REPORT TITLE:
Renaissance Zones


DESCRIPTION:
Authorizes the governor to designate up to 8 renaissance zones in
the State.  Establishes the renaissance review board.  Exempts
persons located and operating within renaissance zones from up to
100% of the person's income and general excise taxes.  Requires
DBEDT to submit annual report on the economic effects.

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                        
HOUSE OF REPRESENTATIVES                H.B. NO.505        
TWENTIETH LEGISLATURE, 1999                                
STATE OF HAWAII                                            
                                                             
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                     A BILL FOR AN ACT

RELATING TO ECONOMIC DEVELOPMENT.



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

 1      SECTION 1.  The legislature finds and declares that there is
 
 2 a continuing need for programs to encourage economic development
 
 3 in this State, including subsequent job creation and retention
 
 4 and ancillary economic growth.  To achieve these purposes, it is
 
 5 necessary to create renaissance zones and provide temporary
 
 6 relief from certain taxes within the renaissance zones.
 
 7      The purpose of this Act is to authorize the governor to
 
 8 designate up to eight renaissance zones in the State based on
 
 9 certain criteria.
 
10      SECTION 2.  The Hawaii Revised Statutes is amended by adding
 
11 a new chapter to be appropriately designated and to read as
 
12 follows:
 
13                             "CHAPTER
 
14                      STATE RENAISSANCE ZONES
 
15         -1  Definitions.  As used in this chapter:
 
16      "Department" means the department of business, economic
 
17 development, and tourism.
 
18      "Development plan" means a written plan that addresses the
 
19 criteria as provided in section    -5 and includes all of the
 

 
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 1 following:
 
 2      (1)  A map of the proposed renaissance zone that indicates
 
 3           the geographic boundaries, the total area, and the
 
 4           present use and conditions of the land and structures
 
 5           within those boundaries;
 
 6      (2)  Evidence of community support and commitment from
 
 7           residential and commercial interests;
 
 8      (3)  A description of the methods proposed to increase
 
 9           economic opportunity and expansion, facilitate
 
10           infrastructure improvement, and provide job training;
 
11      (4)  Current social, economic, and demographic
 
12           characteristics of the proposed renaissance zone and
 
13           anticipated improvements in education, health, human
 
14           services, public safety, and employment if the
 
15           renaissance zone is created; and
 
16      (5)  Any other information required by the department.
 
17      "Person" means an individual, partnership, corporation,
 
18 association, limited liability company, or other legal entity.
 
19      "Renaissance zone" means a geographic area designated by the
 
20 governor under this chapter.
 
21      "Review board" means the renaissance zone review board
 
22 created in section    -4.
 
23         -2  Application; criteria.  A person may apply to the
 

 
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 1 review board for the designation of a distinct geographic area
 
 2 within the State as a renaissance zone, which shall not be
 
 3 greater than ten acres in size.
 
 4         -3  Application; procedure.  An application shall
 
 5 include:
 
 6      (1)  A development plan as defined in this chapter; and
 
 7      (2)  The proposed duration of renaissance zone status, not
 
 8           to exceed fifteen years.
 
 9         -4  Review board.(a)  The renaissance zone review
 
10 board is created within the department.  Membership in the review
 
11 board shall consist of:
 
12      (1)  The director of finance, or the director's designee;
 
13      (2)  The director of business, economic development, and
 
14           tourism, or the director's designee; and
 
15      (3)  The director of taxation, or the director's designee.
 
16      (b)  The review board shall make recommendations to the
 
17 governor for selection based on the criteria contained in
 
18 section    -5.
 
19      (c)  The designation of a renaissance zone under this
 
20 chapter shall take effect upon designation by the governor.
 
21         -5  Designation; criteria.  The governor shall consider
 
22 the following criteria in selecting a renaissance zone:
 
23      (1)  Evidence of adverse economic and socioeconomic
 

 
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 1           conditions within the proposed renaissance zone;
 
 2      (2)  The viability of the development plan;
 
 3      (3)  Whether the development plan is creative and innovative
 
 4           in comparison to other applications;
 
 5      (4)  Public and private commitment to, and other resources
 
 6           available for, the proposed renaissance zone;
 
 7      (5)  Demonstrated cooperation from surrounding areas; and
 
 8      (6)  Any other information required by the governor.
 
 9         -6  Zones; number.  The governor shall not designate
 
10 more than eight renaissance zones within the State.
 
11         -7  Exemption from certain taxes.(a)  A person who is
 
12 located and operates within a renaissance zone shall be exempt
 
13 from up to one hundred per cent of the taxes due under chapters
 
14 235 and 237.
 
15      (b)  During the last three years that the taxpayer is
 
16 eligible for an exemption described in subsection (a), the
 
17 exemption shall be reduced by the following percentages:
 
18      (1)  For the tax year that is two years before the final
 
19           year of designation as a renaissance zone, the
 
20           percentage shall be twenty-five per cent;
 
21      (2)  For the tax year immediately preceding the final year
 
22           of designation as a renaissance zone, the percentage
 
23           shall be fifty per cent; and
 

 
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 1      (3)  For the tax year that is the final year of designation
 
 2           as a renaissance zone, the percentage shall be seventy-
 
 3           five per cent.
 
 4      (c)  Except as otherwise provided under subsection (a), the
 
 5 exemption in this section shall take effect for taxable years
 
 6 beginning after December 31, 1997.
 
 7         -8  Form of application.  The form of the application
 
 8 for a renaissance zone designation shall be as specified by the
 
 9 department of business, economic development, and tourism, which
 
10 may request any information from an applicant, in addition to
 
11 that contained in an application, as may be needed to permit the
 
12 department to discharge its responsibilities under this chapter.
 
13         -9  Public meetings; open records.(a)  The department
 
14 and the review board shall conduct all business at public
 
15 meetings held in compliance with chapters 91 and 92.
 
16      (b)  Any record or a portion of a record, material, or other
 
17 data received, prepared, used, or retained by the department or
 
18 review board shall be subject to chapter 92F.
 
19         -10  Liberal interpretation.  This chapter shall be
 
20 construed liberally to effectuate the legislative intent and the
 
21 purposes of this chapter, and as complete and independent
 
22 authority for the performance of each and every act and thing
 
23 authorized by this chapter, and all powers granted by this
 

 
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 1 chapter shall be broadly interpreted to effectuate the intent and
 
 2 purposes of this chapter and not as a limitation of powers.
 
 3         -11  Reports.  The department shall annually report to
 
 4 the legislature generally on the economic effects of this chapter
 
 5 in each renaissance zone."
 
 6      SECTION 3.  Chapter 235, Hawaii Revised Statutes, is amended
 
 7 by adding a new section to be appropriately designated and to
 
 8 read as follows:
 
 9      "235-     Renaissance zones; exemption from tax.  Any
 
10 person, as defined in section    -1, who is located and operates
 
11 within a renaissance zone as designated pursuant to chapter    
 
12 and who is otherwise subject to the tax imposed by this chapter,
 
13 shall be exempt from up to one hundred per cent of the tax
 
14 imposed by this chapter for the duration of the renaissance zone
 
15 as provided in section    -7."
 
16      SECTION 4.  Chapter 237, Hawaii Revised Statutes, is amended
 
17 by adding a new section to be appropriately designated and to
 
18 read as follows:
 
19      "237-     Renaissance zones; exemption from tax.  Any
 
20 person, as defined in section    -1, who is located and operates
 
21 within a renaissance zone as designated pursuant to chapter    
 
22 and who is otherwise subject to the tax imposed by this chapter,
 
23 shall be exempt from up to one hundred per cent of the tax
 

 
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 1 imposed by this chapter for the duration of the renaissance zone
 
 2 as provided in section    -7."
 
 3      SECTION 5.  New statutory material is underscored.
 
 4      SECTION 6.  This Act shall take effect on July 1, 1999.
 
 5 
 
 6                           INTRODUCED BY:  _______________________