HB2942.DOC

SECTION 1. The legislature finds there is a need to redevelop Hawaii's urban cores, particularly in light of the current economic climate and constricted housing market. The purpose of this Act is to encourage the private redevelopment of Hawaii's urban cores through financial incentives and expedited administrative procedures.

SECTION 2. Chapter 53, Hawaii Revised Statutes, is amended by adding a new part to be appropriately designated and to read as follows:

“Part . URBAN CORE REDEVELOPMENT

§53- Urban core redevelopment districts. Every county with a population of at least five hundred thousand shall designate at least four square miles of blighted areas composed primarily of low-density, multi-family residences as urban core redevelopment districts. For the purposes of this part, "blighted area" has the same meaning as defined in section 53-1.

§53- Tax incentives; expedited permitting. (a) Any entity that is:

(1) Engaged in the business of qualified property development within an urban core redevelopment district; or

(2) A purchaser or lessee of certain real property developed within an urban core redevelopment district;

may claim the income tax incentives under section 235- , where applicable.

(b) All applications for a development-related permit, license, or approval required under chapter 205 for any development within an urban core redevelopment district shall be processed under the expedited procedures provided under section 91-13.5(e)."

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

"§235- Urban core redevelopment; income tax deduction; income tax credit. (a) There shall be allowed to each taxpayer subject to the taxes imposed by this chapter, a deduction from gross income for the taxable year in which the deduction is properly claimed. The amount of the deduction shall be one hundred per cent of the taxpayer's aggregate expenditures within the taxable year for the acquisition of real property, administrative fees, legal consultation, planning and design, or construction to develop residential or mixed commercial-residential building units within an urban core redevelopment district designated under part of chapter 53.

(b) There shall be allowed to each taxpayer subject to the taxes imposed by this chapter, an income tax credit 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. The amount of the credit shall be:

(1) $20,000 for each purchase of a commercial building unit;

(2) $10,000 for each purchase of a residential building unit;

(3) $8,000 for each commercial building unit leasehold of at least years; and

(4) $3,000 for each residential building unit leasehold of at least years;

which building unit shall have been purchased from a taxpayer under subsection (a) and developed under permitting granted pursuant to the procedures set forth in section 91-13.5(e).

(c) If the tax credit under subsection (b) exceeds the taxpayer's income tax liability, the excess of the credit over liability may be used as a credit against the taxpayer's income tax liability in subsequent years until exhausted.

(d) The director of taxation shall prepare forms as may be necessary to claim a deduction or credit under this section. The director may also require the taxpayer to furnish information to ascertain the validity of a claim made under this section and may adopt rules pursuant to chapter 91 necessary to effectuate the purposes of this section."

SECTION 4. Section 91-13.5, Hawaii Revised Statutes, is amended to read as follows:

"§91-13.5 Maximum time period for business or development-related permits, licenses, or approvals; automatic approval; extensions. (a) Unless otherwise provided by law, an agency shall adopt rules that specify a maximum time period to grant or deny a business or development-related permit, license, or approval; provided that the application is not subject to state administered permit programs delegated, authorized, or approved under federal law.

(b) All such issuing agencies shall clearly articulate informational requirements for applications and review applications for completeness in a timely manner.

(c) All such issuing agencies shall take action to grant or deny any application for a business or development-related permit, license, or approval within the established maximum period of time, or the application shall be deemed approved; provided that a delay in granting or denying an application caused by the lack of quorum at a regular meeting of the issuing agency shall not result in approval under this subsection; provided further that any subsequent lack of quorum at a regular meeting of the issuing agency that delays the same matter shall not give cause for further extension, unless an extension is agreed to by all parties.

(d) Notwithstanding any other law to the contrary, any agency that reviews and comments upon an application for a business or development-related permit, license, or approval for a housing project developed under section 201H-38 shall respond within forty-five days of receipt of the application, or the application shall be deemed acceptable as submitted to the agency.

(e) Notwithstanding any other law to the contrary, an application for a development-related permit, license, or approval required under chapter 205 for any development within an urban core redevelopment district designated under part of chapter 53 shall be granted or denied within thirty days of receipt of the application, or the application shall be deemed approved.

[~~(e)~~] (f) The maximum period of time established pursuant to this section shall be extended in the event of a national disaster, state emergency, or union strike, which would prevent the applicant, the agency, or the department from fulfilling application or review requirements.

[~~(f)~~] (g) This section shall not apply to:

(1) Any proceedings of the public utilities commission; or

(2) Any county or county agency that is exempted by county ordinance from this section.

[~~(g)~~] (h) For purposes of this section, "application for a business or development-related permit, license, or approval" means any state or county application, petition, permit, license, certificate, or any other form of a request for approval required by law to be obtained prior to the formation, operation, or expansion of a commercial or industrial enterprise, or for any permit, license, certificate, or any form of approval required under sections 46-4, 46-4.2, 46-4.5, 46-5, and chapters 183C, 205, 205A, 340A, 340B, 340E, 340F, 342B, 342C, 342D, 342E, 342F, 342G, 342H, 342I, 342J, 342L, and 342P."

SECTION 5. This Act does not affect rights and duties that matured, penalties that were incurred, and proceedings that were begun before its effective date.

SECTION 6. 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 7. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 8. This Act shall take effect on July 1, 2010, and shall apply to taxable years beginning after December 31, 2009.

INTRODUCED BY:	_____________________________

HOUSE OF REPRESENTATIVES	H.B. NO.	2942
TWENTY-FIFTH LEGISLATURE, 2010
STATE OF HAWAII