Report Title:

Tax Credit; Alternative Energy Sources

Description:

Provides a tax credit for the development of alternative energy sources.

HOUSE OF REPRESENTATIVES

H.B. NO.

2703

TWENTY-THIRD LEGISLATURE, 2006

 

STATE OF HAWAII

 


 

A BILL FOR AN ACT

 

RELATING TO ALTERNATIVE ENERGY SOURCES.

 

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- Alternative energy tax credit. (a) There shall be allowed to each resident individual or corporate taxpayer who is not claimed or is not otherwise eligible to be claimed as a dependent by another taxpayer for federal or Hawaii state income tax purposes an alternative energy tax credit, which shall be deductible from the taxpayer's net income tax liability imposed by this chapter or chapter 237 for the taxable year in which the tax credit is properly claimed.

(b) The tax credit shall apply to eligible costs related to the development of alternative energy sources in the State. The amount of the tax credit shall be       per cent of the eligible costs expended by the taxpayer.

(c) To qualify for the income tax credit, the taxpayer shall be in compliance with all applicable federal, state, and county statutes, rules, and regulations.

(d) If the tax credit under this section exceeds the taxpayer's net income tax liability under this chapter or chapter 237, any excess of the tax credit may be used as a credit against the taxpayer's income tax liability in subsequent taxable years until exhausted.

(e) If the taxpayer is a partnership, S corporation, estate, or trust, the tax credit is for costs incurred by the entity for the taxable year. The costs upon which the tax credit is computed shall be determined at the entity level. Distribution and share of the tax credit shall be determined pursuant to section 235-110.7.

(f) If at any time during the period in which the tax credits are earned under this section, the taxpayer no longer qualifies for the tax credit, the tax credits claimed under this section shall be recaptured. The recapture shall be equal to        per cent of the total tax credits claimed under this section. The amount of the recaptured tax credits shall be added to the taxpayer's tax liability for the taxable year in which the recapture occurs.

(g) As used in this section:

"Alternative energy sources" means energy from a source or process that does not use fossil or nuclear fuel, including solid waste, wind, geothermal, solar or ocean waves, tides or currents, bio-conversion, hydro-electric, thermal conversion, or osmosis. Alternative energy source does not mean nuclear fission.

(h) Every claim, including amended claims, for the tax credit under this section shall be filed on or before the end of the twelfth month following the close of the taxable year for which the tax credit may be claimed. Failure to meet the filing requirements of this subsection shall constitute a waiver of the right to claim the tax credit.

(i) The director of taxation shall prepare such forms as may be necessary to claim a tax credit under this section, may require proof of the claim for the tax credit, and may adopt rules pursuant to chapter 91 to effectuate the purposes of this section.

(j) The department of taxation shall report to the legislature annually, no later than twenty days prior to the convening of every regular session, on the number of taxpayers claiming the tax credit and the total cost of the tax credit to the State during the past year."

SECTION 2. New statutory material is underscored.

SECTION 3. This Act, upon its approval, shall apply to taxable years beginning after December 31, 2005.

INTRODUCED BY:

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