HOUSE OF REPRESENTATIVES |
H.B. NO. |
1809 |
THIRTY-FIRST LEGISLATURE, 2022 |
H.D. 1 |
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STATE OF HAWAII |
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A BILL FOR AN ACT
RELATING TO TAXATION.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
SECTION 1. Chapter 235, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:
"§235- Renewable fuels production tax credit. (a)
Each year during the credit period there shall be allowed to each
taxpayer subject to the taxes imposed by this chapter a renewable fuels
production tax credit that shall be applied to the taxpayer's net income tax
liability, if any, imposed by this chapter for the taxable year in which the
credit is properly claimed.
For each taxpayer producing
renewable fuels, the annual dollar amount of the renewable fuels production tax
credit during the ten-year credit period shall be equal to 20 cents per
seventy-six thousand British thermal units of renewable fuels using the lower
heating value produced for distribution in the State; provided that the
taxpayer's production of renewable fuels is not less than fifteen billion
British thermal units of renewable fuels per year; provided further that the
amount of the tax credit claimed under this section by a taxpayer shall not
exceed $3,000,000 per taxable year. No other
tax credit may be claimed under this chapter for the costs related to renewable
fuels production that are used to properly claim a tax credit under this
section for the taxable year.
(b) The Hawaii state energy office shall:
(1) Verify the
amount and type of renewable fuels produced, including the purpose for which
the fuel was produced;
(2) Total all
renewable fuels production that the Hawaii state energy office certifies for
purposes of paragraph (3);
(3) Certify the
total amount of the tax credit for each taxable year and the cumulative amount
of the tax credit during the credit period; and
(4) Certify that the
renewable fuels produced have life cycle emissions substantially below that of fossil
fuels.
Upon each determination, the Hawaii
state energy office shall issue a certificate to the taxpayer verifying the
amount of renewable fuels produced, the credit amount certified for each
taxable year, and the cumulative amount of the tax credit during the credit
period. The taxpayer shall file the
certificate with the taxpayer's tax return with the department of taxation. Notwithstanding the Hawaii state energy
office's certification authority under this section, the director of taxation
may audit and adjust the certification to conform to the facts.
If in any year, the annual amount
of certified credits reaches $6,000,000 in the aggregate, the Hawaii state
energy office shall immediately discontinue certifying credits and notify the
department of taxation. In no instance
shall the total amount of certified credits exceed $6,000,000 per year. Notwithstanding any other law to the
contrary, the verification and certification information compiled by the Hawaii
state energy office shall be available for public inspection and dissemination
under chapter 92F.
(c) If the credit under this section exceeds the
taxpayer's net income tax liability, the excess of the credit over liability
may be used as a credit against the taxpayer's net income tax liability in
subsequent years until exhausted. All
claims for a credit under this section shall be properly filed on or before the
end of the twelfth month following the close of the taxable year for which the
credit may be claimed. Failure to comply
with the foregoing provision shall constitute a waiver of the right to claim
the credit.
(d) Prior to production of any renewable fuels
for the year, the taxpayer shall provide written notice of the taxpayer's
intention to begin production of renewable fuels. The information shall be provided to the
department of taxation and the Hawaii state energy office on forms provided by
the Hawaii state energy office and shall include information on the taxpayer,
facility location, facility production capacity, anticipated production start
day, and taxpayer's contact information.
Notwithstanding any other law to the contrary, the taxpayer and facility
information shall be available for public inspection and dissemination under
chapter 92F.
(e) The taxpayer shall provide written notice to
the director of taxation and the chief energy officer of the Hawaii state
energy office within thirty days following the start of production of any
renewable fuels. The notice shall
include the production start date and expected renewable fuels production for
the next twelve months. Notwithstanding
any other law to the contrary, this production information shall be available
for public inspection and dissemination under chapter 92F.
(f) Each calendar year during the credit period,
the taxpayer shall provide information to the chief energy officer of the
Hawaii state energy office on:
(1) The number of
British thermal units of renewable fuels produced and sold during the previous
calendar year;
(2) The type of
fuels produced;
(3) Renewable feedstocks
used for renewable fuels production;
(4) The number of
employees of the facility and each employee's state of residency; and
(5) The projected
number of British thermal units of renewable fuels production for the
succeeding year.
(g) In the case of a partnership, S corporation,
estate, or trust, distribution and share of the renewable fuels production tax
credit shall be determined pursuant to section 704(b) of the Internal Revenue
Code, with respect to a partner's distributive share.
(h) Following each year in which a credit under
this section has been claimed, the chief energy officer of the Hawaii state
energy office shall submit a written report to the governor and legislature
regarding the production and sale of renewable fuels. The report shall include:
(1) The number,
location, and production of renewable fuels production facilities in the State
and outside the State that have claimed a credit under this section;
(2) The total
number of British thermal units of renewable fuels, itemized by type of fuel
produced and sold during the previous year; and
(3) The projected
number of British thermal units of renewable fuels production for the
succeeding year.
(i) The director of taxation shall prepare forms that may be necessary to claim a credit under this section. The director of taxation may require the taxpayer to furnish information to ascertain the validity of the claim for credit made under this section and may adopt rules, pursuant to chapter 91, necessary to effectuate the purposes of this section.
(j) As used in this section:
"Credit period" means a
maximum period of ten consecutive years, beginning from the first taxable year
in which a taxpayer begins renewable fuels production at a level of at least fifteen
billion British thermal units of renewable fuels per year.
"Net income tax
liability" means income tax liability reduced by all other credits allowed
under this chapter.
"Renewable feedstocks"
means:
(1) Biomass crops;
(2) Agricultural
residue;
(3) Oil crops, including
but not limited to algae, canola, jatropha, palm, soybean, and sunflower;
(4) Sugar and
starch crops, including but not limited to sugar cane and cassava;
(5) Other
agricultural crops;
(6) Grease and
waste cooking oil;
(7) Food wastes;
(8) Municipal solid
wastes and industrial wastes;
(9) Water; and
(10) Animal residues
and wastes that can be used to generate energy.
"Renewable fuels" means
fuels produced from renewable feedstocks; provided that:
(1) The fuels shall
be sold as a fuel; and
(2) The fuels meet
the relevant ASTM International specifications for the particular fuel or other
industry specification for the particular fuel or other industry specifications
for liquid or gaseous fuels, including but not limited to:
(A) Methanol,
ethanol, or other alcohols;
(B) Hydrogen;
(C) Biodiesel
or renewable diesel;
(D) Biogas;
(E) Other
biofuels; or
(F) Renewable
jet fuel or renewable gasoline."
SECTION 2. New statutory material is underscored.
SECTION 3. This Act shall take effect on July 1, 2100.
Report Title:
Renewable Fuels Production; Income Tax Credit
Description:
Establishes a renewable fuels production tax credit. Effective 7/1/2100. (HD1)
The summary description
of legislation appearing on this page is for informational purposes only and is
not legislation or evidence of legislative intent.