H.B. NO.



















SECTION 1. Chapter 171, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"171-   Development of public lands in a redevelopment area. (a) Notwithstanding any provision of law to the contrary, a local redevelopment agency created pursuant to section 53-2, with the prior approval of the council of the applicable county, approval of the governor, and authorization of the legislature by concurrent resolution, may negotiate a development agreement with a developer for commercial, business, or hotel or resort uses on public lands within a redevelopment area according to a redevelopment plan adopted by the local redevelopment agency pursuant to chapter 53.

(b) The development agreement shall provide for the leasehold disposition of the land and shall:

(1) Describe the land subject to the development agreement, including the location, area, and size of the land;

(2) Specify the permitted use or uses for the land;

(3) Require that the permitted use or uses shall conform with all applicable state and county laws and ordinances;

(4) Include the start and completion dates of construction negotiated with the developer;

(5) Specify the on-site and off-site improvements involved with the development;

(6) Provide the lease commencement and termination dates and rent requirements of the land specified in the development agreement; and

(7) Include any other terms or conditions determined to be necessary by the local redevelopment agency."

SECTION 2. Chapter 237, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"237-   Redevelopment project. (a) This chapter shall not apply to amounts received from the construction of work or improvements of a redevelopment project.

(b) For the purposes of this section, "redevelopment project" shall have the same meaning as defined in section 53-1.

(c) For the purposes of this section, "construction of work or improvements of a redevelopment project" includes any costs of design, engineering, labor, and materials associated with the demolition and construction of a redevelopment project that is part of the redevelopment plan adopted by a local redevelopment agency pursuant to chapter 53."

SECTION 3. Section 238-1, Hawaii Revised Statutes, is amended by amending the definition of "use" to read as follows:

""Use" (and any nounal, verbal, adjectival, adverbial, and other equivalent form of the term) herein used interchangeably means any use, whether the use is of such nature as to cause the property, services, or contracting to be appreciably consumed or not, or the keeping of the property or services for such use or for sale, the exercise of any right or power over tangible or intangible personal property incident to the ownership of that property, and shall include control over tangible or intangible property by a seller who is licensed or who should be licensed under chapter 237, who directs the importation of the property into the State for sale and delivery to a purchaser in the State, liability and free on board (FOB) to the contrary notwithstanding, regardless of where title passes, but the term "use" shall not include:

(1) Temporary use of property, not of a perishable or quickly consumable nature, where the property is imported into the State for temporary use (not sale) therein by the person importing the same and is not intended to be, and is not, kept permanently in the State. For example, without limiting the generality of the foregoing language:

(A) In the case of a contractor importing permanent equipment for the performance of a construction contract, with intent to remove, and who does remove, the equipment out of the State upon completing the contract;

(B) In the case of moving picture films imported for use in theaters in the State with intent or under contract to transport the same out of the State after completion of such use; and

(C) In the case of a transient visitor importing an automobile or other belongings into the State to be used by the transient visitor while therein but which are to be used and are removed upon the transient visitor's departure from the State;

(2) Use by the taxpayer of property acquired by the taxpayer solely by way of gift;

(3) Use which is limited to the receipt of articles and the return thereof, to the person from whom acquired, immediately or within a reasonable time either after temporary trial or without trial;

(4) Use of goods imported into the State by the owner of a vessel or vessels engaged in interstate or foreign commerce and held for and used only as ship stores for the vessels;

(5) The use or keeping for use of household goods, personal effects, and private automobiles imported into the State for nonbusiness use by a person who:

(A) Acquired them in another state, territory, district, or country;

(B) At the time of the acquisition was a bona fide resident of another state, territory, district, or country;

(C) Acquired the property for use outside the State; and

(D) Made actual and substantial use thereof outside this State;

provided that as to an article acquired less than three months prior to the time of its importation into the State it shall be presumed, until and unless clearly proved to the contrary, that it was acquired for use in the State and that its use outside the State was not actual and substantial;

(6) The leasing or renting of any aircraft or the keeping of any aircraft solely for leasing or renting to lessees or renters using the aircraft for commercial transportation of passengers and goods or the acquisition or importation of any such aircraft or aircraft engines by any lessee or renter engaged in interstate air transportation. For purposes of this paragraph, "leasing" includes all forms of lease, regardless of whether the lease is an operating lease or financing lease. The definition of "interstate air transportation" is the same as in 49 U.S.C. 40102;

(7) The use of oceangoing vehicles for passenger or passenger and goods transportation from one point to another within the State as a public utility as defined in chapter 269;

(8) The use of material, parts, or tools imported or purchased by a person licensed under chapter 237 which are used for aircraft service and maintenance, or the construction of an aircraft service and maintenance facility as those terms are defined in section 237-24.9;

(9) The use of services or contracting imported for resale where the contracting or services are for resale, consumption, or use outside the State pursuant to section 237-29.53(a); [and]

(10) The use of property, services, or contracting imported by foreign diplomats and consular officials who are holding cards issued or authorized by the United States Department of State granting them an exemption from state taxes[.]; and

(11) The use of material, parts, or tools imported or purchased by a person licensed under chapter 237 which are used for the construction of work or improvements of a redevelopment project as defined in section 237-  .

With regard to purchases made and distributed under the authority of chapter 421, a cooperative association shall be deemed the user thereof."

SECTION 4. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 5. This Act shall take effect on July 1, 2019.








Report Title:

Urban Redevelopment; Public Lands; General Excise Tax; Use Tax



Authorizes a local redevelopment agency to contract with a developer for construction of non-residential projects on public land within a redevelopment area. Exempts the costs of construction of work or improvements of a redevelopment project from general excise and use taxes.




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