesday, February 10, 1pm in room 225. Any questions or discussion numbers? Our next bill is 2451 relating to taxation. As mentioned during the hearing, we have some legal issues that we want to address. So we'll be deferring decision making on this to Tuesday, February 10th at 1pm in room 225.

Any questions or decision making or discussion numbers? If not, we'll move straight into the deferred agenda. Senate Bill 2180 relating to deposits of public funds. The CPN Committee has already dmed on this measure and so the Housing Committee will also be doing so today.

Chair's recommendation will be to pass with amendments to defect the date to January 12050. Any questions or discussion? Members, Note my reservations. Chair thank you very much. Noting reservations for Senator Elefante. So For Senate Bill 2180, Chair's recommendation is to pass with amendments. Chair votes Aye.

Members SB2180 Treasury recommendations passed with amendments noting the reservations for Senator Elefante. Any others? Members with reservations? Any Members voting no? With all others voting Aye. Recommendations adopted. Thank you.

And our final measure today is another deferred decision making on Senate Bill 2424 relating to HHFDC. Chair's recommendation will be to pass this measure with amendments. We'll be restoring paragraphs 2A and 2B.

We'll also allow the long term vacancy of these units greater than six months only under reasonable circumstances, including but not limited to renovation, probate, unforeseeable job or military transfer, a temporary educational sabbatical, serious illness or in other circumstances as determined by the corporation on a case by case basis, we'll be exempting these units from the 10 year occupancy requirement under Section 201H49 as well as the buyback provisions under Section 201H47.

We'll be limiting ownership of these units to one per person at a time unless acquiring another unit produced under the statute in which the owner under in which case the owner may own both units for up to 12 months will defect the date and will also have technical, non substantive amendments.

For the purpose of clarity and consistency, Members, do we have any discussion or questions? Okay. If not For Senate Bill 2424, Chair's recommendation is to pass with amendments. Chair votes Aye.

Members, SB 2424 Chairs organization passed with amendments Chair votes Aye. Any Members voting with reservations? Any Members voting no? With all others voting Aye. Recommendation's adopted. Thank you so much.

With no further there being no further business, this hearing is adjourned.