REPORT TITLE:
Barbers Point Redevelopment


DESCRIPTION:
Directs the Barbers Point Naval Air Station (BPNAS) redevelopment
commission to identify lands in Barber's Point for use as a high
technology park.  (HB1332 HD1)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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HOUSE OF REPRESENTATIVES                H.B. NO.           H.D. 1
TWENTIETH LEGISLATURE, 1999                                
STATE OF HAWAII                                            
                                                             
________________________________________________________________
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                   A  BILL  FOR  AN  ACT

RELATING TO THE REDEVELOPMENT OF BARBERS POINT NAVAL AIR STATION.



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

 1      SECTION 1.  The purpose of this Act is to provide economic
 
 2 opportunities in the west Oahu area.  The creation of jobs in
 
 3 west Oahu would not only help to alleviate current traffic
 
 4 problems but will provide job opportunities for the many students
 
 5 who will be attending the future University of Hawaii West Oahu
 
 6 campus.  Further, the university will provide the necessary human
 
 7 resources for the high technology park, once established.
 
 8      SECTION 2.  Section 206G-2, Hawaii Revised Statutes, is
 
 9 amended by adding four new definitions to be appropriately
 
10 inserted and to read as follows:
 
11      ""High technology" means emerging industries which are
 
12 technology-intensive, including electronics, biotechnology, and
 
13 alternative fuel source producers.
 
14      "High technology park" means a tract of real property
 
15 determined by the commission as being suitable for use as
 
16 building sites for projects by a group of enterprises engaged in
 
17 industrial, processing, or manufacturing enterprises for high
 
18 technology, including research, training, technical analyses,
 
19 software development, and pilot plant or prototype product
 

 
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 1 development, and may include the installation of improvements to
 
 2 the tract incidental to the use of the real property as a high
 
 3 technology park, such as water, sewer, sewage and waste disposal,
 
 4 and drainage facilities, sufficient to adequately service
 
 5 projects in the high technology park, and provision of incidental
 
 6 transportation facilities, power distribution facilities, and
 
 7 communication facilities.
 
 8      "Qualified high technology business" means:
 
 9      (1)  A business employing or owning capital or property, or
 
10           maintaining an office in this State; and
 
11      (2)  (A)  That has qualified research expenses paid or
 
12                incurred for research conducted in this State; or
 
13           (B)  That receives income derived from qualified
 
14                research expenses, provided that the income is
 
15                received from products sold from, manufactured, or
 
16                produced in the State; or services performed in
 
17                the State.
 
18      The term "qualified high technology business" does not
 
19      include any trade or business involving the performance of
 
20      services in the field of law, engineering, architecture,
 
21      accounting, actuarial science, performing arts, consulting,
 
22      athletics, financial services, brokerage services, or any
 
23      trade or business where the principal asset of the trade or
 

 
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 1      business is the reputation or skill of one or more of its
 
 2      employees; any banking, insurance, financing, leasing,
 
 3      rental, investing, or similar business; any farming
 
 4      business, including the business of raising or harvesting
 
 5      trees; any business involving the production or extraction
 
 6      of products of a character with respect to which a deduction
 
 7      is allowable under section 611, 613, or 613A of the Internal
 
 8      Revenue Code; any business operating a hotel, motel,
 
 9      restaurant, or similar business; any trade or business
 
10      involving a hospital, a private office of a licensed health
 
11      care professional, a group practice of licensed health care
 
12      professionals, or nursing home.
 
13      "Qualified research expenses" means:
 
14      (1)  Research
 
15           (A)  With respect to which expenditures may be treated
 
16                as expenses under Internal Revenue Code section
 
17                174;
 
18           (B)  Which is undertaken for the purpose of discovering
 
19                information
 
20                (i)  Which is technological in nature; and
 
21               (ii)  The application of which is intended to be
 
22                     useful in the development of a new or
 

 
 
 
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 1                     improved business component of the taxpayer;
 
 2                     and
 
 3           (C)  Substantially all of the activities of which
 
 4                constitute elements of a process of
 
 5                experimentation for a purpose described in
 
 6                paragraph (3).
 
 7           Such term does not include any activity described in
 
 8           paragraph (4).
 
 9      (2)  Tests to be applied separately to each business
 
10           component.
 
11           (A)  Paragraph (1) shall be applied separately with
 
12                respect to each business component of the
 
13                taxpayer.
 
14           (B)  The term "business component" means any product,
 
15                process, computer software, technique, formula, or
 
16                invention which is to be
 
17                (i)  Held for sale, lease, or license; or
 
18               (ii)  Used by the taxpayer in a trade or business
 
19                     of the taxpayer.
 
20           (C)  Special rule for production processes.  Any plant
 
21                process, machinery, or technique for commercial
 
22                production of a business component shall be
 

 
 
 
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 1                treated as a separate business component and not
 
 2                as part of the business component being produced.
 
 3      (3)  Purposes for which research may qualify for credit.
 
 4           For purposes of paragraph (1)(C):
 
 5           (A)  Research shall be treated as conducted for a
 
 6                purpose described in this paragraph if it relates
 
 7                to:
 
 8                (i)  A new or improved function;
 
 9               (ii)  Performance; or
 
10              (iii)  Reliability or quality.
 
11           (B)  Certain purposes not qualified.  Research shall in
 
12                no event be treated as conducted for a purpose
 
13                described in this paragraph if it relates to
 
14                style, taste, cosmetic, or seasonal design
 
15                factors.
 
16      (4)  Activities for which credit not allowed.
 
17           "Qualified research expenses" shall not include the
 
18           following:
 
19           (A)  Any research conducted after the beginning of
 
20                commercial production of the business component;
 
21           (B)  Any research related to the adaptation of an
 
22                existing business component to a particular
 
23                customer's requirement or need;
 

 
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 1           (C)  Any research related to the reproduction of an
 
 2                existing business component, in whole or in part,
 
 3                from a physical examination of the business
 
 4                component itself or from plans, blueprints,
 
 5                detailed specifications, or publicly available
 
 6                information with respect to such business
 
 7                component;
 
 8           (D)  Any efficiency survey; activity relating to
 
 9                management function or technique; market research,
 
10                testing, or development, including advertising or
 
11                promotions; routine data collection; or routine or
 
12                ordinary testing or inspection for quality
 
13                control;
 
14           (E)  Any research with respect to computer software
 
15                which is developed by, or for the benefit of, the
 
16                taxpayer primarily for internal use by the
 
17                taxpayer, other than for use in
 
18                (i)  An activity which constitutes qualified
 
19                     research, determined with regard to this
 
20                     subparagraph; or
 
21               (ii)  A production process with respect to which
 
22                     the requirements of paragraph (1) are met;
 
23           (F)  Any research conducted outside the State;
 

 
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 1           (G)  Any research in the social sciences, arts, or
 
 2                humanities; and
 
 3           (H)  Any research to the extent funded by any grant,
 
 4                contract, or otherwise by another person or
 
 5                governmental entity."
 
 6      SECTION 3.  Chapter 206G, Hawaii Revised Statutes, is
 
 7 amended by adding three new sections to be appropriately
 
 8 designated and to read as follows:
 
 9      "§206G-     Kalaeloa high technology park.  The commission
 
10 shall identify real property that is suitable for use as a high
 
11 technology park and shall assist in the development of an
 
12 industrial park to facilitate the growth of the commercial high
 
13 technology industry in Hawaii.
 
14      §206G-     State income tax exemption.  (a)  The director of
 
15 taxation shall certify that a qualified high technology business
 
16 in the high technology park is exempt from the payment of income
 
17 taxes on the income received by the qualified high technology
 
18 business for a five year period.  The director, however, shall
 
19 not certify any qualified high technology business for a five
 
20 year period if the  first taxable year begins after December 31,
 
21 2004.
 
22      §206G-     State general excise tax exemption.  (a)  The
 
23 director of taxation shall certify that a qualified high
 

 
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                                     H.B. NO.           H.D. 1
                                                        
                                                        

 
 1 technology business in the high technology park is exempt from
 
 2 the payment of general excise taxes on the gross income or gross
 
 3 proceeds received by the qualified high technology business for a
 
 4 five year period.  The director, however, shall not certify any
 
 5 qualified high technology business for a five year period if the
 
 6 first taxable  year begins after December 31, 2004.
 
 7      (b)  The gross income or gross proceeds received by a
 
 8 contractor shall be exempt from the general excise tax for
 
 9 construction within the Kalaeloa high technology park for a
 
10 qualified high technology business that has been certified  by
 
11 the director."
 
12      SECTION 4.  New statutory material is underscored.
 
13      SECTION 5.  This Act, upon its approval, shall apply to
 
14 taxable years beginning after December 31, 1999 and before
 
15 January 1, 2009.