Report Title:

Ethanol Investment tax credit.

Description:

Broadens the definition of "investment" which is covered by the tax credit.

HOUSE OF REPRESENTATIVES

H.B. NO.

1408

TWENTY-SECOND LEGISLATURE, 2003

 

STATE OF HAWAII

 


 

A BILL FOR AN ACT

 

relating to ethanol investment tax credit.

 

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

SECTION 1. Section 235-110.3, Hawaii Revised Statutes, is amended by amending subsection (b) to read as follows:

(b) As used in this section:

"Credit period" means[a]:

(1) A maximum period of eight years for facilities with a total investment of less than $50,000,000[, and, a]; and

(2) A maximum period of ten years for facilities with a total investment equal to or greater than $50,000,000, beginning from the first taxable year in which the credit is properly claimed.

"Investment" means a nonrefundable capital expenditure [directly] related to the development and construction of any qualifying ethanol production facility[, exclusive of land costs.] in accordance with section 1.263A-1(e) through (h) of the Internal Revenue Code. For purposes of this section, qualifying costs shall include costs associated with:

(1) The receipt and storage of feedstock, including associated pumps and pipelines;

(2) Processing of feedstock, including dilution and clarification;

(3) Yeast propagation or enzyme preparation and fermentation, distillation, and dehydration;

(4) Utilities, including water treatment systems, cooling towers, package boilers and associated equipment, and electricity generation, including generators, turbines, or both;

(5) By-products and waste treatment and distribution, consisting of storage tanks or storage reservoirs, associated pumps and pipelines, and waste distribution equipment; and

(6) Finished product storage, consisting of shift tanks and finished product storage tanks, including associated pumps and pipelines;

but shall not include land costs.

For purposes of this section, investment includes any investment for which the taxpayer is at risk, as that term is used in section 465 of the Internal Revenue Code (with respect to deductions limited to amount at risk).

"Maximum annual credit allowable" means the total credit allowed under subsection (a) claimed against the taxpayer's net income tax liability for any taxable year; provided that the qualifying ethanol facility operated in such taxable year at a level of production of at least seventy-five per cent of its nameplate capacity on an annualized basis.

"Nameplate capacity" means the qualifying ethanol facility's production design capacity, in gallons of ethanol per year, based on an assumed operating year of three hundred fifty days.

"Net income tax liability" means net income tax liability reduced by all other credits allowed under this chapter.

"Qualifying ethanol production" means ethanol produced from renewable, organic feedstocks, or waste materials, including municipal solid waste. All qualifying production shall be fermented, distilled, and dehydrated at the facility.

"Qualifying ethanol production facility" means a facility located in Hawaii which produces motor fuel grade ethanol meeting the minimum specifications by the American Society of Testing and Materials standard D-4806, as amended."

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

SECTION 3. This Act shall take effect on July 1, 2003; provided that section 1 shall apply to taxable years beginning after December 31, 2003.

INTRODUCED BY:

_____________________________