SB944 amends Hawaii’s low-income housing tax credit law to clarify how the credit may be used by partnerships and limited liability companies. Under the bill, a partnership or LLC that receives an allocation of the credit may further allocate it, or transfer, sell, or assign all or part of it to any taxpayer, even if that taxpayer does not have a direct or indirect ownership interest in the qualified low-income building. The bill also requires notice to the Department of Taxation when a credit is transferred, sold, or assigned.
The bill further extends the sunset date for the underlying low-income housing tax credit program from December 31, 2027 to December 31, 2032. It preserves the existing credit structure in section 235-110.8 of the Hawaii Revised Statutes and makes clear that the credit may be claimed even by taxpayers who are not eligible for the federal low-income housing tax credit under section 42 of the Internal Revenue Code. The measure is framed as a continuation and clarification of the state’s housing tax incentive rather than a new credit program.
Impact
SB944 would amend section 235-110.8, Hawaii Revised Statutes, to broaden flexibility in how low-income housing tax credits are allocated and transferred among partners, LLC members, and other taxpayers. It also amends prior session laws to extend the program’s repeal/sunset date to 2032, ensuring the state credit remains available for a longer period. The bill affects taxpayers claiming the credit, partnerships and limited liability companies involved in housing projects, and the Department of Taxation, which would receive transfer notifications.
Sentiment
The available voting record shows strong support for the bill. It passed the Senate Housing Committee 4-0 and the Senate Ways and Means Committee 13-0, both with amendments, indicating broad bipartisan or cross-committee agreement on the need to extend and clarify the credit. No committee transcripts were provided, so there is no recorded floor or committee debate to suggest organized opposition in the materials provided.
Contention
The main policy issue reflected in the bill is whether low-income housing tax credits should be transferable beyond the direct owners of the qualified building and whether entities such as partnerships and LLCs should have broad discretion to reallocate those credits among themselves or to third parties. Supporters appear to favor these changes as a way to improve usability and financing flexibility for housing projects. Any potential concern would likely center on administrative oversight, tax-credit trading, and the fiscal cost of extending the program, but no explicit opposition is shown in the provided votes or transcripts.