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Hearings inundated the State Capitol again this week in order to meet the next major deadline, First Lateral, on February 18^th.  The issue on the topmost of everyone’s mind is taxes for transit system and affordable housing. 

Statutory Agency and Non-Agency Brokerage
The Senate Committee on Commerce, Consumer Protection, and Housing heard testimony on SB 109 from Real Estate Commissioner Louis Abrams and Legislative Committee Member Tracy Stice. After a thorough and positive hearing, both Louis and Tracy agreed to continue the dialogue between both groups until the next Legislative Session. Effectively, this means the bill is "held" until next year. Senator Ron Menor publicly commended Tracy and the Hawaii Association of REALTORS® on its attempts to work with other parties.

From this time until the next Legislative Session, HAR will work together with the Real Estate Commission to craft the appropriate legislation, member and licensee communications and strategy.

This week, Legislative Committee Members Riley Hakoda and Walt Harvey presented updates on the bill to the Leeward Regional and East Honolulu Regional Groups.

Landlord Liability
Under HB 833, landlords will be held liable if they do not act within seven days, of notification from anyone, to cause or attempt to cause the unlawful acts of the tenant to cease. With this situation the landlord will be held liable for not acting in seven days, but also could be subject to suit from the tenant if forced to take action without adequate proof of illegal activity by the tenant.

The broad language in the bill would force landlords to carry more costly insurance – which would cause our expensive rents to rise even higher. The Hawaii Association of REALTORS®, the National Association of Residential Property Managers (NARPM), and the Institute of Real Estate Management (IREM) testified in strong opposition to the bill.

Drug Rehabilitation Homes in Residential Areas
HB 1734 proposes to repeal language in the Hawaii Revised Statutes on the permitted use of drug rehabilitation homes in residential areas. This bill would create more stringent requirements at the county level to assure that public input is sought before granting permits to operate drug rehabilitation homes in residential communities. This bill was heard in the House Committee on Judiciary but was deferred.

Bans Use of Hand-Held Cellular Phones
HB 88 proposes to ban the use of hand-held cellular phones while operating a motor vehicle. The Hawaii Association of REALTORS® testified in opposition to the bill. A comprehensive report done by the California Highway Patrol in 2002 indicated that the use of a hand-held cell phone caused only 0.01 percent of all accidents, compared to driver inattention due to changing stations on the radio/CD, having children or pets in the car, smoking, or eating. This bill does not allow a driver to pull to the side of the road to speak on his or her hand-held cellular.

Leasehold Conversion
Under SB 1793, it exempts from taxation 50% of income received by lessors from sale of leased fee interest in multifamily leasehold residential properties and residential leasehold house lots to lessees. The Hawaii Association of REALTORS® testified in support with amendments:

First, we recommended that the exemption be increased from fifty percent to one-hundred percent. A one-hundred percent exemption from tax ("tax-free”) would provide incentives for lessors to sell, essentially opening it for the lessees. Congressional Member Neil Abercrombie also introduced a bill on Capitol Hill that offers a one-hundred percent exemption. The second recommendation is to expand the exemption of sales to include association as well as individual lessees. In this housing market. Finally, the bill should expand to include planned unit developments (PUDs). The bill already includes condominiums and cooperative housing projects (co-ops).

The Senate Committee on Commerce, Consumer Protection, and Housing amended the bill and changed the exemption to one-hundred percent and included PUDs.

Conveyance Tax Increase & Affordable Housing
Legislative Committee Vice-Chair Craig Hirai testified on HB 1571, which attempts to require 25% of general excise taxes collected for rental of residential dwelling units other than transient accommodations to be deposited into the rental housing trust fund for affordable housing. Also, the bill increases the percentage of the conveyance tax collected and deposited into the rental housing trust fund from 25% to 50%.

This bill is generally consistent with the 2002 National Association of REALTORS® (NAR) Housing Opportunity Program, except for a conveyance tax increase which the Hawaii Association of REALTORS® strongly opposes.

2002 National Association of REALTORS® (NAR) Housing Opportunity Program:

• Preserve the existing housing stock through grants, loans and financial incentives.
• Streamline the zoning and planning approval process.
• Utilize density bonus features that encourage the development of units priced to sell and rent at the lower end of the market.
• Establish housing trust funds in order to build affordable housing.
• Better coordinate services and eliminate duplication.
• Make better use of low-interest loans, block grants, low-income housing tax credit programs and deferred loan programs to provide both homeownership and rental
  housing opportunities.
  

This bill was deferred and will not be considered for passage this year.

To view any of the bill text and testimonies submitted by the HAR, visit http://www.hawaiirealtors.com/government_affairs/LA/testimonies.asp.

For the most current and detailed information on bills, go to http://www.capitol.hawaii.gov for bill status and descriptions.

If you have any questions or comments you would like to forward to the Legislative Committee, please call 733-7060 or 1-888-737-9070 or by e-mail at govtaffairs@hawaiirealtors.com.