REPORT TITLE:
Taxation


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

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                        2872
HOUSE OF REPRESENTATIVES                H.B. NO.           
TWENTIETH LEGISLATURE, 2000                                
STATE OF HAWAII                                            
                                                             
________________________________________________________________
________________________________________________________________


                     A BILL FOR AN ACT

RELATING TO TAXATION.



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

 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
 
 5           ENERGY EFFICIENT CONSTRUCTION TAX CREDIT ACT
 
 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
 

 
Page 2                                                     2872
                                     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.
 

 
Page 3                                                     2872
                                     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
 

 
Page 4                                                     2872
                                     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
 

 
Page 5                                                     2872
                                     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.
 
15 
 
16                          INTRODUCED BY:______________________