Sports Complex

Provides for the development of a sports complex to provide
facilities for one or more professional foreign or mainland
baseball, football, soccer, or other sports leagues or teams, and
for the use of the complex by state residents when the facilities
are not in use by the teams.  Creates an excise tax exemption.

HOUSE OF REPRESENTATIVES                H.B. NO.872        
TWENTIETH LEGISLATURE, 1999                                
STATE OF HAWAII                                            

                   A  BILL  FOR  AN  ACT



 1      SECTION 1.  The legislature finds that Hawaii's economy
 2 depends to a large extent upon the health of the visitor
 3 industry, which requires continual renewal and revitalization.
 4 Hawaii is now being perceived by many in the visitor industry as
 5 an aging or mature tourist destination, and that there is an
 6 immediate need to change the State's image by developing new
 7 tourist areas.  The legislature finds that one way to transform
 8 the State's image is through the development of sports tourism,
 9 specifically, through the development of a sports complex in the
10 State.
11      Because of its year-round temperate climate and location in
12 the center of the Pacific Basin, Hawaii is ideally situated to
13 serve as the site for both national and international athletic
14 performances, games, and competitions.  Sports in Hawaii
15 represents not only a significant source of enjoyment for state
16 residents--providing greater opportunities for Hawaii's youth in
17 activities that promote personal growth and healthy life styles--
18 but is also an important component of economic development in the
19 islands.

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 1      The encouragement of the sports industry in the State
 2 represents an important niche in the diversification of tourism
 3 that can help to distinguish the State from other rival tourist
 4 destinations.  In addition, due to increased media exposure,
 5 sporting events and activities provide a steady source of
 6 visitors to Hawaii with a sense of purpose capable of surviving
 7 the fluctuations of a sensitive tourist market.
 8      The legislature further finds that the proposed sports
 9 complex should provide training facilities for one or more
10 professional teams or leagues--including baseball, football,
11 soccer, and other sporting events--for both national and foreign
12 teams.  For example, certain Japanese baseball teams routinely
13 leave Japan during the winter and set up training camps on the
14 United States mainland.  While some Japanese teams have come to
15 Hawaii for spring training, they have been restricted by the
16 inadequate facilities available.  A survey and marketing study of
17 Japanese professional baseball teams has indicated that one or
18 more teams would conduct spring training in an appropriately
19 equipped Hawaii facility.
20      One such study was the "Kapolei Sports and Recreation
21 Center:  Alternative Sites Analysis", which was prepared for the
22 state comptroller in June, 1990, by Mitsunaga & Associates, Inc.,
23 of Honolulu.  That report was initially prepared to select and

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                                     H.B. NO.872        

 1 evaluate alternative sites for a training and practice facility
 2 for professional Japanese baseball teams, who would train and
 3 practice in Hawaii during the winter.  The 1993 preface to that
 4 study noted that at the time of the report's completion in 1990,
 5 the concept behind such a facility was that it would attract many
 6 tourists from Japan.
 7      In addition, because of the news media that routinely follow
 8 Japanese teams, Hawaii would be provided with free advertising in
 9 Japanese news media.  The development of a sports complex would
10 therefore result in benefits accruing to the State from several
11 sources, including the publicity and possible broadcasting of
12 sporting events, the attraction of tourists to the facility and
13 the State in general, and the expenditures in Hawaii associated
14 with the professional teams and their families, tourists, and the
15 media.
16      The 1993 preface to that report further noted that in order
17 to make the concept work, the idea had to be sold to private
18 firms that sponsor the teams.  Sites in the Ewa area of Oahu were
19 initially identified as being ideally suited for the concept,
20 since tourists could be housed in the nearby Ko Olina resort
21 area.  However, the report further noted that since that time,
22 there had been a slowing down of resort developments and the
23 withdrawal of Japanese overseas investments placed the original

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 1 concept on hold.  The report nevertheless recommended that the
 2 proposed facility could be constructed in anticipation of being
 3 used by Hawaii residents for local sports activities.
 4      The legislature finds that the concept of constructing a
 5 sports complex for national or international sports leagues or
 6 teams is still viable.  The construction of such a facility could
 7 be financed by a joint-venture between the foreign interests and
 8 the Hawaii state government.  The spill-over benefits of the
 9 facility would be the multi-purpose use of the sports and
10 recreation complex by local Hawaii residents when the national or
11 international leagues were not using the complex.  The sports
12 complex may also act as a catalyst to attract further development
13 of the areas surrounding the complex.
14      However, rather than limiting the site to Ewa, the
15 legislature finds that the other areas throughout the State
16 should be re-examined for possible site location of the complex.
17 In addition, if no state or county land is available, the State
18 should consider negotiating leasing the land from a private
19 landowner for the user.  The State should also provide various
20 economic and tax incentives whenever feasible to encourage the
21 development of the sports complex.
22      Finally, the legislature finds that an excise tax exemption
23 should be used as an incentive to encourage the construction and

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 1 operation of a sports complex, thereby assisting the State's
 2 depressed construction industry.  In turn, the sports complex,
 3 once constructed, will generate additional tax revenues,
 4 providing a sound return on the State's initial investment and
 5 assisting in Hawaii's economic recovery.  An excise tax exemption
 6 may also serve as a catalyst to hesitant out-of-state developers
 7 of a sports complex who are leery of the State's fiscal
 8 situation, and need support and encouragement from the State to
 9 finalize their commitment.
10      The purpose of this Act is therefore to provide for the
11 development of a sports complex to accommodate professional
12 sports teams or leagues from the United States mainland or abroad
13 to train and practice, and to allow for the use of the facilities
14 by local residents when the complex is not in use by the foreign
15 baseball teams or leagues.
16      SECTION 2.  The director of business, economic development,
17 and tourism, in cooperation with the Hawaii Visitors and
18 Convention Bureau, shall:
19      (1)  Enter into negotiations with private domestic or
20           international firms that sponsor professional sports
21           teams or leagues to develop a sports complex in the
22           State to provide practice or training facilities for
23           one or more professional baseball, football, soccer, or

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 1           other sports leagues or teams, and for the use of state
 2           residents when the facilities are not being used by
 3           those leagues or teams.  The contract to develop the
 4           sports complex shall include the following terms:
 5           (A)  The public lands will be leased to one or more
 6                private domestic or foreign organizations for a
 7                nominal fee ($1 per year) for a period of up to
 8                one hundred years;
 9           (B)  In exchange for the use of the land, the private
10                organization agrees to construct the sports
11                complex, including parking and necessary
12                infrastructure at the site, and to allow Hawaii
13                residents or other groups to use the site during
14                periods in which the facility is not in use by the
15                organization's leagues or teams;
16           (C)  The State agrees to waive zoning and land use
17                district requirements, permitting fees, and other
18                state or county requirements as necessary; and
19           (D)  The State agrees to provide tax incentives for a
20                ten-year period, including a tax credit for the
21                construction and operation of the sports complex
22                as provided in section 3 of this Act;
23      (2)  If no public lands are available, negotiate with

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 1           private landowners in suitable locations around the
 2           State to provide lands for a sports complex on terms
 3           similar to those outlined in paragraph (1);
 4      (3)  Review relevant studies analyzing the feasibility of
 5           attracting one or more domestic or foreign professional
 6           sports leagues or teams to train, practice, or compete
 7           in a sports complex in the State;
 8      (4)  Review possible sites throughout the State for the best
 9           possible location of such a sports complex, whether or
10           not on public land, taking into consideration such
11           factors as accessibility, size and shape of site,
12           industrial and agricultural nuisances, infrastructure
13           considerations, soil suitability, weather, proximity to
14           hotels or other housing, interference with institutions
15           or other public facilities, proximity to commercial
16           centers, aesthetic values, and other relevant factors;
17           and
18      (5)  Report progress in negotiations and any findings and
19           recommendations, including any proposed implementing
20           legislation, to the legislature and governor no later
21           than twenty days before the convening of the regular
22           session of 2000.
23      SECTION 3.  Chapter 237, Hawaii Revised Statutes, is amended

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 1 by adding a new section to be appropriately designated and to
 2 read as follows:
 3      "237-    Sports complex; general excise tax exemption for
 4 qualified construction.  (a)  There shall be exempt from, and
 5 excluded from the measure of, the taxes imposed by this chapter
 6        per cent of the gross proceeds received from the design or
 7 qualified construction of a sports complex in this State.
 8      (b)  For the purposes of this section:
 9      "Qualified construction" means:
10      (1)  The construction is approved by the director as
11           eligible for the exemption under this section;
12      (2)  A new construction project with all county building
13           permits issued after July 1, 1999; and
14      (3)  The construction is in accordance with any rules
15           adopted pursuant to chapter 91 to administer this
16           section.
17      "Sports complex" means a facility consisting of one or more
18 structures located in this State that is primarily dedicated to
19 providing practice or training facilities for one or more
20 professional baseball, football, soccer, or other sports leagues
21 or teams, and for the use of state residents when the facilities
22 are not being used by those leagues or teams.
23      (c)  The director may require the taxpayer applying for an

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 1 exemption under this section to furnish information to ascertain
 2 the validity of the exemption claim and may adopt rules pursuant
 3 to chapter 91 necessary to administer this section.
 4      (d)  The exemption allowed under this section shall be
 5 available for amounts received after June 30, 1999, and before
 6 July 1, 2009."
 7      SECTION 4.  New statutory material is underscored.
 8      SECTION 5.  This Act shall take effect on July 1, 1999. 
10                           INTRODUCED BY:  _______________________