Report Title:

Enterprise Zones

Description:

Removes provisions that restrict telecommunications from being designated a qualified business for enterprise zone purposes; effective date of February 29, 2010. (SD2)

HOUSE OF REPRESENTATIVES

H.B. NO.

2191

TWENTY-SECOND LEGISLATURE, 2004

H.D. 1

STATE OF HAWAII

S.D. 2


 

A BILL FOR AN ACT

 

relating to enterprise zones.

 

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

SECTION 1. The purpose of the state enterprise zones program is to "stimulate business and industrial growth in areas which would result in neighborhood revitalization" through regulatory flexibility and tax and other incentives. Attracting private sector investment in order to create, preserve, and increase jobs is critical to the growth of Hawaii's business community. The current state enterprise zones program, while admirable in its intent, does not meet the needs of newer industries interested in locating and investing in Hawaii.

The purpose of this Act is to add a new definition and provide for the delivery of certain communications access in one or more enterprise zones without regard to other provisions that restrict that delivery.

SECTION 2. Section 209E-2, Hawaii Revised Statutes, is amended by adding a new definition to be appropriately inserted and to read as follows:

""Broad band distributed network" means a statewide electronic distribution system that provides data and voice communications access to those located in one or more enterprise zones."

SECTION 3. Section 209E-9, Hawaii Revised Statutes, is amended to read as follows:

"209E-9 Eligibility; qualified business; sale of property or services. (a) Any business firm may be eligible to be designated a qualified business for purposes of this chapter if the business:

(1) Begins the operation of a trade or business within an enterprise zone;

(2) During each taxable year has at least fifty per cent of its enterprise zone establishment's gross receipts attributable to the active conduct of trade or business within the enterprise zone;

(3) Increases its average annual number of full-time employees by at least ten per cent by the end of its first tax year of participation; and

(4) During each subsequent taxable year at least maintains that higher level of employment.

(b) A business firm also may be eligible to be designated a qualified business for purposes of this chapter if the business:

(1) Is actively engaged in the conduct of a trade or business in an area immediately prior to an area being designated an enterprise zone;

(2) Meets the requirements of subsection (a)(2); and

(3) Increases its average annual number of full-time employees employed at the business' establishment or establishments located within the enterprise zone by at least ten per cent annually.

(c) After designation as an enterprise zone, each qualified business firm in the zone shall submit annually to the department an approved form supplied by the department that provides the information necessary for the department to determine if the business firm qualifies as a qualified business. The approved form shall be submitted by each business to the governing body of the county in which the enterprise zone is located, then forwarded to the department by the governing body of the county.

(d) The form referred to in subsection (c) shall be prima facie evidence of the eligibility of a business for the purposes of this section.

(e) Tangible personal property shall be sold at an establishment of a qualified business within an enterprise zone and the transfer of title to the buyer of the tangible personal property shall take place in the same enterprise zone in which the tangible personal property is sold. Services shall be sold at an establishment of a qualified business engaged in a service business within an enterprise zone and the services shall be delivered in the same enterprise zone in which sold. Any services rendered outside an enterprise zone shall not be deemed to be the services of a qualified business.

(f) For any fiscal year that includes September 11, 2001, a business may use its average annual number of full-time employees as of August 31, 2001--rather than its average annual number at the end of its fiscal year including September 11, 2001--if necessary to meet the requirements of subsection (a)(3) and (4) or (b)(3). A business may also use its average annual number of full-time employees at the end of its fiscal year that includes September 11, 2001, as its base number of full-time employees if necessary to meet the requirements of subsection (a)(3) and (4) or (b)(3) in future fiscal years.

(g) Services provided by a broad band distributed network may originate in one enterprise zone and be delivered in another without regard to any other provision of this section concerning service delivery."

SECTION 4. New statutory material is underscored.

SECTION 5. This Act shall take effect on February 29, 2010.