Enterprise Zones; Wind Energy

Authorizes the sale of wind farm generated electricity sold to a
public utility to qualify for state enterprise zone benefits.

THE SENATE                              S.B. NO.           2166
TWENTIETH LEGISLATURE, 2000                                
STATE OF HAWAII                                            

                   A  BILL  FOR  AN  ACT



 1      SECTION 1.  The legislature finds that wind farms that
 2 produce electricity not only reduce our dependence on fossil
 3 fuels but help our economy as well.  For example, Kamao'a Wind
 4 Farm on the Big Island has the potential of reducing the Hilo and
 5 Kona regions' dependency on oil by forty thousand barrels
 6 annually.  This reduction will reduce pollution in the area and
 7 help stabilize the State's dependence on imported oil supplies.
 8      Additionally, Kamao'a Wind Farm will pump $2,500,000 in the
 9 local economy to repower the wind farm.  Kamao'a will provide a
10 solid industrial base to help rejuvenate the ailing Kau economy
11 by providing invaluable training and long-term employment to
12 residents.
13      The purpose of this Act is to assist electricity producing
14 wind farms by allowing such farms to benefit from the State's
15 enterprise zone program.  This Act also provides an exemption
16 from the general excise tax for the sale of electric power to a
17 public utility.
18      SECTION 2.  Section 209E-2, Hawaii Revised Statutes, is
19 amended by amending the definition of "qualified business" to

Page 2                                                     
                                     S.B. NO.           2166

 1 read as follows:
 2      ""Qualified business" means any corporation, partnership, or
 3 sole proprietorship authorized to do business in the State which
 4 is qualified under section 209E-9 and is:
 5      (1)  Subject to the state corporate or individual income tax
 6           under chapter 235;
 7      (2)  Engaged in manufacturing, the wholesale sale of
 8           tangible personal property as defined in section 237-4,
 9           or a service business as defined in this chapter; [or]
10      (3)  Engaged in producing agricultural products where the
11           business is a producer as defined in section 237-5[.]
12           or;
13      (4)  Engaged in producing electric power from wind energy
14           for sale primarily to a public utility company for
15           resale to the public."
16      SECTION 3.  Section 209E-11, Hawaii Revised Statutes, is
17 amended to read as follows:
18      "209E-11  State general excise and use tax exemptions.  The
19 department shall certify annually to the department of taxation
20 that any qualified business is exempt from the payment of general
21 excise taxes on the gross proceeds from the manufacture of
22 tangible personal property, the wholesale sale of tangible
23 personal property, the sale of electric power to a public utility

Page 3                                                     
                                     S.B. NO.           2166

 1 for resale to the public, or the engaging in a service business
 2 by a qualified business in the enterprise zone and exempt from
 3 the use tax for purchases by a qualified business.  The gross
 4 proceeds received by a contractor shall be exempt from the
 5 general excise tax for construction within an enterprise zone
 6 performed for a qualified business within an enterprise zone.
 7 The exemption shall extend for a period not to exceed seven
 8 years."
 9      SECTION 4.  Statutory material to be repealed is bracketed.
10 New statutory material is underscored.
11      SECTION 5.  This Act shall take effect upon its approval.
13                           INTRODUCED BY:  _______________________