Report Title:

Alternative Energy; Tax Credit; Hydrogen

Description:

Provides a tax credit for the total cost of a hydrogen system placed into service after 12/31/04 and before 1/1/14 that has an unspecified nameplate capacity. (SD1)

THE SENATE

S.B. NO.

2080

TWENTY-SECOND LEGISLATURE, 2004

S.D. 1

STATE OF HAWAII

 


 

A BILL FOR AN ACT

 

RELATING TO TAXATION.

 

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

SECTION 1. The legislature finds that hydrogen is the simplest element and the most abundant element in the universe and is a viable alternative to hydrocarbon fuels, such as gasoline. To that end, the legislature acknowledges that the state of Hawaii has grown increasingly reliant upon fossil fuels over the last thirty years, with imported crude oil and finished petroleum products accounting for more than ninety per cent of the State's energy needs. Therefore, the legislature recognizes the need to promote hydrogen research and development through providing a means by which the hydrogen infrastructure can be developed. The purpose of this Act is to establish a tax credit to enhance hydrogen production in Hawaii.

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

"§235- Hydrogen system investment tax credit. (a) When the requirements of this section are met, 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 against the Hawaii state individual or corporate net income tax. The tax credit is equal to per cent of the total cost of each eligible hydrogen system that is installed or placed into service by a taxpayer after December 31, 2004, but before January 1, 2014. The tax credit shall apply only to the actual cost of the hydrogen system, its accessories, and its installation.

(b) The tax credit shall apply only to a hydrogen system that has a nameplate capacity of at least kilograms for hydrogen in a liquid state and at least standard cubic feet for hydrogen in a gaseous state.

(c) The tax credit shall be claimed against the net income tax liability for the year in which the hydrogen system was purchased and placed in use in Hawaii.

(d) Tax credits that exceed the taxpayer's income tax liability may be used as a credit against the taxpayer's income tax liability in subsequent years without restriction until exhausted.

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

(f) As used in this section:

"Hydrogen system" means any new or existing facility that produces hydrogen in either a liquid or gaseous state or any new or existing facility that produces fuel cells.

"Nameplate capacity" means the qualifying hydrogen system production design capacity, in kilograms per year for hydrogen in a liquid state and a standard cubic feet per year for hydrogen in a gaseous state, based on an assumed operating year of three hundred fifty days.

"Standard cubic feet" means 0.00251 kilograms at atmospheric pressure and twenty degrees centigrade."

SECTION 3. New statutory material is underscored.

SECTION 4. This Act, upon its approval, shall apply to taxable years beginning after December 31, 2004; provided that this Act shall be repealed on January 1, 2014.