SB2376

SECTION 1. Section 235-110.32, Hawaii Revised Statutes, is amended as follows:

1. By amending subsection (a) to read:

"(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 for which qualified renewable fuel production costs are incurred within the State and sold for distribution in the State; provided that the taxpayer's production of renewable fuels is not less than two billion five hundred million British thermal units of renewable fuels per calendar year; provided further that the amount of the tax credit claimed under this section by a taxpayer shall not exceed $3,500,000 per taxable year; provided further that the tax credit shall only be claimed for fuels with lifecycle emissions below that of fossil fuels. No other tax credit may be claimed under this chapter for the costs incurred to produce the renewable fuels that are used to properly claim a tax credit under this section for the taxable year.

Each taxpayer, together with all of its related entities as determined under section 267(b) of the Internal Revenue Code and all business entities under common control, as determined under sections 414(b), 414(c), and 1563(a) of the Internal Revenue Code, shall [~~not~~] be eligible for [~~more than a single~~] a separate ten-year credit period[.] for each separate qualified renewable fuels production that meets the eligibility requirements of this section."

2. By amending subsection (c) to read:

"(c) No later than [~~thirty~~] ninety days following the close of the calendar year, every taxpayer claiming a credit under this section shall complete and file an independent, third-party certified statement, at the taxpayer's sole expense, with and in the form prescribed by the Hawaii state energy office, providing the following information:

(1) The type, quantity, and British thermal unit value, using the lower heating value, of each qualified fuel, broken down by the type of fuel, produced and sold during the previous calendar year;

(2) The feedstock used for each type of qualified fuel;

(3) The proposed total amount of credit to which the taxpayer is entitled for each calendar year and the cumulative amount of the tax credit the taxpayer received during the credit period;

(4) The number of full-time and number of part-time employees of the facility [~~and those employees' states of residency, totaled per state~~];

(5) The number and state location of all renewable fuel production facilities [~~within and outside of the State~~]; and

(6) The lifecycle greenhouse gas emissions per British thermal units for each type of qualified fuel produced."

3. By amending subsections (f) and (g) to read:

"(f) The total amount of tax credits allowed under this section shall not exceed $20,000,000 for all eligible taxpayers in any calendar year. In the event that the credit claims under this section exceed $20,000,000 for all eligible taxpayers in any given calendar year, the $20,000,000 shall be divided between all eligible taxpayers for that year in proportion to the total amount of renewable fuels produced by all eligible taxpayers. Upon reaching $20,000,000 in the aggregate, the Hawaii state energy office shall immediately discontinue issuing certificates and notify the department of taxation. In no instance shall the total dollar amount of certificates issued exceed $20,000,000 per calendar year[.]; provided that, if the total amount of credits applied for in any particular year exceeds the aggregate amount of credits allowed for that year under this section, the excess shall be treated as having been applied for in the subsequent year and shall be claimed in the subsequent year.

(g) Notwithstanding any other law to the contrary, the information collected and compiled by the Hawaii state energy office under subsections (c) and (d) for the purposes of the renewable fuels production tax credit shall be available for public inspection and dissemination, subject to chapter 92F[.]; provided that any information under subsections (c), (d), (k), and (l) identifying the specific location of a renewable fuel production facility, or information that is determined to constitute critical energy infrastructure information pursuant to section 215A(d) of the Federal Power Act (16 U.S.C. 824o-1), the disclosure of which could reasonably be expected to jeopardize the security, safety, or operational resilience of critical energy infrastructure, shall be treated as confidential and exempt from public disclosure."

4. By amending subsection (k) to read:

"(k) Before the production of any renewable fuels for the calendar year, the taxpayer shall provide written notice of the taxpayer's intention to begin production of renewable fuels. The written notice shall be provided to the department of taxation and the Hawaii state energy office and shall include information on the taxpayer, state facility location, facility production capacity, anticipated production start date, and the taxpayer's contact information. Notwithstanding any other law to the contrary, the written notice described in this subsection, including taxpayer and facility information, shall be available for public inspection and dissemination, subject to chapter 92F."

5. By amending subsection (m) to read:

"(m) Following each calendar 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 and state location 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 calendar year; and

(3) The projected number of British thermal units of renewable fuels production for the succeeding year."

SECTION 2. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 3. This Act, upon its approval, shall apply to taxable years beginning after December 31, 2025.

INTRODUCED BY:	_____________________________

THE SENATE	S.B. NO.	2376
THIRTY-THIRD LEGISLATURE, 2026
STATE OF HAWAII