Bill Text: HI HB1511 | 2012 | Regular Session | Amended
Bill Title: High Technology Development Corporation; University of Hawaii; Land Lease
Spectrum: Partisan Bill (Democrat 2-0)
Status: (Engrossed - Dead) 2012-03-08 - (S) Referred to EDU/EDT, WAM. [HB1511 Detail]
Download: Hawaii-2012-HB1511-Amended.html
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HOUSE OF REPRESENTATIVES |
H.B. NO. |
1511 |
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TWENTY-SIXTH LEGISLATURE, 2011 |
H.D. 1 |
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STATE OF HAWAII |
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A BILL FOR AN ACT
RELATING TO HIGH TECHNOLOGY.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
SECTION 1. Research and development is the core of innovation, and without innovation, there is no technology industry. Consequently, the growth of our economy is stunted with no new products, services, or processes. Research and development is the critical first step in the product development cycle. During the research and development stage, ideas and theories are tested to determine feasibility. Due to the increasing interconnected and competitive global economy, fostering and encouraging innovation is essential to a comprehensive economic strategy for the State. The key to developing more jobs and more prosperity will be to create and deploy new products, services, and processes.
Innovation is essential for creating new jobs in the high technology and traditional sectors. In recent years, innovation has led to new jobs in many different sectors as diverse as defense/dual‑use, software and information technology, life sciences and biotechnology, and clean energy. At the same time, innovations ripple through the economy, creating jobs for workers building advanced infrastructure (clean energy solutions), installing broadband networks, and utilizing new devices and products in the service industries, such as health-care and tourism.
Innovation is also critical for sustaining the vitality and resilience of our economy. Future challenges (natural or man-made) are impossible to predict, but what is certain is that an economy better able to respond to such events by adapting innovative solutions and re-deploying old activities, jobs, and industries will be least susceptible to adversity.
Innovation is the key to remaining competitive globally, creating new and better jobs, and maintaining a resilient economy. The legislature recognizes this and supports research and development as the stimulant to our innovation economy.
The legislature finds that, in order to facilitate the development and growth of Hawaii's commercial high technology industry sector, the high technology development corporation established the Manoa innovation center. The Manoa innovation center is the first and only innovation and incubation facility on Oahu that offers an array of client services, facilities, and equipment to assist new and early stage technology companies. The Manoa innovation center was built on public lands that have been transferred to the University of Hawaii. The high technology development corporation's current land lease with the University of Hawaii expires in 2015. If the lease is not extended, the State will lose the Manoa innovation center, a technology infrastructure and economic development engine that would be difficult to replace.
The legislature also finds that current state tax law parallels, with enhancements tailored to Hawaii's unique position, the Internal Revenue Code, providing support for scientific experimentation at twenty per cent of the cost of the qualified research. The program cost to the State has averaged about $11,000,000 per year over the last nine years, and in 2006, provided funding to over four hundred companies. This tax credit has been a great source of support for local companies, especially to the research and development companies that are still in the start-up and early stage, and is seen as helping to level the playing field of our high cost state, as Hawaii companies compete with national and international competition. It has also been useful in providing support for early-stage research and development companies that are not yet profitable and have few sources of funding. Further, the refundable element is helping to attract new technology companies to Hawaii.
In addition, in 2010, the senate committee on economic development and technology and the house committee on economic revitalization, business, and military affairs convened an informal small business discussion group to address the most critical issues facing the small business sectors within Hawaii's economy. Representatives from the Chamber of Commerce of Hawaii, construction and trades industries, community nonprofits, the agricultural sector, food and restaurant industries, retailing, the science and technology sector, the commercial transportation industry, and interested stakeholders developed a package of bills that address the most pressing problems facing Hawaii's small business community.
The purpose of this Act is to:
(1) Support the findings of the small business working group and recommendations to reauthorize the dormant income tax credit for qualified research activities for five years; and
(2) Direct the University of Hawaii to extend the high technology development corporation's land lease, with the same terms, for twenty-five years beyond the existing lease's expiration.
SECTION 2. Section 235-110.91, Hawaii Revised Statutes, is amended as follows:
1. By amending subsection (f) to read:
"(f) As used in this section:
"Basic research" under section 41(e) of the Internal Revenue Code shall not include research conducted outside of the State.
"Qualified high technology business"
means [the same as in section 235-110.9.] a business, employing or
owning capital or property, or maintaining an office, in this State; provided
that:
(1) More than fifty per cent of its total business activities are qualified research; and provided further that the business conducts more than seventy-five per cent of its qualified research in this State; or
(2) More than seventy-five per cent of its gross income and funds is derived from qualified research; and provided further that this income is received from:
(A) Products sold from, manufactured in, or produced in this State; or
(B) Services performed in this State.
"Qualified research" [under] means
the same as in section [41(d)(1)] 41(d) of the Internal
Revenue Code; provided that qualified research shall not include
research conducted outside of the State."
2. By amending subsection (j) to read:
"(j) This section shall not apply to
taxable years beginning after December 31, [2010.] 2015."
SECTION 3. The University of Hawaii shall extend the current land lease agreement with the high technology development corporation, located at 2800 Woodlawn Drive, Manoa, Honolulu, Hawaii, identified as Tax Map Key 2-9-26: Por. 3, 37, and 38, on the same terms and for a period no less than twenty-five years from the expiration date of the existing lease.
SECTION 4. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.
SECTION 5. This Act shall take effect upon its approval; provided that section 2 shall apply to taxable years beginning after December 31, 2011, and shall be repealed on December 31, 2016; provided further that section 235-110.91, Hawaii Revised Statutes, shall be reenacted in the form in which it read on the day before the effective date of this Act.
Report Title:
High Technology; R&D Income Tax Credit; High Technology Development Corporation; University of Hawaii; Land Lease
Description:
Extends the tax credit for qualified research activities for five years. Sunset 12/31/16. Requires the UH to extend the current land lease with the high technology development corporation for no less than 25 years from the date of expiration. (HD1)
The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.
