HOUSE OF REPRESENTATIVES

H.B. NO.

605

THIRTY-FIRST LEGISLATURE, 2021

H.D. 1

STATE OF HAWAII

 

 

 

 

 

 

A BILL FOR AN ACT

 

 

RELATING TO HOUSING SAVINGS ACCOUNTS.

 

 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

 


     SECTION 1.  The legislature finds that the price of a home is rising faster than incomes.  Though rental housing costs vary by county in the State, the biggest expense for any individual or family is housing or shelter.  It is harder and harder for individuals and families to save for a down payment on a home or pay for their mortgage or rent.  Furthermore, the cost of housing in Hawaii has increasingly become more of a challenge for renters and homeowners.

     The legislature further finds that state and county housing agencies have been trying to create affordable housing for decades.  However, development costs are so high and the shortage of affordable housing so great that traditional programs have been able to create only a fraction of what is needed.

     The legislature also finds that creative, new approaches are needed to help with Hawaii's affordable housing crisis.  One such option would be the creation of a housing savings account system, which would establish a mechanism to facilitate saving for housing via automatic payroll deductions.  Under a housing savings account system, employers would be required to offer employees the opportunity to contribute to the housing savings accounts, although employee participation would be optional.  However, the legislature notes that this type of proposal requires a thorough analysis, including the costs, benefits, and feasibility of implementing such a program.

     Accordingly, the purpose of this Act is to require the legislative reference bureau to conduct a study on the establishment of a housing savings account system that would provide every employee in the State the ability to automatically contribute to a housing savings account through payroll deductions.

     SECTION 2.  (a)  The legislative reference bureau shall conduct a study on the establishment of a housing savings account system that would provide every employee in the State the ability to automatically continue to a housing savings account through payroll deductions.

     (b)  When conducting the study, the legislative reference bureau shall include an assessment on the costs, including staff and operating costs; benefits; implementation strategy; and timeline for establishing a housing savings account system that includes the following components:

     (1)  A board responsible for the administration of the housing savings account system;

     (2)  A requirement that each employer in the State offer its employees the opportunity to contribute to a housing savings account through payroll deduction;

     (3)  The ability for each employer in the State to match an employee's contribution into the employee's housing savings account;

     (4)  A prohibition on funds in a housing savings account receiving any additional tax benefits or being exempt from state income tax;

     (5)  The ability for funds contributed into a housing savings account to be used for any purpose, including but not limited to:

          (A)  Down payments;

          (B)  Mortgage payments;

          (C)  Rent; or

          (D)  Security deposits;

     (6)  A requirement for employers to enroll participating employees in the housing savings account system and report enrollment information to the board;

     (7)  The ability for employees to opt out of contributing to a housing savings account at any time; and

     (8)  A default individual housing savings account contribution rate of five per cent of each employee's compensation, with an option for an employee to elect to contribute a different amount on a form to be developed by the employer.

     (c)  The legislative reference bureau shall submit a report of its findings and recommendations, including any proposed legislation, to the legislature no later than twenty days prior to the convening of the regular session of 2022.

     SECTION 3.  This Act shall take effect on July 1, 2050.



 

Report Title:

Housing Savings Account System; Housing Savings Account; Payroll Deductions; Study; Legislative Reference Bureau

 

Description:

Requires the legislative reference bureau to conduct a study on the establishment of a housing savings account system that would provide every employee in the State the ability to automatically contribute to a housing savings account through payroll deduction and submit a report to the legislature.  Effective 7/1/2050.  (HD1)

 

 

 

The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.