Report Title:

Enterprise Zones; Tier Two Zones; Established

Description:

Authorizes the governor to establish "Tier Two" enterprise zones. (SD1)

HOUSE OF REPRESENTATIVES

H.B. NO.

685

TWENTY-SECOND LEGISLATURE, 2003

H.D. 2

STATE OF HAWAII

S.D. 1


 

A BILL FOR AN ACT

 

relating to enterprise zoneS.

 

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

SECTION 1. The legislature finds that the recovery of the State's economy is incomplete and faces grave threats in the foreseeable future as the nation's economy faces uncertainty, the threat of terrorism and war with Iraq looms, and key visitor markets, including Japan, continue to languish. To stimulate economic recovery in the State, the legislature finds that it is both necessary and in the public interest to create additional "tier two" enterprise zones in areas which meet the following criteria:

(1) All tier two enterprise zones would be restricted to areas with commercial, industrial, or agricultural land use zoning;

(2) All or part of any census tracts included in tier two enterprise zones must have unemployment rates at least     times the State average unemployment rate, or      per cent of the families in each included tract must be below eighty per cent of the county median family income based on the 2000 census.

Qualified businesses in these areas would be eligible for the benefits of state tax and county incentives provided by chapter 209E, Hawaii Revised Statutes, for a temporary period of two years ending June 30, 2008. The definition of qualified service businesses for tier two enterprise zones include retail businesses, with the exception of food service.

SECTION 2. Section 209E-2, Hawaii Revised Statutes, is amended by amending the definition of "service business" to read as follows:

""Service business" means any corporation, partnership, or sole proprietorship that repairs ships, aircraft, or [assisted] assistive technology equipment, provides telecommunication services, information technology design and production services, medical and health care services, or education and training services as defined in this chapter. In areas designated as tier two enterprise zones as defined in section 209E-4(e), "service business" also means retail establishments other than food service establishments."

SECTION 3. Section 209E-4, Hawaii Revised Statutes, is amended to read as follows:

"§209E-4 Enterprise zone designation. (a) The governing body of any county may apply in writing to the department to have an area declared to be an enterprise zone. The application shall include a description of the location of the area or areas in question, and a general statement identifying proposed local incentives to complement the state and any federal incentives.

(b) The governor, upon the recommendation of the director, shall approve the designation of up to six areas in each county as enterprise zones for a period of twenty years. Any such area shall be located in one United States census tract or two or more contiguous United States census tracts in accordance with the most recent decennial United States Census. The census tract or tracts within which each enterprise zone is located also shall meet at least one of the following criteria:

(1) Twenty-five per cent or more of the population have incomes below eighty per cent of the median family income of the county; or

(2) The unemployment rate is 1.5 times the state average.

(c) Notwithstanding subsection (b), census tract #405 within the county of Kauai shall be eligible for designation as an enterprise zone. The eligibility for designation shall remain in effect until January 1, 1997, unless the governor earlier determines that the eligibility is no longer necessary.

(d) Notwithstanding subsection (b) or (c), only lands classified as agricultural in the Waialua district on Oahu, as defined in section 4-1(3)(D), shall be designated an enterprise zone on July 1, 1997, and the designation shall remain in effect until June 30, 2002.

(e) Notwithstanding subsection (b) or (c), each county may nominate up to six additional tier two enterprise zones for approval by the governor. The governor, upon the recommendation of the director, shall approve the designation of up to six areas in each county as tier two enterprise zones for a period ending June 30, 2008. Any such area shall be located in one United States census tract or two or more contiguous United States census tracts in accordance with the most recent decennial United States Census. The census tract or tracts within which each enterprise zone is located shall meet at least one of the following criteria:

(1)      per cent or more of the population have incomes below eighty per cent of the median family income of the county; or

(2) The unemployment rate is     times the state average.

(f) All qualified businesses as defined in section 209E-2 which are located in a tier two enterprise zone, shall be subject to the hiring requirements defined in section 209E-9(a)(3) and (4) even if the qualified business begins operations in an area included in a tier two enterprise zone before the area is so designated.

(g) All areas designated as tier two enterprise zones shall remain in effect until June 30, 2008, regardless of the date of their nomination by the county and date of their approval by the governor."

SECTION 4. Section 209E-5, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

"(a) The department shall review each application upon receipt and shall secure any additional information that the department deems necessary for the purpose of determining whether the area described in the application qualifies to be declared an enterprise zone[.] or a tier two enterprise zone as defined in section 209E-4(e)."

SECTION 5. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 6. This Act shall take effect on July 1, 2003.