Bill Text: HI HB1966 | 2020 | Regular Session | Introduced

Hawaii House Bill 1966 (Prior Session Legislation)

HI State Legislature page for HB1966

Introduced

Bill Title: Relating To Business Development At Barbers Point.

Spectrum: Partisan Bill (Republican 1-0)

Status: (Introduced - Dead) 2020-02-05 - The committee(s) on EDB recommend(s) that the measure be deferred. [HB1966 Detail]

Download: Hawaii-2020-HB1966-Introduced.html

HOUSE OF REPRESENTATIVES	H.B. NO.	1966
THIRTIETH LEGISLATURE, 2020
STATE OF HAWAII

A BILL FOR AN ACT

relating to Business Development at barbers point.

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

SECTION 1. The legislature finds the federal Tax Cuts and Job Act authorized a community economic development program called the Opportunity Zones Program to encourage long-term investments in economically distressed communities nationwide.

The legislature also finds the program provides for incentives for investors to re-invest unrealized capital gains into "opportunity funds" established by the private sector in exchange for temporary tax deferral and other tax benefits.

Hawaii has nominated, and the United States Department of Treasury has already designated, twenty-five census tracts as opportunity zones. One of these is the Kalaeloa district. The former Naval Air Station at Barbers Point is in the Kalaeloa district. Barbers Point was decommissioned by the navy in 1998 and turned over to the State of Hawaii.

The legislature further finds Barbers Point has the potential for business development but needs upgrades to its infrastructure, especially its electrical system, as the area presently utilizes its own electrical grid. The need for these costly upgrades at Barber's Point has hindered development.

The purpose of this act is to incentivize investments in the area for business development and housing and to incentivize businesses or owner occupants who invest in electrical and water upgrades at Barbers Point.

SECTION 2. Chapter 237 SECTION 23, Hawaii Revised Statutes, is amended to read as follows:

"§237-23 Exemptions, persons exempt, applications for exemption. (a) This chapter shall not apply to the following persons:

(1) Public service companies as that term is defined in section 239-2, with respect to the gross income, either actual gross income or gross income estimated and adjusted, that is included in the measure of the tax imposed by chapter 239;

(2) Public utilities owned and operated by the State or any county, or other political subdivision thereof;

(3) Fraternal benefit societies, orders, or associations, operating under the lodge system, or for the exclusive benefit of the members of the fraternity itself, operating under the lodge system, and providing for the payment of death, sick, accident, a legal service plan, or other benefits to the members of the societies, orders, or associations, and to their dependents;

(4) Corporations, associations, trusts, or societies organized and operated exclusively for religious, charitable, scientific, or educational purposes, as well as that of operating senior citizens housing facilities qualifying for a loan under the laws of the United States as authorized by section 202 of the Housing Act of 1959, as amended, as well as that of operating a legal service plan, as well as that of operating or managing a homeless facility, or any other program for the homeless authorized under part XVII of chapter 346;

(5) Business leagues, chambers of commerce, boards of trade, civic leagues, agricultural and horticultural organizations, and organizations operated exclusively for the benefit of the community and for the promotion of social welfare that shall include the operation of a legal service plan, and from which no profit inures to the benefit of any private stockholder or individual;

(6) Hospitals, infirmaries, and sanitaria;

(7) Companies that provide potable water to residential communities that lack any access to public utility water services and are tax exempt under section 501(c)(12) of the Internal Revenue Code of 1986, as amended;

(8) Cooperative associations incorporated under chapter 421 or Code section 521 cooperatives which fully meet the requirements of section 421-23, except Code section 521 cooperatives need not be organized in Hawaii; provided that:

(A) The exemption shall apply only to the gross income derived from activities that are pursuant to purposes and powers authorized by chapter 421, except those provisions pertaining to or requiring corporate organization in Hawaii do not apply to Code section 521 cooperatives;

(B) The exemption shall not relieve any person who receives any proceeds of sale from the association of the duty of returning and paying the tax on the total gross proceeds of the sales on account of which the payment was made, in the same amount and at the same rate as would apply thereto had the sales been made directly by the person, and all those persons shall be so taxable; and

(C) As used in this paragraph, "Code section 521 cooperatives" mean associations that qualify as a cooperative under section 521 (with respect to exemption of farmers' cooperatives from tax) of the Internal Revenue Code of 1986, as amended;

(9) Persons affected with Hansen's disease and kokuas, with respect to business within the county of Kalawao;

(10) Corporations, companies, associations, or trusts organized for the establishment and conduct of cemeteries no part of the net earnings of which inures to the financial benefit of any private stockholder or individual; provided that the exemption shall apply only to the activities of those persons in the conduct of cemeteries and shall not apply to any activity the primary purpose of which is to produce income, even though the income is to be used for or in the furtherance of the exempt activities of those persons; and

(11) Nonprofit shippers associations operating under part 296 of the Civil Aeronautics Board Economic Regulations.

(12) Businesses investing over $500,000 over a ten-year period and creating a minimum of fifty job positions for the purpose of business development at Barbers Point, located in the opportunity zone of Kalaeloa District.

SECTION 3. Section 235, Hawaii Revised Statutes, is amended by adding a new section to part VI to be appropriately designated and to read as follows:

"§235- Barbers Point Upgrade Tax Credit. (a) There shall be allowed to each qualified taxpayer subject to the tax imposed under this chapter, an income tax credit for upgrading the electrical and/or water systems at Barbers Point in the Kalaeloa opportunity zone that shall be deductible from the taxpayer's net income tax liability, if any, imposed by this chapter for the taxable year in which the credit is properly claimed.

(1) The amount of the tax credit shall be equal to the qualified expenses of the qualified taxpayer, up to a maximum of $50,000 per taxable year.

(2) In the case of a partnership, S corporation, estate, or trust, the tax credit allowable is for qualified expenses incurred by the entity for the taxable year. The expenses upon which the tax credit is computed shall be determined by rule.

(3) Claims for the tax credit under this section, including any amended claims thereof, shall be filed on or before the end of the twelfth month following the taxable year for which the credit may be claimed.

(b) The department of business and economic development in cooperation with the department of taxation shall adopt rules pursuant to chapter 91 establishing criteria for the qualified expenses and businesses developed for which the tax credit is sought under this chapter.

(c) The department of business and economic development shall maintain records of the names and addresses of the qualified taxpayers claiming the credits under this section and the total amount of qualified expenses upon which the tax credits are based.

SECTION 4. New statutory material is underscored.

SECTION 5. This Act, upon its approval, shall take effect for taxable years beginning after December 31, 2020.

INTRODUCED BY:	_____________________________

Report Title:

General Excise Tax Exemption; Tax Credit; Businesses Development; Barbers Point

Description:

Promote and incentivize business development within the Kalaeloa Opportunity Zone; authorizes GET exemption; provides tax credit for upgrading infrastructure.

The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.