HB2836 HD1

Report Title:

Energy Efficiency; Tax Credits

Description:

Implements the recommendations of the energy efficiency policy task force, including establishment of renewable energy technologies tax credit and energy review commission. (HD1)

HOUSE OF REPRESENTATIVES	H.B. NO.	2836
TWENTY-FIRST LEGISLATURE, 2002		H.D. 1
STATE OF HAWAII

A BILL FOR AN ACT

relating to energy.

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

SECTION 1. The purpose of this Act is to implement the recommendations of the energy efficiency policy task force, that was established by Act 163, Session Laws of Hawaii 1998, to explore and make recommendations to the legislature on the most cost-effective means of supporting increased energy efficiency and sustainability in Hawaii.

This Act among other matters, implements certain recommendations of the task force, including:

(1) Restricting tax credits to renewable energy technologies and recommend appropriate credit levels and dollar caps;

(2) Encouraging the department of taxation to collect detailed data on tax credits to support future analyses and to prepare appropriate administrative rules;

(3) Encouraging the department of human services to use federal funds from the low-income home energy assistance program to install energy saving devices;

(4) Providing and supporting efficiency and renewable energy education programs;

(5) Supporting utility energy efficiency and renewable energy programs; and

(6) Encourage the public utilities commission to continue to support increased energy efficiency and renewable resources.

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

"§235- Renewable energy technologies; income tax credit. (a) Each individual or corporate resident taxpayer that files an individual or corporate net income tax return for a taxable year, may claim a tax credit under this section against the Hawaii state individual or corporate net income tax. The tax credit may be claimed for every eligible renewable energy technology system that is installed and placed in service by a taxpayer after June 30, 2003. The tax credit may be claimed as follows:

(1) For solar thermal:

(A) Residential systems: thirty-five per cent of the actual cost or $1750, whichever is less;

(B) Multi-family systems: thirty-five per cent of the actual cost or $350 per family unit, whichever is less; or

(2) For wind powered:

(A) Residential systems: twenty per cent of the actual cost or $1500, whichever is less;

(B) Multi-family systems: twenty per cent of the actual cost or $200 per family unit, whichever is less; or

(3) For photovoltaic:

(A) Residential systems: thirty-five per cent of the actual cost or $5,000, whichever is less;

(B) Multi-family systems: thirty-five per cent of the actual cost or $350 per family unit, whichever is less; or

provided that multiple owners or a multi-family that own a single system shall be entitled to a single tax credit; provided further that the tax credit shall be apportioned between the owners or families in proportion to their contribution to the cost of the system.

(b) For the purposes of this section:

(1) "Actual cost" means costs related to the renewable energy technology systems under subsection (a), including its accessories and installation, and shall not include the cost of consumer incentive premiums unrelated to the operation of the system or offered with the sale of the system;

(2) "Renewable energy technology system" means a system that captures and converts a renewable source of energy, such as wind, sun (solar), or light (photovoltaic) into:

(A) A usable source of thermal or mechanical energy;

(B) Electricity; or

(3) "Solar or wind energy system" means any identifiable facility, equipment, apparatus, or the like that converts solar insolation or wind energy to useful thermal or electrical energy for heating, cooling, or reducing the use of other types of energy that are dependent upon fossil fuel for their generation.

(c) If federal energy tax credits similar to the credit provided in this section are in effect or established after June 30, 2003, the state tax credit provided in this section shall be reduced by the amount of the applicable federal energy tax credit.

(d) The tax credit shall be claimed against net income tax liability for the year in which the renewable energy technology system was purchased and placed in use in Hawaii. Tax credits that exceed the taxpayer's income tax liability may be used as credit against the taxpayer's income tax liability in subsequent years until exhausted.

(e) The director of taxation shall prepare such forms as may be necessary to claim a tax credit under this section. The director may also require the taxpayer to furnish reasonable information to ascertain the validity of the claim for credit made under this section and may adopt rules necessary to effectuate the purposes of this section pursuant to chapter 91.

(f) The department of taxation may report to the legislature annually, twenty days prior to the convening of every regular session on the following:

(1) The number of energy technology systems that have qualified for a tax credit during the past year by technology type (solar thermal, photovoltaic and wind), by installation type (residential, multi-unit residential and commercial), and by taxpayer type (corporate and individual); and

(2) The total cost of the tax credit to the State during the past year by technology type, by installation type, and by credit type, with descriptive statistics including mean, median, minimum and maximum values and the standard deviation."

SECTION 3. Chapter 196, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"§196- Energy efficiency policy review commission. (a) There is established an energy efficiency policy review commission consisting of nine members who shall be appointed by the governor with the advice and consent of the senate that shall be placed in the department of business, economic development, and tourism for administrative purposes. Except as provided to the contrary in this section, the members shall be appointed pursuant to section 26-34. The commission shall elect its chairperson from its membership. The members shall receive no compensation for their services but shall be reimbursed for their expenses, including travel expenses, incurred in the performance of their duties.

(b) A commission shall be appointed after January 1 but before July 1, 2010, and shall serve until submission of the report required under subsection (d). A new commission shall be appointed after January 1 but before every July 1, every seven years thereafter; provided that if any vacancy occurs in the membership of a commission prior to the completion of its duties or dissolution, the governor shall appoint a replacement member pursuant to this subsection and section 26-34. The commission shall meet from time to time as necessary to execute its duties.

In selecting the nine commission members, the governor shall ensure that there is representation from:

(1) The department of business, economic development, and tourism;

(2) The solar, wind, and photovoltaic industries;

(3) The utilities industry;

(4) The building industry; and

(5) Any other professional or public sector the governor deems appropriate.

(1) The efficacy of section 196- to determine whether the tax credits should be continued or enhanced based on impact and cost-benefit analyses;

(2) Whether the energy technology systems eligible for tax credits under section 196- should be expanded, reduced, or remain the same; and

(3) Any other issue the commission deems appropriate with respect to energy technology systems.

(d) The commission, with the assistance of the energy resources coordinator of the department of business, economic development, and tourism, shall report its findings and recommendations to the legislature no later than twenty days prior to the convening of the regular session of 2010, and every seven years thereafter."

SECTION 4. Section 26-18, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

"(a) The department of business, economic development, and tourism shall be headed by a single executive to be known as the director of business, economic development, and tourism.

The department shall undertake statewide business and economic development activities, undertake energy development and management, provide economic research and analysis, plan for the use of Hawaii's ocean resources, [~~and~~] encourage the development and promotion of industry and international commerce through programs established by law[.] and provide and support efficiency and renewable energy programs including education programs."

SECTION 5. Section 269-6, Hawaii Revised Statutes, is amended to read as follows:

"§269-6 General powers and duties. The public utilities commission shall have the general supervision hereinafter set forth over all public utilities, and shall perform the duties and exercise the powers imposed or conferred upon it by this chapter. Included among the general powers of the commission is the authority to adopt rules pursuant to chapter 91 necessary for the purposes of this chapter. The public utilities commission shall also support increased energy efficiency and renewable resources.

The chairperson of the commission may appoint a hearings officer, who shall not be subject to chapter 76, to hear and recommend decisions in any proceeding before it other than a proceeding involving the rates or any other matters covered in the tariffs filed by the public utilities. The hearings officer shall have the power to take testimony, make findings of fact and conclusions of law, and recommend a decision; provided that the findings of act, the conclusions of law, and the recommended decision shall be reviewed and may be approved by the commission after notice to the parties and an opportunity to be heard. The hearings officer shall have all of the above powers conferred upon the public utilities commission under section 269-10."

SECTION 6. Section 346-14, Hawaii Revised Statutes, is amended to read as follows:

"§346-14 Duties generally. Except as otherwise provided by law, the department of human services shall:

(1) Establish and administer programs and standards, and adopt rules as deemed necessary for all public assistance programs;

(2) Establish, extend, and strengthen services for the protection and care of abused or neglected children and children in danger of becoming delinquent to make paramount the safety and health of children who have been harmed or are in life circumstances that threaten harm;

(3) Establish and administer programs, and adopt rules as deemed necessary, for the prevention of domestic and sexual violence and the protection and treatment of victims of domestic and sexual violence;

(4) Assist in preventing family breakdown;

(5) Place, or cooperate in placing, abused or neglected children in suitable private homes or institutions and place, or cooperate in placing, children in suitable adoptive homes;

(6) Have authority to establish, maintain, and operate receiving homes for the temporary care and custody of abused or neglected children until suitable plans are made for their care; and accept from the police and other agencies, for temporary care and custody, any abused or neglected child until satisfactory plans are made for the child;

(7) Administer the medical assistance programs for eligible public welfare and other medically needy individuals by establishing standards, eligibility, and health care participation rules, payment methodologies, reimbursement allowances, systems to monitor recipient and provider compliance, and assuring compliance with federal requirements to maximize federal financial participation;

(8) Cooperate with the federal government in carrying out the purposes of the Social Security Act and in other matters of mutual concern pertaining to public welfare, public assistance, and child welfare services, including the making of reports, the adoption of methods of administration, and the making of rules as are found by the federal government, or any properly constituted authority thereunder, to be necessary or desirable for the efficient operation of the plans for public welfare, assistance, and child welfare services or as may be necessary or desirable for the receipt of financial assistance from the federal government;

(9) Carry on research and compile statistics relative to public and private welfare activities throughout the State, including those dealing with dependence, defectiveness, delinquency, and related problems;

(10) Develop plans in cooperation with other public and private agencies for the prevention and treatment of conditions giving rise to public welfare problems;

(11) Adopt rules governing the procedure in hearings, investigations, recording, registration, determination of allowances, and accounting and conduct other activities as may be necessary or proper to carry out this chapter;

(12) Supervise or administer any other activities authorized or required by this chapter, including the development of the staff of the department through in-service training and educational leave to attend schools and other appropriate measures, and any other activities placed under the jurisdiction of the department by any other law;

(13) Make, prescribe, and enforce policies and rules governing the activities provided for in section 346-31 it deems advisable, including the allocation of moneys available for assistance to persons assigned to work projects among the several counties or to particular projects where the apportionment has not been made pursuant to other provisions of law, if any, governing expenditures of the funds;

(14) Determine the appropriate level for the Hawaii security net, by developing a tracking and monitoring system to determine what segments of the population are not able to afford the basic necessities of life, and advise the legislature annually regarding the resources required to maintain the security net at the appropriate level;

(15) Subject to the appropriation of state funds and availability of federal matching assistance, expand optional health care to low-income persons as follows:

(A) Pregnant women and infants under one year of age living in families with incomes up to one hundred eighty-five per cent of the federal poverty level and without any asset restrictions;

(B) Children under six years of age living in families with incomes up to one hundred thirty-three per cent of the federal poverty level and without any asset restrictions;

(D) Elder persons;

(E) Aliens;

(F) The homeless; and

(G) Other handicapped and medically needy persons; [~~and~~]

(16) Subject to the appropriation of state funds and availability of federal matching assistance, establish the income eligibility level for the medically needy program at one hundred thirty-three per cent of the assistance allowance[.]; and

(17) To the greatest extent possible, utilize federal funds from the low-income home energy assistance program to install energy saving devices."

SECTION 7. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 8. This Act shall take effect upon its approval; provided that section 2 shall apply to taxable years beginning after December 31, 2002.