Report Title:
Renaissance Zones
Description:
Authorizes the designation of two renaissance zones in the State, subject to certain criteria. Establishes the renaissance zone review board. Exempts the developer of a renaissance zone from up to 100 percent of the person's income and general excise taxes. (HB146 HD2)
HOUSE OF REPRESENTATIVES |
H.B. NO. |
146 |
TWENTY-SECOND LEGISLATURE, 2003 |
H.D. 2 |
|
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:
SECTION 1. The legislature finds and declares that there is a continuing need for programs to encourage economic development in many rural areas in this State with high unemployment and other social problems related to the lack of economic opportunity. To achieve these purposes, it is necessary to create renaissance zones to provide temporary relief from certain taxes within the renaissance zones.
The legislature further finds that certain areas of the State warrant particular consideration in designating renaissance zones. The tax incentives derived from doing business in these zones will attract investors and thereby collaterally address the attending unemployment and social problems in the vicinity of the zones.
The legislature further finds that tax map key parcels 8-9-12-14 (parcel 14) and 8-9-12-9 (parcel 9) in the South Kona-Ka'u area are in desperate need of economic stimulation and should be designated renaissance zones. A visitor center and a growers' store are proposed for parcel 14. Proposed for parcel 9 is an activated carbon plant using macadamia nut shells to generate power to pump water for potable and agricultural uses. The carbon by-product could be sold for use in carbon filters.
The purpose of this Act is to authorize the designation of two renaissance zones in the State, subject to certain criteria.
SECTION 2. The Hawaii Revised Statutes is amended by adding a new chapter to be appropriately designated and to read as follows:
"CHAPTER
STATE RENAISSANCE ZONES
§ -1 Definitions. As used in this chapter:
"Department" means the department of business, economic development, and tourism.
"Developer" means any person, corporation, organization, partnership, association, or other legal entity that is responsible for proposing and executing a development plan in a renaissance zone. The term "developer" includes any person who makes contributions of money, real property, or personal property to propose and execute a development plan in a renaissance zone.
"Development plan" means a written plan that addresses the criteria provided in section -5 and that includes all of the following:
(1) A map of the proposed renaissance zone that indicates the geographic boundaries, the total area, and the present use and conditions of the land and structures within those boundaries;
(2) Evidence of community support and commitment from residential and commercial interests;
(3) A description of the methods proposed to increase economic opportunity and expansion, facilitate infrastructure improvement, and provide job training;
(4) Current social, economic, and demographic characteristics of the proposed renaissance zone and anticipated improvements in education, health, human services, public safety, and employment if the renaissance zone is created; and
(5) Any other information required by the department.
"Renaissance zone" means a geographic area designated by the governor under this chapter.
"Review board" means the renaissance zone review board created in section -3.
§ -2 Renaissance zones. Two renaissance zones may be designated in this State, subject to certain criteria set forth in section -5.
§ -3 Review board. (a) There is established the renaissance zone review board to be placed within the department for administrative purposes. Membership in the review board shall consist of:
(1) The director of finance, or the director's designee;
(2) The director of business, economic development, and tourism, or the director's designee; and
(3) The director of taxation, or the director's designee.
(b) The review board shall make recommendations to the governor for the designation of two renaissance zones that shall be selected on the basis of criteria set forth in section -5.
(c) The designation of a renaissance zone under this chapter shall take effect upon approval of the governor.
§ -4 Application; procedure. The application for the designation of a renaissance zone shall include:
(1) A development plan as defined in section -1; and
(2) The proposed duration of renaissance zone status, not to exceed fifteen years.
§ -5 Designation; criteria. The governor shall consider the following criteria in approving or denying any renaissance zone selected by the review board:
(1) Evidence of adverse economic and socioeconomic conditions within the proposed renaissance zone;
(2) The viability of the development plan;
(3) Whether the development plan is creative and innovative in comparison to other applications;
(4) Public and private commitment to, and other resources available for, the proposed renaissance zone;
(5) Demonstrated cooperation from surrounding areas; and
(6) Any other information required by the governor.
§ -6 Exemption from certain taxes. (a) The developer of a renaissance zone shall be exempt from up to one hundred per cent of the taxes from the income derived by the developer from the renaissance zone due under chapters 235 and 237.
(b) During the last three years that the taxpayer is eligible for an exemption described in subsection (a), the exemption shall be reduced by the following percentages:
(1) Twenty-five per cent for the tax year that is two years before the final year of designation as a renaissance zone;
(2) Fifty per cent for the tax year immediately preceding the final year of designation as a renaissance zone; and
(3) Seventy-five per cent for the tax year that is the final year of designation as a renaissance zone.
§ -7 Form of application. The form of the application for a renaissance zone designation shall be as specified by the department, which may request any information from an applicant, in addition to that contained in an application, as may be needed to permit the department to discharge its responsibilities under this chapter.
§ -8 Public meetings; open records. (a) The department and the review board shall conduct all business at public meetings, held in compliance with chapters 91 and 92.
(b) Any record or a portion of a record, material, or other data received, prepared, used, or retained by the department or review board shall be subject to chapter 92F.
§ -9 Liberal interpretation. This chapter shall be construed liberally to effectuate the legislative intent and the purposes of this chapter, and as complete and independent authority for the performance of each and every act and thing authorized by this chapter, and all powers granted by this chapter shall be broadly interpreted to effectuate the intent and purposes of this chapter and not as a limitation of powers."
SECTION 3. Chapter 235, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:
"§235- Renaissance zones; exemption from tax. (a) When the provisions of subsection (b) are met, the developer of a renaissance zone, as designated pursuant to chapter , who is otherwise subject to the tax imposed by this chapter, shall be exempt from up to per cent of the tax imposed by this chapter for the duration of the renaissance zone as provided in section -6."
(b) The renaissance zone income tax exemption may be claimed only upon a declaration by the governor. The governor shall issue a declaration allowing taxpayers to claim the income tax exemption when the general fund revenue collections at the close of each of two successive fiscal years exceed 7.5 per cent of the general fund revenues for each of the prior two fiscal years. The director of taxation shall notify the governor of the general fund revenue balance at the close of every year."
SECTION 4. Chapter 237, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:
"§237- Renaissance zones; exemption from tax. (a) When the provisions of subsection (b) are met, the developer of a renaissance zone, as designated pursuant to chapter , who is otherwise subject to the tax imposed by this chapter, shall be exempt from up to per cent of the tax imposed by this chapter for the duration of the renaissance zone as provided in section -6.
(b) The renaissance zone general excise tax exemption may be claimed only upon a declaration by the governor The governor shall issue a declaration allowing taxpayers to claim the excise tax exemption when the general fund revenue collections at the close of each of two successive fiscal years exceed 7.5 per cent of the general fund revenues for each of the two fiscal years. The director of taxation shall notify the governor of the general fund revenue balance at the close of every year."
SECTION 5. New statutory material is underscored.
SECTION 6. This Act, upon its approval, shall apply to taxable years beginning after December 31, 2002, and shall be repealed on January 1, 2007.