Tax credit for all construction work deemed energy efficient by
the County Building Department. 

HOUSE OF REPRESENTATIVES                H.B. NO.           
TWENTIETH LEGISLATURE, 2000                                
STATE OF HAWAII                                            

                     A BILL FOR AN ACT



 1      SECTION 1.  The Hawaii Revised Statutes is amended by adding
 2 a new chapter to be appropriately designated and to read as
 3 follows:
 4                             "CHAPTER
 6        -1  General definitions.  Whenever used in this chapter
 7 unless the context otherwise requires:
 8      "Construction" means the process of building, altering,
 9 repairing, improving, demolishing, or adding an energy efficient
10 measure to any structure or building, or other improvements of
11 any kind to any real property.  The term includes the routine
12 operation, routine repair, and routine maintenance of an energy
13 efficient measure to existing structures, buildings, or real
14 property.
15      "Corporation" means the same as in the Internal Revenue
16 Code.  A "domestic corporation" is one organized under the laws
17 of the State.  A "foreign corporation" is any other corporation.
18      "Energy efficient measure" means any construction that
19 reduces energy costs in an amount sufficient to recover the total
20 cost of purchasing and installing such measure over an

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                                     H.B. NO.           

 1 appropriate period of time and maintains or reduces nonrenewable
 2 energy consumption.
 3      "Gross income", "adjusted gross income", "ordinary income",
 4 "ordinary loss", and "taxable income" respectively, means the
 5 same as gross income, adjusted gross income, ordinary income,
 6 ordinary loss, and taxable income as defined and determined under
 7 the Internal Revenue Code, except as otherwise provided in this
 8 chapter.
 9      "Includes" and "including" when used in a definition shall
10 not be deemed to exclude other things otherwise within the
11 meaning of the term defined.
12      "Partnership" means the same as in the Internal Revenue
13 Code.
14      "Person" includes an individual, a trust, estate,
15 partnership, association, company, or corporation.
16      "Taxpayer" means a person subject to a tax imposed by the
17 State of Hawaii.
18        -2  Purpose.  The purpose of this Act is to reduce
19 Hawaii's dependence on fossil fuel consumption by promoting the
20 construction of energy efficient structures and the use of
21 renewable energy.  The long-term benefits of alternate energy
22 sources include reduced fossil fuel costs, lessened impact on
23 global warming, and reduced energy costs.

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                                     H.B. NO.           

 1          -3 Energy efficiency determination.  The determination
 2 of what portion of the construction constitutes an energy
 3 efficiency measure shall be made by the county building
 4 department.  The determination is to include the percentage of
 5 energy efficiency measures in relation to the entire construction
 6 project.
 7        -4  Construction tax credit.(a)  There shall be
 8 allowed to each taxpayer subject to the taxes imposed by chapters
 9 235, 237, 237D, and 239, a contruction tax credit, which shall be
10 available to reduce the taxpayer's net income tax liability,
11 general excise tax, transient accommodations tax, or public
12 service company tax imposed by these chapters.
13      (b)  The amount of the tax credit shall be determined by
14 multiplying the dollar value of the portion of the total
15 construction cost paid by the taxpayer in the taxable year that
16 is deemed to be energy efficient by the county building
17 department by   percent.
18      (c)  The tax credit allowed under this chapter may be taken
19 over a period not to exceed ten consecutive taxable years.  The
20 taxpayer shall elect the period and annual allocation of the tax
21 credit in the initial year for which the credit is claimed.
22      (d)  In the case of a partnership, S corporation, estate, or
23 trust, the allowable tax credit is for construction costs

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                                     H.B. NO.           

 1 incurred by the entity for the taxable year.  The costs upon
 2 which the tax credit is computed shall be determined at the
 3 entity level.  Distribution and share of the tax credit shall be
 4 determined by rules adopted pursuant to section     -5.
 5      (e)  If a deduction is taken under section 179 (with respect
 6 to election to expense depreciable business assets) of the
 7 Internal Revenue Code of 1986, as amended, no tax credit shall be
 8 allowed for that portion of the construction costs for which the
 9 deduction is taken.
10      (f)  The basis of eligible property for depreciation or
11 accelerated cost recovery system purposes for state income taxes
12 shall be reduced by the amount of credit allowed and claimed
13 under this chapter.
14      (g)  The tax credit allowed under this chapter shall be
15 claimed against any or all net income tax liability, general
16 excise tax, transient accommodations tax, or public service
17 company tax for the taxable years over which the credit is
18 claimed.
19       -5 Forms; rules.  The director of taxation shall
20 prepare forms as may be necessary to claim a tax credit under
21 this chapter.  The director of taxation may also require the
22 taxpayer to furnish information to ascertain the validity of a
23 claim for a tax credit made under this chapter and may adopt

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                                     H.B. NO.           

 1 rules necessary to effectuate the purposes of this chapter
 2 pursuant to Hawaii Revised Statutes chapter 91.
 3       -6 No refund; failure to file.  If the amount of the
 4 tax credit claimed in any year exceeds the total of the
 5 taxpayer's net income tax liability, general excise tax,
 6 transient accommodations tax, or public service comply tax
 7 payable for that taxable year, the excess of credit over
 8 liability shall not be refunded to the taxpayer.  All claims for
 9 a tax credit under this chapter shall be filed on or before the
10 end of the twelfth month following the close of the initial
11 taxable year for which the credit may be claimed.  Failure to
12 comply with this section shall constitute a waiver of the right
13 to claim the credit.
14      SECTION 2.  This Act shall take effect upon its approval.
16                          INTRODUCED BY:______________________