SB 1462 Summary

• Establishes a limited-profit housing council within the Department of Business, Economic Development, and Tourism to oversee and govern limited-profit housing associations, with members including executive directors from housing finance and public housing authorities, state agency heads, legislative committee chairs, and county housing representatives.

• Creates a new statutory framework authorizing domestic corporations to establish themselves as limited-profit housing associations upon council approval, requiring their primary purpose be long-term affordable housing and that all directors and officers be independent with no financial relationships with contractors.

• Requires limited-profit housing associations to charge fixed prices for affordable housing units based on construction, operating, and reserve costs only, with revenues held in a revolving fund and annual profit distributions limited to a council-determined interest rate on shareholder equity.

• Exempts limited-profit housing associations from Hawaii income tax on earnings used for primary business activities, provided income is verified as used within five years, and exempts conveyances to or by such associations from conveyance tax.

• Takes effect July 1, 2050, except the tax exclusion provision (Part II) takes effect January 1, 2024.