Bill Text: HI SB1408 | 2012 | Regular Session | Introduced
Bill Title: Renewable Energy Enterprise Zones; Pilot Project in Kalaeloa
Spectrum: Partisan Bill (Democrat 2-0)
Status: (Introduced - Dead) 2011-12-01 - Carried over to 2012 Regular Session. [SB1408 Detail]
Download: Hawaii-2012-SB1408-Introduced.html
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THE SENATE |
S.B. NO. |
1408 |
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TWENTY-SIXTH LEGISLATURE, 2011 |
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STATE OF HAWAII |
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A BILL FOR AN ACT
relating to renewable energy enterprise zones.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
SECTION 1. The legislature finds that Hawaii is dependent on imported oil for more than ninety-two per cent of its energy needs, making it the most vulnerable state in the nation to economic disruption in the event of upheavals in the world oil market, while Hawaii’s residents and businesses are burdened with the highest fuel costs in the nation.
Hawaii law already requires the establishment of policies designed to increase energy self-sufficiency and energy security, including the use of renewable resources. Hawaii is blessed with an abundance of renewable energy resources, including wind, solar, hydropower, geothermal, and ocean technologies such as wave energy and thermal energy conversion. Act 272, Session Laws of Hawaii 2001, recognized "the economic, environmental, and fuel diversity benefits of renewable energy resources" and the need to "encourage the establishment of a market for renewable energy in Hawaii using the State's renewable energy resources...." Act 272 further noted that "while Hawaii is a national leader in the development of renewable energy resources for electricity production, there may be more that the State can do to encourage the development and implementation of renewable energy."
The legislature further finds that the establishment of renewable energy enterprise zones in the State that provide a range of county and state incentives will not only work towards reducing our dependence on imported fossil fuels, but will assist in stimulating the creation of integrated campuses that will attract a critical nucleus of renewable energy facilities and create a large number of highly skilled jobs in the renewable energy field.
The purpose of this Act is to encourage the establishment of modern renewable energy facilities within the State by establishing a renewable energy enterprise zone program that initially consists of a single pilot renewable energy enterprise zone in Kalaeloa. Limiting potential investments in a renewable energy enterprise zone to Kalaeloa will minimize the impact on the State and allow the State to evaluate the zone's impact without negatively affecting income streams.
SECTION 2. The Hawaii Revised Statutes is amended by adding a new chapter to be appropriately designated and to read as follows:
"CHAPTER
RENEWABLE ENERGY ENTERPRISE ZONES
§ -1 Definitions. As used in this chapter:
"Department" means the department of business, economic development, and tourism.
"Establishment" means a single physical location where renewable energy or research and development services are provided in a renewable energy facility. A qualified business may include one or more establishments, any number of which may be in a renewable energy enterprise zone.
"Full-time employee" means any employee for whom the employer is legally required to provide employee fringe benefits.
"Renewable energy enterprise zone" means any area in the State declared by the department to be eligible for benefits pursuant to this chapter.
"Renewable energy facility" means a facility engaged in the production, generation, or research and development of energy technologies using the following sources:
(1) Wind;
(2) The sun;
(3) Falling water;
(4) Biogas, including landfill and sewage-based digester gas;
(5) Geothermal;
(6) Ocean water, currents, and waves, including ocean thermal energy conversion;
(7) Biomass, including biomass crops, agricultural and animal residues and wastes, and municipal solid waste and other solid waste;
(8) Biofuels; and
(9) Hydrogen produced from renewable energy sources.
"Qualified business" means any renewable energy facility that is:
(1) Authorized to do business in this State; and
(2) Is located within the renewable energy enterprise zone.
"Taxes due the State" means income taxes due under chapter 235.
§ -2 Administration. The department shall administer this chapter and have the power and duty to:
(1) Monitor the implementation and operation of this chapter;
(2) Conduct a continuing evaluation program of the renewable energy enterprise zones;
(3) Assist the counties in obtaining the reduction of rules within renewable energy enterprise zones;
(4) Submit annual reports to the legislature and the governor evaluating the effectiveness of the program and proposing any recommended legislation;
(5) Administer and enforce rules adopted by the department; and
(6) Administer this chapter in a manner such that the areas designated as renewable energy enterprise zones will provide the most benefit to the areas and the State.
§ -3 Renewable energy enterprise zone designation; approval. (a) Within thirty days of receiving:
(1) A description of a proposed location in a county for a renewable energy enterprise zone; and
(2) A general statement identifying proposed county incentives to complement any state and federal incentives;
from the governing body of the county, the department shall designate the proposed area as a renewable energy enterprise zone.
(b) The department shall acquire from the county any additional information that the department deems necessary, and, within sixty days of the date of designation pursuant to subsection (a), the department shall approve the establishment of the renewable energy enterprise zone for a period of seven years.
§ -4 Duplicative tax incentives; prohibition. There shall be no duplication of existing state tax incentives to qualified businesses that locate in a renewable energy enterprise zone.
§ -5 Rules. (a) The department, in consultation with the department of taxation, shall adopt rules pursuant to chapter 91 to implement this chapter, including rules relating to health, safety, building, planning, zoning, and land use. Rules adopted pursuant to this section shall supersede all other inconsistent ordinances and rules relating to the use, zoning, planning, and development of land and construction in a renewable energy enterprise zone; provided that rules adopted pursuant to this section shall conform to existing law, rules, and ordinances as closely as possible to comply with minimum standards for energy efficiency, health, and safety.
(b) The department may provide by rule that lands within a renewable energy enterprise zone shall not be developed beyond existing uses or that improvements thereon shall not be demolished or substantially reconstructed or provide other restrictions on the use of the zone.
§ -6 Eligibility; qualified business; sale of property or services. (a) Any renewable energy facility may be eligible to be designated a qualified business for purposes of this chapter if:
(1) The renewable energy facility begins operations in a renewable energy enterprise zone and:
(A) During each taxable year has at least per cent of its renewable energy enterprise zone establishment's gross receipts attributable to its operation within the renewable energy enterprise zone;
(B) Increases its average annual number of full-time employees employed at the facility by at least per cent by the end of its first tax year of participation; and
(C) During each subsequent taxable year maintains the level of employment in paragraph (1)(B) or greater for full-time employees; or
(2) The renewable energy facility:
(A) Is actively engaged in the operation of a renewable energy facility in an area immediately prior to the area being designated a renewable energy enterprise zone;
(B) Meets the requirements of paragraph (1)(B); and
(C) Increases its average annual number of full-time employees employed at the renewable energy facility's establishment or establishments located within the renewable energy enterprise zone by at least per cent annually.
(b) After approval of the renewable energy enterprise zone, each qualified business in the renewable energy enterprise zone shall annually complete and submit to the department, on an application prescribed by the department, the information necessary for the department to determine whether the renewable energy facility qualifies or continues to qualify as a qualified business. If the department determines that the renewable energy facility qualifies as a qualified business, the department shall approve the application and notify the department of taxation and the relevant governing body of the county.
(c) A completed form approved by the department, referred to in subsection (b), shall be prima facie evidence of the eligibility of a renewable energy facility for the purposes of this section.
(d) Any operations or services provided by a renewable energy facility outside of the renewable energy enterprise zone shall not be included for the purposes of determining gross receipts attributable to the active provision of services under subsection (a).
§ -7 State business tax credit. (a) The department shall certify annually to the department of taxation the applicability of the tax credit provided in this section for a qualified business against any income taxes imposed under chapter 235. The credit shall be:
(1) Eighty per cent of the tax due for the first taxable year that the business qualifies as a qualified business;
(2) Seventy per cent of the tax due for the second taxable year that the business qualifies as a qualified business;
(3) Sixty per cent of the tax due in the third taxable year that the business qualifies as a qualified business;
(4) Fifty per cent of the tax due in the fourth taxable year that the business qualifies as a qualified business;
(5) Forty per cent of the tax due in the fifth taxable year that the business qualifies as a qualified business;
(6) Thirty per cent of the tax due in the sixth taxable year that the business qualifies as a qualified business; and
(7) Twenty per cent of the tax due in the seventh year that the business qualifies as a qualified business.
Any tax credit not used in a taxable year shall not be applied to future taxable years.
(b) When a partnership is eligible for a tax credit under this section, each partner shall be eligible for the tax credit in proportion to that partner's income tax liability from the partnership. Any qualified business earning taxable income from the provision of the qualified business's services, both within and without the renewable energy enterprise zone, shall allocate and apportion its taxable income attributable to that provision of services. Tax credits provided for in this section shall only apply to taxable income of a qualified business attributable to the services provided within the renewable energy enterprise zone.
(c) In addition to any other tax credit authorized under this section, a qualified business shall be entitled to a tax credit against any taxes due the State in an amount equal to a percentage of unemployment taxes paid pursuant to chapter 383. The amount of the credit shall be equal to:
(1) Eighty per cent of the unemployment taxes paid for during the first taxable year that the business qualifies as a qualified business;
(2) Seventy per cent of the unemployment taxes paid for the second year that the business qualifies as a qualified business;
(3) Sixty per cent of the unemployment taxes paid for the third year that the business qualifies as a qualified business;
(4) Fifty per cent of the unemployment taxes paid for the fourth year that the business qualifies as a qualified business;
(5) Forty per cent of the unemployment taxes paid for the fifth year that the business qualifies as a qualified business;
(6) Thirty per cent of the unemployment taxes paid for the sixth year that the business qualifies as a qualified business; and
(7) Twenty per cent of the unemployment taxes paid for the seventh year that the business qualifies as a qualified business.
(d) Tax credits provided for in subsection (c) shall apply only to the unemployment tax paid on employees employed at the qualified business's establishment or establishments located within the renewable energy enterprise zone. Any tax credit not used in a taxable year shall not be applied to future tax years.
§ -8 State general excise and use tax exemptions. The department shall certify annually to the department of taxation that any qualified business is exempt from the payment of taxes pursuant to chapter 237 on the gross proceeds from the provision of renewable energy services and taxes pursuant to chapter 238 for purchases by the qualified business. The gross proceeds received by a contractor licensed under chapter 444 shall be exempt from taxation under chapter 237 for construction within a renewable energy enterprise zone performed for a qualified business within a renewable energy enterprise zone. The exemption in this section shall extend for a period not to exceed seven years after the effective date of this chapter.
§ -9 Local incentives. (a) A county may propose local incentives, including:
(1) Reduction of permit fees;
(2) Reduction of user fees; and
(3) Reduction of real property taxes.
(b) A county may propose measures for regulatory flexibility including:
(1) Special zoning districts;
(2) Permit process reform;
(3) Exemptions from local ordinances; and
(4) Other public incentives proposed in the locality's application, which shall be binding upon the locality upon designation of the renewable energy enterprise zone.
§ -10 Termination of renewable energy enterprise zone. Upon designation of the area as a renewable energy enterprise zone, the proposals for regulatory flexibility, tax incentives, and other public incentives specified in this chapter shall be binding upon the governing body of the county for a period of seven years. If the governing body of the county is unable or unwilling to provide any of the incentives set forth in section ‑9 or other incentives acceptable to the department, and the department has not adopted rules pursuant to section ‑5 that supersede inconsistent ordinances and rules relating to the use, zoning, planning, and development of land and construction in a renewable energy enterprise zone, then the renewable energy enterprise zone shall terminate. Qualified businesses located in the renewable energy enterprise zone shall be eligible to receive the tax incentives provided by this chapter even though the zone designation has terminated. No renewable energy facility may become a qualified business after the date of zone termination."
SECTION 3. The governing body of the city and county of Honolulu, pursuant to this Act, shall transmit to the director of business, economic development, and tourism, no later than November 30, 2011, a description of a proposed location in Kalaeloa as a pilot renewable energy enterprise zone. The director of business, economic development, and tourism, pursuant to this Act, shall designate the proposed area as a renewable energy enterprise zone for a period of seven years.
SECTION 4. The department of business, economic development, and tourism, in consultation with the department of taxation, shall submit a written report to the legislature by December 31 of each year, beginning in 2012, regarding the implementation of the pilot renewable energy enterprise zone in Kalaeloa, including an evaluation of the success or failure of the pilot renewable energy enterprise zone to fulfill its intended purpose.
SECTION 5. It is the intent of this Act not to jeopardize the receipt of any federal aid nor to impair the obligation of the State or any agency thereof to the holders of any bond issued by the State or by any agency, and to the extent, and only to the extent, necessary to effectuate this intent, the governor may modify the strict provisions of this Act, but shall promptly report any modification with reasons therefore to the legislature at its next regular session thereafter for review by the legislature.
SECTION 6. This Act does not affect rights and duties that matured, penalties that were incurred, and proceedings that were begun before its effective date.
SECTION 7. If any provision of this Act, or the application thereof to any person or circumstance is held invalid, the invalidity does not affect other provisions or applications of the Act, which can be given effect without the invalid provision or application, and to this end the provisions of this Act are severable.
SECTION 8. This Act shall take effect upon its approval; provided that this Act shall apply to taxable years beginning after December 31, 2010, and shall be repealed on January 1, 2018.
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INTRODUCED BY: |
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Report Title:
Renewable Energy Enterprise Zones; Pilot Project in Kalaeloa
Description:
Establishes renewable energy enterprise zones in the State to encourage the development of renewable energy technologies. Creates a 7-year pilot renewable energy enterprise zone in Kalaeloa.
The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.
