Report Title:

Kalaeloa; Law Enforcement, Emergency Medical Services, and Public Safety Training Facilities; Tax Credit

Description:

Provides a tax credit of up to $5,000,000 per taxable year, up to an aggregate total of $25,000,000, for a taxpayer that incurs qualified costs in the development of law enforcement, emergency medical services, and public safety training facilities at Kalaeloa. (SD1)

THE SENATE

S.B. NO.

235

TWENTY-SECOND LEGISLATURE, 2003

S.D. 1

STATE OF HAWAII

 


 

A BILL FOR AN ACT

 

relating to Government.

 

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

Section 1. Chapter 235, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"§235- Law enforcement, emergency medical services, and public safety training facilities tax credit; Kalaeloa. (a) There shall be allowed to each qualified taxpayer a tax credit for qualified costs incurred in the development of law enforcement, emergency medical services, and public safety training facilities on state land at Kalaeloa, Oahu. The tax credit shall be deductible from the taxpayer’s net income tax liability, if any, imposed by this chapter and at the election of the taxpayer from the tax liability imposed by chapter 237, 237D, 238, 239, 241, and 431.

(b) The tax credit earned shall be equal to the qualified costs incurred in the taxable year for any one or more years in the five consecutive taxable years beginning with the tax year of the date of enactment of this section, up to a maximum of $25,000,000 of credits in the aggregate for all qualified taxpayers for all five years; provided that notwithstanding the amount of tax credit earned in any year, a maximum of $5,000,000 of tax credit in the aggregate for all qualified taxpayers may be utilized in any one year. The credits over $5,000,000 shall be used as provided in subsection (d).

(c) To qualify for the tax credit, a taxpayer shall:

(1) Have expended qualified costs on and be developing law enforcement, emergency medical services, and public safety training facilities on state land at Kalaeloa and associated operational programs utilizing live, virtual, simulated, test or training exercises designed to address the special needs of the people of the State of Hawaii when responding to emergency situations or matters of public safety; and

(2) Allow use of the facilities by the State and counties for the training of state and county law enforcement, emergency medical services, and public safety personnel.

(d) If the tax credit under this section exceeds $5,000,000 in the aggregate for all qualified taxpayers for any taxable year or exceeds the taxpayer's income tax liability and the tax liability under chapter 237, 237D, 238, 239, 241, and 431, for any year for which the tax credit is taken, the excess of the tax credit may be used as a credit against the taxpayer’s tax liability for the taxes set forth in this section in subsequent years until exhausted.

(e) Every claim, including amended claims, for a tax credit under this section shall be filed on or before the end of the twelfth month following the close of the taxable year for which the credit may be claimed. Failure to comply with the foregoing provision shall constitute a waiver of the right to claim the credit.

(f) If at any time during the five-year period in which tax credits are earned under this section, the costs incurred no longer meet the definition of qualified costs, the credit claimed under this section shall be recaptured. The recapture shall be equal to one hundred per cent of the total tax credit claimed under this section for the preceding taxable year; provided the amount of the credit recaptured shall apply only to those costs that no longer meet the definition of qualified costs. The amount of the recaptured tax credit determined under this subsection shall be added to the taxpayer’s tax liability for the taxable year in which the recapture occurs under this subsection.

(g) This section shall apply to qualified costs incurred after the date of enactment, and the four subsequent taxable years, provided that a taxpayer may continue to claim the credits provided in this section if the qualified cost is incurred before the conclusion of this five-year period.

(h) No taxpayer that claims a credit under this section shall claim any other credit for the same qualified costs under any chapter identified in this section.

(i) The director of taxation shall prepare any forms that may be necessary to claim a credit under this section. The director may also require the taxpayer to furnish information to ascertain the validity of the claims for credit made under this section and may adopt rules necessary to effectuate the purposes of this section.

The qualified taxpayer, no later than March 31 of the year after the qualified costs were expended, shall submit a written, certified statement to the director of taxation, in the form specified by the director of taxation identifying:

(1) The qualified costs, if any, expended in the previous taxable year;

(2) The amount of tax credit claimed pursuant to this section, if any, in the previous taxable year; and

(3) The tax liability under this chapter and chapter 237, 237D, 238, 239, 241, and 431, against which the tax credit is claimed.

(j) As used in this section:

"Kalaeloa, Oahu" means the area designated as the Kalaeloa community development district established under section 206G-6.

"Qualified costs" means any costs for plans, design, construction, equipment, and operations up to a total of $25,000,000 in the aggregate, incurred after the date of enactment of this section for law enforcement, emergency medical services, and public safety training facilities on state land at Kalaeloa and associated operational training programs designed to address the special needs of the people of the State of Hawaii when responding to emergency situations or matters of public safety, provided the qualified costs are used to construct facilities to house and to acquire products and training programs approved by the United States Army’s Program Executive Office – Simulation, Training, and Instrumentation, formerly known as STRICOM, ("PEO-STRI"), including the following PEO-STRI-approved programs:

(1) The Engagement Skill Trainer (EST 2000) for small weapons training;

(2) Virtual Emergency Response Training System (VERTS) for responding to hazardous materials emergencies; and

(3) Mobile Military Operations on Urban Terrain (Mobile MOUT) for security training.

"Qualified taxpayer" means a person who fulfills the requirements of subsection (c)."

SECTION 2. Section 235-2.45, Hawaii Revised Statutes, is amended by amending subsection (e) to read as follows:

"(e) Section 704 of the Internal Revenue Code (with respect to a partner's distributive share) shall be operative for purposes of this chapter; except that section 704(b)(2) shall not apply to:

(1) Allocations of the high technology business investment tax credit allowed by section 235-110.9; [or]

(2) Allocations of net operating loss pursuant to section 235-111.5[.]; or

(3) Allocations of the law enforcement, emergency medical services, and public safety training facilities tax credit allowed by section 235- ."

SECTION 3. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 4. This Act shall take effect on July 1, 2003.