Report Title:

Alternative Energy Systems Tax Credit; Extension and Increase

Description:

Extends indefinitely the period in which a tax credit may be applied for alternate energy systems; changes the amount of the tax credits. Repeals heat pump and ice storage tax credits. Directs the tax review commission to periodically review the tax credits, beginning July 1, 2010. (SB855 HD1)

THE SENATE

S.B. NO.

855

TWENTY-SECOND LEGISLATURE, 2003

S.D. 1

STATE OF HAWAII

H.D. 1


 

A BILL FOR AN ACT

 

relating to energy.

 

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

SECTION 1. Section 232E-3, Hawaii Revised Statutes, is amended to read as follows:

"§232E-3 Duties. (a) The commission shall conduct a systematic review of the State's tax structure, using such standards as equity and efficiency. Thirty days prior to the convening of the second regular session of the legislature after the members of the commission have been appointed, the commission shall submit to the legislature an evaluation of the State's tax structure and recommend revenue and tax policy, except that for the commission appointed on or before July 1, 1980, or the replacement commission intended to function prior to the appointment of a new commission on or before July 1, 1985, the commission shall submit the required evaluation and recommendations to the legislature thirty days prior to the convening of the regular session of 1985.

(b) Beginning on July 1, 2010, and every five years thereafter, along with the periodic evaluation and recommended revenue and tax policy established in subsection (a), the commission shall conduct and submit to the legislature a detailed review of the renewable energy tax credits provided under section 235-12, and recommend whether to continue, amend, or repeal the tax credits."

SECTION 2. Section 235-12, Hawaii Revised Statutes, is amended by amending subsection (b) to read as follows:

"(b) For taxable years beginning after December 31, 1989, 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 as follows:

(1) For wind energy systems that are installed and placed in service after December 31, 1989, [but before July 1, 2003,] the credit shall be [twenty per cent of the actual cost;]           ;

(2) For solar energy systems that are installed and placed in service after December 31, 1989, [but before July 1, 2003,] on new and existing single family residential buildings, the credit shall be [in an amount not to exceed thirty-five per cent or $1,750, whichever is less, of the actual cost of the solar energy system;]           ;

(3) For solar energy systems that are installed and placed in service after December 31, 1989, [but before July 1, 2003,] on new and existing multiunit buildings used primarily for residential purposes, the credit shall be [in an amount not to exceed thirty-five per cent or $350 per building unit, whichever is less, of the actual cost of the solar energy system;]           ; and

(4) For solar energy systems that are installed and placed in service after December 31, 1989, [but before July 1, 2003,] in new and existing hotel, commercial, and industrial facilities, the credit shall be [in an amount not to exceed thirty-five per cent of the actual cost of the solar energy system;]           .

[(5) For heat pumps that are installed and placed in service after December 31, 1989, but before July 1, 2003, in new and existing single-family residential buildings, the credit shall be in an amount not to exceed twenty per cent or $400, whichever is less, of the actual cost of the heat pump;

(6) For heat pumps that are installed and placed in service after December 31, 1989, but before July 1, 2003, in new and existing multiunit buildings used primarily for residential purposes, the credit shall be in an amount not to exceed twenty per cent or $200 per building unit, whichever is less, of the actual cost of the heat pump; provided that a licensed professional engineer reviews the design of the system and provides a written opinion that the system, in accordance with recognized engineering practice, is designed to provide not less than ninety per cent of the daily annual average hot water needs of all of the occupants of the building;

(7) For heat pumps that are installed and placed in service after December 31, 1989, but before July 1, 2003, in new and existing hotel, commercial, and industrial facilities, the credit shall be in an amount not to exceed twenty per cent of the actual cost of the heat pump; and

(8) For ice storage systems that are installed and placed in service after December 31, 1990, but before July 1, 2003, the credit shall be in an amount not to exceed fifty per cent of the actual cost of the ice storage system.]

The per unit of actual cost of a solar energy system [or heat pump] referred to in subsection (b)(3) [and (6)] shall be determined by multiplying the actual cost of the solar energy system [or heat pump] installed and placed in service in the multiunit building by a fraction, the numerator being the total square feet of that unit in the multiunit building, and the denominator being the total square feet of all the units in the multiunit building.

If federal energy tax credits similar to any of those provided in paragraphs (1) to [(8)] (4) are established after June 30, 1998, [but before July 1, 2003,] then the state tax credit provided in the respective paragraph or paragraphs shall be reduced by the amount of the applicable federal energy tax credit."

SECTION 3. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 4. This Act shall take effect on July 1, 2003; provided that section 1 of this Act shall apply to taxable years beginning after December 31, 2002.