Enterprise Zones; Seawater Air Conditioning Cooling System
Allows the sale of cooling from seawater air conditioning district cooling systems to qualify for state enterprise zone benefits. (SD1)
TWENTY-FIFTH LEGISLATURE, 2009
STATE OF HAWAII
A BILL FOR AN ACT
RELATING TO SEAWATER AIR CONDITIONING.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
SECTION 1. The legislature finds that seawater air conditioning district cooling systems help to reduce our dependence on fossil fuels and help our economy. The twenty-five thousand ton seawater air conditioning district cooling system under development for downtown Honolulu can potentially reduce Oahu's dependence on imported oil by as much as one hundred seventy-four thousand barrels annually.
The downtown Honolulu seawater air conditioning project will generate millions of dollars in construction project spending. In addition, it will create a significant amount of long-term, gainful employment. Other local economic development benefits will accrue from money that stays in Hawaii and is not exported outside the State to purchase oil.
During the lifetime of this system, local spending would amount to more than $294,000,000. The calculated output based on this local spending is $456,000,000. This amount of local spending would also generate $149,000,000 in earnings and 3,516 full-time-equivalent person-years of jobs. This is equivalent to 133 full-time jobs for 26.5 years.
Furthermore, this project will actually generate additional revenues for the State during the next three years, and over its more than twenty-five year life. The downtown Honolulu seawater air conditioning project is a new project which will generate an estimated $8,252,000 in additional tax revenue during the period from 2009 to 2011. During this same period, this project will be eligible for $5,116,000 in enterprise zone benefits. Therefore, the net fiscal benefit to the State during this period will be $3,135,000. If this project is not completed, there will be a net revenue loss to the State of $3,135,000. During its lifetime, the system would generate $24,000,000 in new state taxes.
The purpose of this Act is to assist seawater air conditioning district cooling systems by allowing the systems to benefit from the State's enterprise zone program.
SECTION 2. Section 209E-2, Hawaii Revised Statutes, is amended by amending the definition of "qualified business" to read as follows:
""Qualified business" means any corporation, partnership, or sole proprietorship authorized to do business in the State that is qualified under section 209E-9, subject to the state corporate or individual income tax under chapter 235, and is:
(1) Engaged in manufacturing, the wholesale sale of tangible personal property as defined in section 237‑4, or a service business as defined in this chapter;
(2) Engaged in producing agricultural products where the business is a producer as defined in section 237-5, or engaged in processing agricultural products, all or some of which were grown within an enterprise zone;
(3) Engaged in research, development, sale, or
production of all types of genetically-engineered medical, agricultural, or
maritime biotechnology products; [
(4) Engaged in producing electric power from wind
energy for sale primarily to a public utility company for resale to the public[
(5) Engaged in producing air conditioning from a seawater air conditioning district cooling system."
SECTION 3. Section 209E-11, Hawaii Revised Statutes, is amended to read as follows:
"§209E-11 State general
excise exemptions. The department shall certify annually to the department
of taxation that any qualified business is exempt from the payment of general
excise taxes on the gross proceeds from the manufacture of tangible personal
property, the wholesale sale of tangible personal property, the engaging in a
service business by a qualified business, [
or] the engaging in research,
development, sale, or production of all types of genetically-engineered
medical, agricultural, or maritime biotechnology products[ ;], or the
production of air conditioning from a seawater air conditioning district
cooling system; provided that agricultural businesses other than
those engaged in the production of genetically-engineered agricultural products
shall not be exempt from the payment of general excise taxes on the gross
proceeds of agricultural retail sales. The gross proceeds received by a
contractor licensed under chapter 444 shall be exempt from the general excise
tax for construction within an enterprise zone performed for a qualified
business within an enterprise zone. The exemption shall extend for a period
not to exceed seven years; provided that if a force majeure event occurs, then
the period of time shall be tolled until the force majeure event ceases."
SECTION 4. Statutory material to be repealed is bracketed
and stricken. New statutory material is underscored.
SECTION 5. This Act shall take effect upon its approval.