HOUSE OF REPRESENTATIVES	H.B. NO.	1167
TWENTY-EIGHTH LEGISLATURE, 2015		H.D. 1
STATE OF HAWAII

A BILL FOR AN ACT

RELATING TO THE CAPITAL INFRASTRUCTURE TAX CREDIT.

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

     SECTION 1.  Section 235-17.5, Hawaii Revised Statutes, is amended as follows:

     1.  By amending its title to read:

     "[[]§235-17.5[]]  Capital infrastructure tax credit."

     2.  By amending subsections (b) and (c) to read:

     "(b) For the purpose of this section:

     "Base investment" means the amount of money invested by an investor[.] with a qualified infrastructure tenant.

     "Capital infrastructure costs" means capital expenditures, as used in section 263 of the Internal Revenue Code and the regulations promulgated thereunder; provided that the capital expenditures are for real property, [and] fixtures, structures, machinery, equipment, or other ship repair specific capital assets that are paid or incurred, including payments against capital financing by loan or capital lease, in connection with the displaced tenant's move of the tenant's current active trade or business to the tenant's new location[;] within Honolulu harbor; provided further that the capital infrastructure costs shall not include amounts for which another credit is claimed[.] under this chapter.

     "Net income tax liability" means income tax liability reduced by all other credits allowed under this chapter.

     "Qualified infrastructure tenant" means a business:

     (1)  That currently owns capital or property or maintains an office, operations, or facilities at the former Kapalama military reservation site;

     (2)  Whose principal business is maritime, and waterfront dependent, and is [included under the State's plan to relocate the business to piers twenty-four through twenty-eight] to be relocated within Honolulu harbor; and

     (3)  [Will] That will be displaced and relocated by the State pursuant to the Kapalama container terminal project[.]; or

(4) That may also include a special purpose entity formed for purposes of raising investor capital pursuant to this credit; provided that the special purpose entity cannot generate any additional credits beyond the limits per qualified infrastructure tenant as provided under subsection (c).

     (c)  The amount of the tax credit shall be equal to fifty per cent of the capital infrastructure costs paid or incurred by the qualified infrastructure tenant during the taxable year up to a maximum of [$2,500,000] $         in [capital infrastructure costs] tax credits per qualified infrastructure tenant in any taxable year, provided that the qualified infrastructure tenant shall notify the taxpayer claiming the credit under subsection (a) of the amount of capital infrastructure costs which may be claimed.  If the capital infrastructure costs paid or incurred by the qualified infrastructure tenant result in a tax credit in excess of $         in any taxable year, the excess capital infrastructure costs may be carried over and applied to subsequent taxable years, until exhausted, for computation of the tax credit."

     SECTION 2.  Statutory material to be repealed is bracketed and stricken.  New statutory material is underscored.

     SECTION 3.  This Act, upon its approval, shall apply to taxable years beginning after December 31, 2014.

Report Title:

Tax Credits; Capital Infrastructure; Honolulu Harbor

Description:

Amends the maximum Capital Infrastructure Tax Credit for qualified tenants per taxable year.  Allows excess capital infrastructure tax credits to be applied to subsequent tax years.  Expands claimable capital expenditures.  Includes as a qualified infrastructure tenant, investors formed to raise capital pursuant to the credit.  (HB1167 HD1)

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