A Report Title:

Renewable Energy Tax Credit

 

Description:

Establishes income tax credit for the installation of solar thermal, wind powered, and photovoltaic energy systems. Requires periodic review of State's energy efficiency policies.

THE SENATE

S.B. NO.

575

TWENTY-SECOND LEGISLATURE, 2003

 

STATE OF HAWAII

 


 

A BILL FOR AN ACT

 

relating to renewable energy investment tax credits.

 

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

SECTION 1. The energy efficiency policy task force was established by Act 163, Session Laws of Hawaii 1998, to explore and make recommendations to the legislature on the most cost-effective means of supporting increased energy efficiency and sustainability in Hawaii. The purpose of this Act is to implement recommendations of the task force to:

(1) Continue the energy conservation income tax credits; and

(2) Encourage the department of taxation to collect detailed data on tax credits to support future analyses and to prepare appropriate administrative rules.

Additionally, this measure requires a review of the State's energy efficiency policies in 2011 and every seven years thereafter to ensure periodic evaluation comparable to that conducted by the energy efficiency policy task force.

SECTION 2. Chapter 196, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"§196-   Energy efficiency policy review and evaluation. (a) The energy resources coordinator shall review and evaluate the State's energy efficiency policies and report findings and recommendations to the legislature no later than twenty days prior to the convening of the regular session of 2011 and every seven years thereafter.

(b) The review and evaluation shall include findings as to:

(1) The efficacy of section 235-   in order to determine whether the tax credits should be continued or enhanced based on impact and cost-benefit analysis or other public policy considerations;

(2) Whether the energy technology systems eligible for tax credits under section 235-   should be expanded, reduced, or remain the same; and

(3) Any other issue regarding energy technology systems identified during the seven-year review.

(c) The energy resources coordinator, in undertaking the review and evaluation, shall consult with representatives from:

(1) The department of business, economic development, and tourism;

(2) The solar, wind, and photovoltaic industries;

(3) The utilities industry;

(4) The building industry; and

(5) Any other professional or public sector group the energy resources coordinator deems appropriate."

SECTION 3. Chapter 235, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"§235-   Renewable energy technologies; income tax credit. (a) Each individual or corporate resident taxpayer who files an individual or corporate net income tax return for a taxable year may claim a tax credit under this section against the Hawaii state individual or corporate net income tax. The tax credit may be claimed for every eligible renewable energy technology system that is installed and placed in service by a taxpayer after June 30, 2003. The credit may be claimed as follows:

(1) For solar thermal:

(A) Single-family residential systems: thirty-five per cent of the actual cost, or $1,750, whichever is less;

(B) Multi-unit residential systems: thirty-five per cent of the actual cost, or $350 per unit, whichever is less; or

(C) Commercial systems: thirty-five per cent of the actual cost, or $500,000, whichever is less;

(2) For wind powered:

(A) Single–family residential systems: twenty per cent of the actual cost, or $1,500, whichever is less;

(B) Multi-unit residential systems: twenty per cent of the actual cost, or $200 per unit, whichever is less; or

(C) Commercial systems: twenty per cent of the actual cost, or $500,000, whichever is less; and

(3) For photovoltaic:

(A) Single-family residential systems: thirty-five per cent of the actual cost, or $5,000, whichever is less;

(B) Multi-unit residential systems: thirty-five per cent of the actual cost, or $350 per unit, whichever is less; or

(C) Commercial systems: thirty-five per cent of the actual cost, or $500,000, whichever is less;

provided that multiple owners of a single system shall be entitled to a single tax credit; and provided further that the tax credit shall be apportioned between the owners in proportion to their contribution to the cost of the system.

(b) For the purposes of this section:

"Actual cost" means costs related to the renewable energy technology systems under subsection (a), including their accessories and installation, and shall not include the cost of consumer incentive premiums unrelated to the operation of a system or offered with the sale of a system.

"Renewable energy technology system" means a system that captures and converts a renewable source of energy, such as wind, or heat or light of the sun into:

(1) A usable source of thermal or mechanical energy;

(2) Electricity; or

(3) Fuel.

"Solar thermal", as it refers to a renewable energy technology system and used in this section, means any identifiable facility, equipment, apparatus, or the like, that converts solar insolation to useful thermal or electrical energy for heating, cooling, or reducing the use of other types of energy that are dependent upon fossil fuel for energy generation.

"Wind powered", as it refers to a renewable energy technology system and used in this section, means any identifiable facility, equipment, apparatus, or the like, that converts wind energy to useful thermal or electrical energy for heating, cooling, or reducing the use of other types of energy that are dependent upon fossil fuel for energy generation.

(c) The dollar amount of any new federal energy tax credit similar to the credit provided in this section that is established after June 30, 2003, and any utility rebate, shall be deducted from the cost of the qualifying system and its installation before applying the state tax.

(d) The tax credit shall be claimed against net income tax liability for the year in which the renewable energy technology system was purchased and placed in use in Hawaii. 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 until exhausted.

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

(f) The department of taxation shall report to the legislature annually, no later than twenty days prior to the convening of each regular session, on the following:

(1) The number of energy technology systems that have qualified for a tax credit during the past year by technology type (solar thermal, wind powered, and photovoltaic), by installation type (single-family residential, multi-unit residential, and commercial), and by taxpayer type (corporate and individual); and

(2) The total cost of the tax credit to the State during the past year by technology type, installation type, and taxpayer type (corporate or individual), with descriptive statistics including mean, median, minimum, and maximum values and the standard deviation."

SECTION 4. New statutory material is underscored.

SECTION 5. This Act shall take effect upon its approval; provided that section 3 shall apply to taxable years beginning after December 31, 2002.

INTRODUCED BY:

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