Report Title:

Technology Growth; Project EAST; Marketing

Description:

Establishes a tax credit for taxpayers that contribute in-kind services to establish or maintain technology laboratories in public schools. Appropriates funds for Project EAST expansion and for the Economic Development Alliance of Hawaii to coordinate marketing, with emphasis on representing Hawaii's technology companies and opportunities on the mainland.

THE SENATE

S.B. NO.

1698

TWENTY-THIRD LEGISLATURE, 2005

 

STATE OF HAWAII

 


 

A BILL FOR AN ACT

 

relating to technology growth.

 

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

SECTION 1. The legislature finds that many of the industries that make up Hawaii's broad-based technology sector are showing strong growth and expansion potential. Life science initiatives at the John A. Burns school of medicine and a flurry of technology centers and science initiatives – Mauna Kea astronomy education center, natural energy laboratory of Hawaii authority's recently completed gateway energy center, two technology centers in Kauai and Maui – as well as support in excess of $1,000,000,000 in science and technology infrastructure within the last five years have led to unprecedented opportunities. Private technology companies are now far more encouraged than in previous years, in part due to changes in state regulatory practices and tax incentives approved by the 2004 legislature.

Building on these opportunities is key to continued expansion. Hawaii's economic development boards are a vital part of the State's outreach efforts. While the economic development boards have conducted marketing and outreach, building on the "Team Hawaii" concept, they have been unable to participate in most United States mainland exhibitions and conferences due to the lack of funding. The Economic Development Alliance of Hawaii, Inc., a nonprofit umbrella organization for the four county economic development boards, estimates that the economic development boards miss as many as one hundred United States mainland exhibitions and conferences in which the Hawaii technology story could be presented. Currently, presentations are limited by budget constraints and simply do not match the market emphasis or level of other technology sites such as the Raleigh Durham triangle, San Antonio, or San Diego, much less Silicon Valley.

Training a technology savvy workforce is another key component. To help meet this need, Act 218, Session Laws of Hawaii 2004, established the Hawaii 3Ts school technology laboratories fund. Modeled after the highly successful Hawaii 3Rs school repair and maintenance fund, the 3Ts fund encourages public-private partnerships for the establishment and maintenance of technology laboratories in Hawaii's public schools.

The 3Ts concept is an expansion of the project EAST (environmental and spatial technology) initiative started as a pilot program in the Maui district high schools during the summer of 2000, that later moved to Hawaii county, and then a middle school on Kauai. Project EAST holds great potential for assisting Hawaii's public schools in developing important critical thinking, problem solving, and analytical skills in Hawaii's young people that are necessary for these individuals to succeed in high technology based jobs. Project EAST integrates cutting edge technology, such as computer assisted drafting, geographic information systems, global positioning systems, as well as computer graphic applications, such as soft image, into the educational curriculum. The goal of this initiative is to prepare students for the information technology age by providing a comprehensive project-based and student-centered learning program where the students are responsible for their own learning.

Seven Project EAST labs have been established in Hawaii – Chiefess Kamakahelei middle school on Kauai; Maui high school, Baldwin high school, King Kekaulike high school, Lahainaluna high school, and Kihei charter school on Maui; and Kea`au high school on Hawaii. Since 2001, Hawaii students have won a number of awards at the National EAST Conference, competing successfully against approximately two hundred schools in six other states.

The Economic Development Alliance of Hawaii, Inc., is responsible for administering the 3Ts fund, and every dollar of state funds must be matched on a fifty cents basis in the form of in-kind services or monetary donations by nonstate sources.

The purpose of the Act is to assist the Economic Development Alliance of Hawaii, Inc., and the four county economic development boards in their support of Hawaii's growing technology sector.

SECTION 2. Chapter 235, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"§235-   Credit for school technology laboratories. (a) There shall be allowed to each taxpayer who is subject to the tax imposed by this chapter, and does not owe the State delinquent taxes, penalties, or interest, a credit for contributions of moneys, goods, or in-kind services provided by the taxpayer for the establishment and maintenance of technology laboratories in public schools in Hawaii under section 302A-1314. The credit shall be 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.

(b) The amount of the credit determined under this section for the taxable year shall be equal to ten per cent of the value of contributions of moneys, goods, or in-kind services to the Hawaii 3Ts school technology laboratories fund established under section 302A-1314 for that taxable year; provided that the aggregate value of the contributions of moneys, goods, or in-kind services claimed by a taxpayer shall not exceed $          .

(c) For purposes of this section:

"Public schools" has the same meaning as defined in section 302A-101.

"School technology laboratory" means a multi-station computer laboratory established under section 302A-1314 that offers students a variety of different types of hardware and software.

"Value of contributions of moneys, goods, or in-kind services" means the actual cash amount or, for the purposes of determining the value of goods or in-kind services, the fair market value of the donated goods or uncompensated services or labor, as determined and certified by the department of business, economic development, and tourism.

(d) The credit allowed under this section shall be claimed against net income tax liability for the taxable year. A tax credit under this section that exceeds the taxpayer's income tax liability may be used as a credit against the taxpayer's income tax liability in subsequent years until exhausted.

(e) All claims for tax credits under this section, including any amended claims, shall be filed on or before the end of the twelfth month following the close of the taxable year for which the credits may be claimed. Failure to comply with the foregoing provision shall constitute a waiver of the right to claim the credit.

(f) The department of business, economic development, and tourism shall maintain records of the names of taxpayers eligible for the credit and the total value of moneys, goods, or in-kind services contributed for the establishment and maintenance of technology laboratories in public schools for the taxable year. All contributions shall be verified by the department of business, economic development, and tourism. The department of business, economic development, and tourism shall total all contributions that the department certifies. Upon each determination, the department of business, economic development, and tourism shall issue a certificate to the taxpayer certifying:

(1) The amount of the contribution; and

(2) That the taxpayer has obtained a current and valid certificate signed by the director of taxation, showing that the taxpayer does not owe the State any delinquent taxes, penalties, or interest.

The taxpayer shall file the certificate from the department of business, economic development, and tourism with the taxpayer's tax return with the department of taxation. When the total amount of certified contributions reaches $          , the department of business, economic development, and tourism shall immediately discontinue certifying contributions and notify the department of taxation. In no instance shall the total amount of certified contributions of moneys, goods, or in-kind services exceed $           for each taxable year.

(g) The State shall provide not more than $           in tax credits for contributions of moneys, goods, or in-kind services in Hawaii for the establishment and maintenance of technology laboratories in public schools.

(h) The director of taxation shall prepare any forms that may be necessary to allow a credit to be claimed under this section."

SECTION 3. There is appropriated out of the general revenues of the State of Hawaii the sum of $250,000, or so much thereof as may be necessary for fiscal year 2005-2006, for a grant-in-aid to the Economic Development Alliance of Hawaii, Inc., to expand its Project EAST program to four additional schools on islands of and ; provided that no funds shall be expended unless matching funds are provided in the manner specified in section 302A-1314(p), Hawaii Revised Statutes.

SECTION 4. The sums appropriated under sections 3 and 4 of this Act shall be expended by the department of business, economic development, and tourism for the purposes of this Act.

SECTION 5. This Act shall take effect on July 1, 2005.

INTRODUCED BY:

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