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REPORT OF THE <br />COMMITTEE ON FINANCE <br />DATE: June 18, 2024 <br />PLACE: Council Chambers <br />Kailua-Kona, Hawaii <br />TIME: 3:46 p.m. <br />Council Chair and Members <br />Hawaii County Council <br />Hilo, Hawaii 96720 <br />Re: Comm. No. 600/13ill No. 104 <br />Your Committee on Finance, to which was referred Bill No. 104, reports as follows: <br />Bill No. 1.04, transmitted by Committee Member Jenn Kagiwada and Committee Member Michelle <br />Galimba, via Communication No. 600, dated November 8, 2023, amends Chapter 19, Article 1, <br />Section 19-2; Chapter 19, Article 7, Section 19-53; and Chapter 19, Article 11, Section 19-90, of the <br />Hawaii County Code 1983 (2016 Edition, as Amended), Relating to the Creation of a Long -Term <br />Rental Class for Real Property Taxes. <br />This bill establishes a Long -Term Rental tax assignment classification for properties that are occupied <br />under a lease for at least 12 consecutive months and under a signed lease for six consecutive months or <br />more to the same tenant. <br />Finance Committee Meeting of December 5, 2023 <br />Real Property Tax Administrator Lisa Miura, Assistant Administrator Keita Jo, and Finance Director <br />Deanna Sako were in attendance and available for questions. <br />Committee Member Jenn Kagiwada provided some background and the inspiration for this bill and the <br />hope to help remedy the existing housing crisis. Ms. Kagiwada stated the Apartment Tax Class affects <br />long-term rentals for residents and commented on the amount of vacant homes and lots in Hilo <br />neighborhoods. Ms. Kagiwada highlighted a situation with a friend helping an elderly woman in need of <br />housing and further explained that he is now being taxed at a higher rate. Ms. Kagiwada further stated <br />she collaborated with Committee Member Michelle Galimba and the Real Property Tax Administrators <br />to devise a solution to address these issues. <br />Ms. Galimba shared thoughts and presented a PowerPoint (see Comm. 600.2) on this bill and its <br />benefits. Ms. Galimba asked Mr. Jo to discuss some of the thoughts, potential participation, fiscal <br />impact, and timing. <br />Committee Member Cindy Evans commented on the use of traveling nurses and physicians mentioned <br />in the presentation. She shared that her community has many traveling physicians and nurses who <br />currently pay a much higher rent than residents, and asked if the bill's intent is to get people into <br />long-term rentals. Ms. Evans also wondered if there may be unintended consequences by giving these <br />homeowners who receive the tax break and the ability to charge above the current market value for <br />rental housing. <br />FC Report No. 170 <br />