H.B. NO.



H.D. 1
















     SECTION 1.  Ship repair and boat construction are critical maritime industries in the State.  Ship repair capability ensures the safe and timely operation of ships and barges supplying the State.  Without this capability, many ships are required to travel to the mainland for dry docking and repair, which reduces revenues for the State.  The ship repair industry provides the State with well-paying industrial and technical job opportunities in critical industrial services, including the repair of engines and generators, welding and metal fabrication, ventilation and air conditioning, and critical servicing of oil product transfer buoys.  However, ship repair companies in Hawaii have a significant competitive cost disadvantage with mainland and foreign ship repair entities because of higher labor and material shipping costs.  Sustaining and supporting a strong maritime repair industry are critical to the quality of life, prosperity, and security of the State.

     Hawaii's boatbuilding and ship repair industries consist of establishments that are primarily engaged in operating small shipyards, which are fixed facilities with dry docks and boat fabrication facilities and equipment.  Shipyard activities include ship construction; repair; conversion and alteration; production of prefabricated ships, boats, and barge sections; and other specialized maritime-related services.  Hawaii's boatbuilding and ship repair industries use local manufacturing and other trades outside the shipyard, providing vital jobs that are economically beneficial to Hawaii.

     The purpose of this Act is to enhance maritime productivity and workforce development by establishing a maritime industry grant program.

     SECTION 2.  The Hawaii Revised Statutes is amended by adding a new chapter to title 13 to be appropriately designated and to read as follows:


Maritime Industry grant program

     §   -1  Definitions.  As used in this chapter:

     "Department" means the department of business, economic development, and tourism.

     "Qualified shipyard" means a shipyard facility engaged in shipyard activities located in a county with a population of seven hundred thousand or greater comprising not more than one thousand employees.

     §   -2  Maritime industry grant program; established.  There is established within the department a maritime industry grant program to be developed and administered by the department and under which the department shall award grants to qualified shipyards.  The department shall accept applications for grants on forms prescribed and prepared by the department.  The department of transportation shall assist the department with the maritime industry grant program.

     §   -3  Eligibility for grants.  (a)  The department shall award grants for the maritime industry grant program only to qualified shipyards that:

     (1)  Have applied for or received all applicable licenses or permits;

     (2)  Comply with all applicable federal, state, and local laws, rules, ordinances, and policies;

     (3)  Agree not to use state funds for entertainment or lobbying activities;

     (4)  Allow the department, legislative committees and their staff, and the auditor full access to grantee records, files, and other related documents and information for purposes of monitoring, measuring the effectiveness of, and ensuring the proper expenditure of the grant; and

     (5)  Are incorporated under the laws of the State.

No grant shall be awarded to a qualified shipyard that has been in operation for less than ten years.

     (b)  Projects eligible to receive grants from the maritime industry grant program may include:

     (1)  Capital improvement projects to foster efficiency, competitive operations, and quality boat construction, repair, and reconfiguration by qualified shipyards; and

     (2)  Workforce development and training projects to improve employee skills in the maritime industry.

     (c)  Grants may also be awarded by the department for the purchase of machinery and equipment; provided that the machinery and equipment are used in boat repair, construction, or boat reconfiguration.

     (d)  A grant shall not exceed $         in any year, and a qualified shipyard shall be awarded only one grant in any given year.

     §   -4  Reports.  The department shall submit a report to the legislature no later than twenty days prior to the convening of each regular session held in an even-numbered year, starting with the first report to be submitted prior to the regular session of 2018.  The report shall include:

     (1)  The total number of grant applications received;

     (2)  The total number of grants awarded;

     (3)  The actual economic and workforce development benefits realized from the awarding of each grant;

     (4)  The total amount of money awarded for each grant; and

     (5)  Any other information about the maritime industry grant program the department deems necessary.

     §   -5  Rules.  The department shall adopt rules, pursuant to chapter 91, to implement this chapter.

     §   -6  Exemption from chapters 42F, 103D, and 103F.  Chapters 42F, 103D, and 103F shall not apply to the grants made pursuant to this chapter.  All grants shall be made in accordance with standards and conditions specified in section    -3.

     §   -7  Maritime industry grant program appropriations.  Moneys appropriated for the maritime industry grant program may be used to pay for the cost of administering, operating, and marketing the grant program, as determined by the director of business, economic development, and tourism."

     SECTION 3.  There is appropriated out of the general revenues of the State of Hawaii the sum of $         or so much thereof as may be necessary for fiscal year 2017-2018 and the same sum or so much thereof as may be necessary for fiscal year 2018-2019 for the establishment and administration of the maritime industry grant program.

     The sums appropriated shall be expended by the department of business, economic development, and tourism for the purposes of this Act.

     SECTION 4.  This Act shall take effect on July 1, 2038.



Report Title:

Workforce Development; Maritime Industry Grant Program



Establishes within the Department of Business, Economic Development, and Tourism the Maritime Industry Grant Program to enhance maritime productivity and workforce development.  (HB594 HD1)




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