Government Affairs Update
May 2, 2008
ONLINE VERSIONS
2) Bills that passed the legislature
3) Bills that did not pass the legislature
BILLS THAT DID NOT PASS THE LEGISLATURE
BUSINESS
S.B. 2059 Relating to Information Practice
Description: Protects from public disclosure certain information compiled as part of an inquiry into an individual's fitness to be granted or to retain a professional or vocational license.
Position: SUPPORT. The bill removes the onerous practice of reporting all complaints filed against a real estate licensee, whether innocent or guilty. The complaint remains on the website for 5 years and is not removed, even if the investigation is closed for lack of evidence or merit, or if there is a determination that a violation did not occur by Regulated Industries Complaint Office.
S.B. 2407 Relating to Appraisers
Description: Prohibits financial institutions and mortgage brokers from improperly influencing the reporting, result, or review of a real estate appraisal.
Position: MONITOR. On March 3, 2008, FannieMae announced the adoption of the Home Valuation Protection Code, which will go into effect on January 1, 2009. Although the bill in the State may be unnecessary, HAR requested that any amendments should continue to be limited to financial institutions and mortgage institutions, and not real estate licensees.
H.B. 3107 Relating to Owner-Builder Permits
Description: Requires sellers to disclose whether a building or structure was built or improved under an owner-builder permit and clarifies that owner-builders must use licensed subcontractors when altering, improving, demolishing, or repairing any building or structure.
Position: CONCERN. The bill effectively changes the scope by requiring that it will apply to all construction and structural improvements, all alterations, improvements, and repairs made to the property. The consequence of this broad language is that a person who has performed even some relatively minor non-structural alterations, repairs, or changes to their home, including those for the purpose of selling the home within a one-year period, would potentially subject the owner-builder to the severe sanctions.
H.B. 2657 Relating to Tenant Screening Agencies
Description: Creates a regulatory process for the Department of Commerce and Consumer Affairs to administer and enforce tenant screening agencies.
Position: SUPPORT. Although the intent of the bill is admirable, any new regulatory measure bring considered for enactment must be referred to the State Auditor for sunrise review.
S.B. 2783 Relating to Loss Mitigation
Description: Directs the insurance commissioner to develop criteria for earthquake resistive devices. It appropriates funds from the Hawaii Hurricane Relief Fund to the loss mitigation grant fund. Requires the Insurance Commissioner to report on the feasibility of converting the Hawaii Hurricane Relief Fund program into a natural disaster relief program.
Position: CONCERN. The Legislature enacted laws that appropriated 1) $29 million and any future interest since 2002 from the Hawaii Hurricane Relief Fund to the General Fund; 2) $4 million to tsunami preparedness efforts; and 3) $4 million to the Loss Mitigation Grant Fund. Although HAR is opposed to utilizing the principal for any purpose other than the original intent, we could support efforts to create a statewide natural disaster policy to help property owners prepare for and protect against losses from all future catastrophic events, not only hurricanes.
HOUSING
S.B. 2046 & H.B. 2120 Relating to Multi-Unit Residential Buildings
Description: Requires regular surveys of residents of multi-unit residential buildings on specific needs and issues relating to medical needs, accommodations for the disabled, and other special needs for emergency preparation purposes. Requires multi-unit residential buildings to have and inform their residents of emergency evacuation plans.
Position: OPPOSE. This bill expands the role of condominium associations in violation of the Fair Housing Act. The Fair Housing Act prohibits discrimination on the basis of disability in all types of housing transactions. The very act of issuing a survey, even if it is voluntary, can be construed to be discriminatory.
S.B. 2802 Relating to Rental Security Deposits
Description: Requires landlords to add 6% interest to security deposits returned to tenants and to maintain security deposits and any interest accruing thereto in trust or separate accounts.
Position: OPPOSE. The bill creates many unintended consequences. One, the security deposit cannot be accessed without mutual agreement of landlord and tenant creating for situations where repairs cannot be made. Second, landlords cannot invest the security deposits in an FDIC insured account that pays 6 percent in addition to a separate account for each security deposit.
S.B. 2123 Relating to Residential Landlord-Tenant Code
Description: Allows counties to enact an ordinance to regulate the amount of rent increase for residential apartment buildings.
Position: OPPOSE. Many studies show that rent control does not work. A look at the classified ads in rent-controlled cities reveals that very few moderately priced rental units are actually available and a trend in recent years has been towards removal of rent control.
S.B. 2208 & H.B. 2762 Relating to Domestic Violence
Description: Prohibits a landlord from evicting a rental housing tenant solely on the basis that the tenant is a victim of domestic violence.
Position: CONCERN. Although the intent is admirable, the bill does not address some basic protections such as the lack of any liability protection of landowner from neighbors and tenants, lack of any requirement for the removal of perpetrator from the household and possible abuses of a month-to-month lease.
S.B. 2294 Relating to Kakaako
Description: Increases the reserved housing requirement for a major development on a lot of at least one acre in the Kakaako community development district, mauka area.
Positon: MONITOR. Kakaako was envisioned as a mixed-use community of residential, commercial, industrial, and public uses. The residential development within the district is intended to encompass housing for families of various income levels. The State has invested at least $200,000,000 in public funds for the infrastructure and the public investment has sparked increased investments and development plans for the area.
H.B. 2302 Relating to Real Property
Description: Authorizes the Registrar of the Bureau of Conveyances to accept electronic documents with electronic signatures for recording and requires the Judiciary to study the effects of electronic recording on the adjudication of Land Court applications.
Position: SUPPORT. HAR was a stakeholder that was involved in the Advisory Committee on Automation of Paper Processing of the Bureau of Conveyances. This bill attempts to streamline the process of recording land title documents in the Land Court and Bureau of Conveyances.
LAND USE
H.B. 2242 Relating to Counties
Description: Authorizes each county to impose upon certain subdividers or developers an affordable housing requirement as a condition for approval of a subdivision or issuance of a building permit and requires approval of the requirement by the Land Use Commission.
Position: OPPOSE. The lack of affordable housing is due to the lack of overall supply of housing. The bill will create uncertainty with development and financing. Also, affordable housing percentages imposed by the counties may be unreasonable and cause unwanted distortions in the housing market.
H.B. 3415 Relating to Public Roads
Description: Allows any person to file for a contested case hearing to determine jurisdiction over a public road and establishes the determination process.
Position: SUPPORT. Many situations exist by the "roads in limbo" syndrome where public roads over which neither the state nor the appropriate county will take jurisdiction of nor will maintain. In many such cases, the affected community must maintain its road link to the rest of the world themselves, using their small community's limited resources. Property owners have been blocked from building on home sites because the community's road has not been recognized by the county.
S.B. 2641 & H.B. 2684 Relating to Important Agricultural Lands
Description: Establishes a five-year moratorium on the reclassification, rezoning, and development of agricultural land before the identification and designation of important agricultural lands.
Position: OPPOSE. The bill could place many legitimate projects in jeopardy. It is a sweeping moratorium that is overly broad and would leave no room to examine each situation thoughtfully.
S.B. 2835 Relating to Public Access
Description: Requires state and county agencies to ensure that a public right-of-way is available prior to the approval of any and all development project, subdivision, or zoning change, and modifies definitions of "public recreational area”.
Position: OPPOSE. This bill specifically targets building permits as a means for obtaining additional public access could result in unlawful taking of land from property owners. It would unfairly trigger a public access requirement for small single-family remodeling or repair projects needing simple building permits.
S.B. 2997 Relating to Land Use
Description: Establishes historic agricultural landmarks, designated by law, to be preserved and perpetuated as agricultural land.
Position: OPPOSE. HAR opposed the bill as it would provide a statutory means of preserving “historic” lands without the necessity of an outright acquisition through eminent domain. It sets a bad example of how a specific plot of property can be legislatively taken for a specific use. The bill further deprives the landowner of due process in a court of law. Such an attempt to designate a specific plot of land that does not allow for input and appeal by the landowner is a taking.
TAXATION
S.B. 2997 Relating to General Excise Tax
Description: Imposes the general excise tax on the value of the work performed by owners-builders on their residences.
Position: OPPOSE. The bill attempts to tax not only illegitimate owner-builders but also unfairly taxes legitimate owner-builders that have invested substantial sweat equity.
S.B. 2392 & H.B. 2733 Relating to Housing
Description: Assesses a additional anti-speculation tax on the capital gains of: a) 60% of the capital gains tax owed if property was held by the seller for less than six months; b) 30% of the capital gains tax owed if the real property was held by the seller for six months but less than twelve months; and c) 15% of the capital gains tax owed if real property was held by the seller for twelve months up to and including twenty-four months.
Position: OPPOSE. This is another attempt that unfairly impacts small investors, will not materially impede the turnover of real property in Hawaii, and may not raise much additional revenue.
S.B. 2818 Relation to Taxation
Description: Requires the Department of Taxation to evaluate certain tax credits and tax exemptions and provides for automatic repeal of the tax credits and tax exemptions.
Position: SUPPORT & OPPOSE. HAR supported the bill in Senate Draft 2 format, which was a “Streamlined Sales Tax Project”. A majority of states have signed onto the Streamlined Sales Tax Project or SSTP, which is basically a national reciprocal tax agreement on internet sales, and are awaiting the "green light" by Congress to put the SSTP into effect. After crossover, the House gutted the bill and replaced it with language that repeals the rental housing general excise tax exemption, which we opposed.
S.B. 3165 Relation to Taxation
Description: Specifies that a county shall not grant an exemption from the general excise tax or receipt taxes for a mixed-use transit-oriented joint development project and exempts from general excise tax a project developed to provide affordable rental housing or a community health care facility within a mixed-use transit-oriented joint development project.
Position: SUPPORT. One key strategy that can be used to create and preserve mixed-income housing near transit is to provide incentives that help catalyze the market for mixed-income transit oriented development. Obstacles to building mixed-income transit oriented development housing include funding for affordable housing and mixed income and mixed use projects requiring complex financing structures.
For the most current and detailed information on bills, go to http://www.capitol.hawaii.gov for bill status and descriptions.