The URL can be used to link to this page

Home My WebLink AboutCOM 0471.000 2014-2016 DENNIS "FRESH"ONISHI �Y'Oi M '' PHONE: (808)961-8396 '''�� FAX: (808)961-8912 Council Member � �'� ��... �:• EMAIL:donishi@hawaiicounry.gov District 3 ' orf 1E4%4�--- HAWAII COUNTY COUNCIL 25 Aupuni Street, Hilo, Hawaii 96720 N c� MEMORANDUM C, CD DATE: September 17, 2015 s - TO: Dru Mamo Kanuha, Council Chair And Members of the Hawaii County Council FROM: Dennis "Fresh" Onishi, Council Member )"(0 SUBJECT: A Resolution to Nominate Enterprise Zones for Consideration and Designation by the Governor of the State of Hawaii Attached for your consideration is a resolution to nominate enterprise zones for consideration and designation by the Governor of the State of Hawai`i. Also attached is a copy of the power point presentation. I am requesting that this be placed on the October 6, 2015 Committee agenda. DO/de ;es. cle6. -\5 Comm. No. 44:11 Ref. To: C111-6 0C-- Ref. LRef. Date SEP 1 8 2015 Hawai`i County is an Equal Opportunity Provider and Employer. 9/17/2015 DEPARTMENT OF BUSINESS, ECONOMIC DEVELOPMENT & TOURISM t , ( ENTERPRISE ZONES PARTNERSHIP Mark J. Ritchie, Branch Chief Wayne Thom, Manager Enterprise Zones Partnership Program ENZONES'SE 731 PROGRAM PURPOSE ► job creation ► Stimulate certain kinds of business/industry development in economically depressed areas 3 1 9/17/2015 PROCESS ► State provides excise and income tax incentives'`. Counties nominate zones for Governor's approval, help market and provide incentives. Eligible businesses enroll and qualify annually by meeting goals. I:NTERPRISE ZONES State Tax Incentives 100% General Excise Tax exemption for 7 years. • Non-refundable income tax credit against tax liability - 80% declining to 20% over 7 years. ► Another non-refundable income tax credit against UI premium - 80% declining to 20% over 7 years. • Licensed contractor and licensed sub-contractors pays no GET on income from construction or major renovation paid by EZ firm. I N11,41'1,1,1 3 2 9/17/2015 Caveat Companies enrolled in the Enterprise Zone Program remain subject to County zoning, permitting and any other County laws or restrictions that apply to the establishment of the business in the County. Counties Nominate Zones and Provide Incentives • Designate areas based on low income or high unemployment census tracts. Assist DBEDT with marketing & promotion. Process and record EZ enrollment and yearly reporting. •N 11.III'H 11 3 3 9/17/2015 ELIGIBLE BUSINESS ACTIVITIES Agricultural production or Information technology processing design and production Manufacturing Medical research, clinical (wholesaling) trials, and telemedicine Wholesaling/Distribution . For-profit training . Biotechnology research, programs in international development, production, business management or or sales environmental Aviation or maritime remediation repair or maintenance Telecommunications . Repair or maintenance of switching and delivery assistive technology systems equipment • Certain types of call ENTERPRISE centers . Wind energy producers a Eligible Businesses Enroll & Qualify Submit enrollment, End-of-the-Year, and other forms online to DBEDT to qualify for benefits. • Maintain hiring goals: "New" - Grow 1 0% first year, hold level for 6 years "Existing" - Grow 10% for Years 1 -3; 1 5% each year from Years 4-7 More than 50% of revenue from eligible business activity must be earned in the EZ. ENTERPK ZONES 4 9/17/2015 HOW TO ENROLL Must be located in an EZ designated zone Earn half of annual gross receipts from one or more of the EZ eligible activities Employ at least one full-time worker (Full-Time = 20 or more hours per week) 1.\I IHEKJ,1 3 ANNUAL CERTIFICATION Earn > 50% annual gross receipts from one or more of the EZ eligible activities from transactions occurring within the zone. Increase your staff "Existing"Business Ex.:Start with 10 Employees Yr 1 10% increase from application* (10% 1)11 Employees Yr 2 (maintain) 11 Employees Yr 3 (maintain) 11 Employees Yr 4 + 1 5%add to Year 3 1 2.5 Employees Yr 5 + 15%add to Year 4 14 Employees Yr 6 + 1 5%add to Year 5 1 5.5 Employees Yr 7 + 1 5%add to Year 6 17 Employees *Increase staff by 10%with a minimum of 1 employee Ag businesses may increase their gross sales by 2%each year! 1 N 1'I HIE ZONES . 3 5 9/17/2015 ANNUAL CERTIFICATION Increase your staff "New" Business Ex: Start with 10 Employees Yr 1 10% increase from application" (10%x 10 = 1) 11 Employees Yr 2 - 11 Employees Yr 3 - 11 Employees Yr 4 - 11 Employees Yr 5 - 11 Employees Yr 6 - 11 Employees Yr 7 11 Employees -Increase staff by 10%with a minimum of 1 employee Ag businesses may increase their gross sales by 2%each year! F.NTER PESR I s I WN Legislative Changes ( as of July 1 , 2008) Agricultural businesses 1 May increase gross sales by 2% annually rather than the hiring requirements 2. May use income from value-added products (retail and wholesale) towards certification Force majeure In the event of a natural disaster, agricultural producers and processors will receive EZ benefits Leased employees or joint employment contract i Employees may be counted as full time employees F'"' 3 6 9/17/2015 Legislative Changes (as of July 1 , 2009) Extended the EZ tax credits and exemptions, for businesses engaged in the manufacturing of tangible personal property or in the producing or processing of agricultural products, for an additional three years. Allow the receipts, sales, and employees of a business's establishments in all enterprise zones located within the same county to count towards qualification requirements. ENTERPRISE ZONES APPLICATION FOR, SELECTION CRITERIA, AND TERMINATION OF ENTERPRISE ZONE STATUS Eligibility-criteria for zone nomination: (a) Located within one 2010 United States census tract or two or more contiguous 2010 United States census tracts. Census tract(s) within which each enterprise zone is located shall meet at least one of the following: 7 9/17/2015 APPLICATION FOR, SELECTION CRITERIA, AND TERMINATION OF ENTERPRISE ZONE STATUS (1 ) At least 25% of the population of each census tract shall have a median family income below 80% of the median family income of the county in which the tract is located. And, APPLICATION FOR, SELECTION CRITERIA, AND TERMINATION OF ENTERPRISE ZONE STATUS (2) The unemployment rate in each census tract shall be at least 1 .5 times the state average unemployment rate. 8 9/17/2015 (1) MFI 80%of MFI Cut-off Income Ranges for Census Tract Eligibility Hawaii County $62,321 $49,857 $35,000-$49,999 Honolulu County $84,638 $67,710 $35,000-$49,999 Kauai County $74,671 $59,737 $35,000-$49,999 Maui County $74,940 $59,952 $35,000-$49,999 Based on the 2012(2008-2012)ACS(5-Year Estimate)-Median Family Criteria (2) Unemployment Rate based on the 2012(2008-2012)ACS (5-Year Estimate)is 6.7%. 1.5 X 6.7%=10.1%as the eligibility for the Unemployment criterion f - t, Al. Kauai Nahaa < / MM oo .i llea Cal, . .t._,.)� Maui State of Hawaii `1.1 Lana Y Enterprise Zones(EZ) Other census tracts eligible Kanooawe for inclusion in the EZ t, haw. N �� 0 5 50 /:�y Miles (1z.. ' e HAWAII+ -- -�. GISPROGRAM.' . i ..w, �� 9 9/17/2015 Hawaii County Pitt EZ Eligible Tracts i ei II; VA 4,P 4( e o io 2c,I 1 Miles 10,11101110611111, mis map was o,da.ea tV....u a Ronnyq(oP7Mpa�n�rq wNases :3Wo 1beused 2, :71;x. aoNvsrNid HAWAII r. � a STATEWIDE TA ia�peee ua�° 6 GIS MoweM ,�o PROGRAM Saint. se Zcrcs J_un as even Hawaii County t. Proposed Enterprise Zones 1111Prtigiiire 0 10 20 i1 i Mlles lirAIP 41161kr,.17-1 . f . 1 »a�v,r,��'gtil m HAWAII" STATEWIDE :gC'F GIRSM p,ns „ROGAM rscscseelEntenTSe Zones Hr..Corr.2015 10 9/17/2015 Hawaii County IJ�.,Fih I l Proposed Enterprise Zones EZ Eligible Tracts e a to . Miles e• , ..• Vj Irl Hilo-Pt u \Nt#00#4 , J 111111r: �' :'r `•eF11 a w�,e uniz a 1�lra pann 4—_,_,_,1 r Rvwa,mx uxatoreiM°�0mr�me iMeerom HAWAII%=====,. STATEWIOB m Tiler d,..°1-01-OK...."homa Mep Mo f0150W M'09/JI/i5 P" BigEle EvePrlse Zares Wfens.zEura. MAI-CALO ! Mark J. Ritchie & Wayne Thom DBEDT 250 S. Hotel St., 5t" Floor Honolulu, HI 96813 Tel: (808) 587-2757 E-mail: mark.j.Ritchie@dbedt.hawaii.gov wthom@dbedt.hawaii.gov Website: http://invest.Hawaii.gov/business/ez/ J ENT'ZLIEN PRISI 10 11