Electric Vehicle; Tax Credit

Establishes a tax credit for the purchase of an electric vehicle
and a tax deduction for the installation of an electric vehicle
charging station.

THE SENATE                              S.B. NO.           2531
TWENTIETH LEGISLATURE, 2000                                
STATE OF HAWAII                                            

                   A  BILL  FOR  AN  ACT



 1      SECTION 1.  The legislature finds that the State relies
 2 primarily on the consumption of imported oil to satisfy its
 3 energy needs.  The legislature further finds that because oil is
 4 a limited resource, the State must develop and implement
 5 mechanisms to reduce the consumption of oil and other petroleum-
 6 based products in Hawaii.
 7      The legislature further finds that the residents of the
 8 State consume a large quantity of petroleum-based products for
 9 motor vehicle use.  In 1998, there were approximately nine
10 hundred thousand registered motor vehicles on Hawaii's roads and
11 highways.  That same year, highway fuel consumption exceeded four
12 hundred twenty million gallons.  This consumption level is not
13 only a threat to energy security, but it also generates massive
14 quantities of hydrocarbons, volatile organic compounds, carbon
15 monoxide, nitrogen oxides, and greenhouse gases, making the
16 transportation sector the largest single source of air pollution.
17      One possible mechanism for reducing the consumption of
18 petroleum products is to promote the use of newer technologies in
19 everyday life.  The legislature recognizes that many advances

Page 2                                                     
                                     S.B. NO.           2531

 1 have already been made in the field of transportation.  The
 2 emergence of alternatives to fossil-fueled vehicles has the
 3 potential to significantly reduce our dependency on petroleum-
 4 based products.
 5      The State previously established a policy to support the
 6 development and widespread consumer acceptance of electric
 7 vehicles within the State.  This Act is intended to accelerate
 8 the use of a substantial number of electric vehicles in the State
 9 to attain significant reductions in air pollution, improve air
10 energy efficiency in transportation, and reduce the State's
11 dependence on imported oil or petroleum products.  By matching
12 the federal tax credit provided under the Energy Policy Act of
13 1992, the State will encourage auto manufacturers to accelerate
14 the marketing of electric vehicles in the State and encourage
15 consumers to operate electric vehicles.
16      The purpose of this Act is to:
17      (1)  Improve the transportation of people and goods through
18           the expanded use of electric vehicles by undertaking a
19           program of financial incentives designed to promote the
20           purchase or lease of these vehicles;
21      (2)  Lessen the State's dependence on imported petroleum
22           products through greater reliance on vehicles that
23           utilize domestically-produced electricity as a source

Page 3                                                     
                                     S.B. NO.           2531

 1           of energy; and
 2      (3)  Preserve and enhance the State's air quality by
 3           encouraging the widespread use of vehicles that are
 4           emissions-free in their operation.  
 5      SECTION 2.  Chapter 235, Hawaii Revised Statutes, is amended
 6 by adding two new sections to be appropriately designated and to
 7 read as follows:
 8      "235-    Electric vehicle tax credit.  (a)  Any taxpayer
 9 who files an individual or corporate income tax return for a
10 taxable year may claim an income tax credit under this section
11 against the Hawaii state individual net income tax.
12      (b)  The tax credit shall be ten per cent of the purchase
13 price of an electric vehicle, up to a maximum of $4,000 per
14 vehicle; provided that the taxpayer purchases one or more
15 electric vehicles in the taxable year for which the credit is
16 properly claimed; and provided further that the electric vehicle
17 is being put into service for the first time during that taxable
18 year.
19      (c)  For purposes of this section "electric vehicle" means a
20 motor vehicle fueled by electric power that is authorized to
21 operate on roads or highways, but does not mean an off-road
22 vehicle, hybrid vehicle, conversion vehicle, or bicycle.
23      (d)  If the tax credit claimed by the taxpayer under this

Page 4                                                     
                                     S.B. NO.           2531

 1 section exceeds the amount of the income tax payments due from
 2 the taxpayer, the excess of credit over payments due shall be
 3 refunded to the taxpayer; provided that the tax credit properly
 4 claimed by a taxpayer who has no income tax liability shall be
 5 paid to the taxpayer; and provided that no refunds or payments on
 6 account of the tax credit allowed by this section shall be made
 7 for amounts less than $1.
 8      (e)  The director of taxation shall prepare the forms
 9 necessary to claim a credit under this section, may require proof
10 of the claim for the tax credit, and may adopt rules pursuant to
11 chapter 91.
12      (f)  All of the provisions relating to assessments and
13 refunds under this chapter and under section 231-23(c)(1) shall
14 apply to the tax credit under this section.
15      (g)  Claims for the tax credit under this section, including
16 any amended claims, shall be filed on or before the end of the
17 twelfth month following the taxable year for which the credit may
18 be claimed.
19      (h)  This section shall not apply to taxable years beginning
20 after December 31, 2004.
21      235-    Deduction for installation of electric vehicle
22 charging station.  (a)  Any taxpayer who files an individual or
23 corporate income tax return for a taxable year may claim a

Page 5                                                     
                                     S.B. NO.           2531

 1 deduction from adjusted gross income, up to a maximum of $30,000,
 2 for the installation of an electric vehicle charging station
 3 situated on property owned by the taxpayer; provided that the
 4 electric vehicle charging station is being put into service for
 5 the first time during the taxable year in which installation is
 6 completed.  Electric vehicle shall be as defined in section
 7 235-  .
 8      (b)  This section shall not apply to taxable years beginning
 9 after December 31, 2004."
10      SECTION 3.  The director of taxation shall review the usage
11 of the tax incentives provided under section 2 of this Act every
12 two years and submit findings to the legislature no later than
13 twenty days before the convening of the regular session of 2004.
14 The director's report shall include any recommendations for the
15 continuation of the tax credit and tax deduction and the
16 appropriate amounts or levels thereof.
17      SECTION 4.  New statutory material is underscored.
18      SECTION 5.  This Act shall take effect upon its approval;
19 provided that section 2 of this Act shall apply to taxable years
20 beginning after December 31, 1999.
22                       INTRODUCED BY:  ___________________________