HOUSE OF REPRESENTATIVES |
H.B. NO. |
1809 |
THIRTY-FIRST LEGISLATURE, 2022 |
H.D. 3 |
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STATE OF HAWAII |
S.D. 1 |
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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
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 no 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 $ per
taxable year. No other tax credit shall
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) Every five years, 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 $
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 $
per year.
(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) A taxpayer may elect to reduce the eligible
credit amount by thirty per cent; provided that if this reduced amount exceeds
the amount of income tax payment due from the taxpayer, the excess of the
credit amount over payments due shall be refunded to the taxpayer; provided further
that no refund on account of the tax credit allowed by this section shall be made
for amounts less than $1.
The
election required by this subsection shall be made in a manner prescribed by
the director on the taxpayer's return for the taxable year in which the credit is
claimed. An election once made is
irrevocable.
(e) Before 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.
(f) The taxpayer shall provide written notice to
the director of taxation and 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.
(g) 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.
(h) 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 of 1986, as amended, with respect to a partner's distributive share.
(i) 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.
(j) The director of taxation:
(1) Shall prepare
forms that may be necessary to claim a credit under this section;
(2) May require the
taxpayer to furnish information to ascertain the validity of the claim for
credit made under this section; and
(3) May adopt rules pursuant to chapter 91 necessary to effectuate the purposes of this section.
(k) Each taxpayer, together with all of its related
entities, as determined under section 267(b) of the Internal Revenue Code of 1986,
as amended, and all business entities under common control, as determined under
sections 414(b), 414(c), and 1563(a) of the Internal Revenue Code of 1986, as amended,
shall not be eligible for more than a single ten-year credit period.
(l) The Hawaii state energy office shall exempt from disclosure any information collected pursuant to subsections (b), (e), and (f) to the extent it would adversely affect personal privacy rights or proprietary interests. Any disclosure of the information collected pursuant to subsections (b), (e), and (f) for public inspection and dissemination shall be consistent with the policies, procedures, and standards developed by the chief information officer and consistent with applicable law, including chapter 92F and other state and federal laws related to security and privacy.
(m) 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, including
wastewater; and
(10) Animal residues
and wastes that can be used to generate energy.
"Renewable fuels" means
fuels produced from renewable feedstocks; provided that the fuel:
(1) Is sold as a
fuel; and
(2) Meets 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;
(F) Bioenergy;
or
(G) 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. (SD1)
The summary description
of legislation appearing on this page is for informational purposes only and is
not legislation or evidence of legislative intent.