STAND. COM. REP. NO. 1272-04

Honolulu, Hawaii

, 2004

RE: S.B. No. 3207

S.D. 2

H.D. 2

 

 

 

Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-Second State Legislature

Regular Session of 2004

State of Hawaii

Sir:

Your Committee on Finance, to which was referred S.B. No. 3207, S.D. 2, H.D. 1, entitled:

"A BILL FOR AN ACT RELATING TO ETHANOL TAX CREDIT,"

begs leave to report as follows:

The purpose of this bill is to encourage the construction of large-capacity ethanol production facilities in the State by changing the ethanol investment tax credit to an ethanol facility tax credit (EFTC). Specifically, among other things, this bill:

(1) Establishes the annual dollar amount of the EFTC as 30 percent of the ethanol production facility's nameplate capacity;

(2) Clarifies that the EFTC shall not exceed the total amount of investments made in the qualifying ethanol production facility during the credit period;

(3) Clarifies that the EFTC may be claimed in a year that the production of ethanol on an annualized basis is equal to at least 75 percent of the nameplate capacity of the facility;

(4) Requires the facility to be in production by January 1, 2012;

(5) Prohibits a taxpayer from claiming any other tax credit under chapter 235, Hawaii Revised Statutes, for any taxable year in which the EFTC is claimed;

(6) Clarifies the definition of "investment";

(7) Places the Department of Business, Economic Development, and Tourism (DBEDT) in charge of recording investment amounts, issuing certificates that verify qualifying investment amounts, and other related responsibilities, subject to the audit and adjustment by the Department of Taxation (DoTax); and

(8) Caps the total amount of certified credits at $12 million per year.

DBEDT, DoTax, Hawaii Agriculture Research Center, ILWU Local 142, Maui Ethanol LLC, and Clean Fuels Hawaii supported this bill. The Tax Foundation of Hawaii submitted comments.

To promote further discussion, your Committee has amended this bill by:

(1) Changing the annual dollar amount of the EFTC from 30 percent of the facility's nameplate capacity to an unspecified percentage; and

(2) Changing its effective date to July 1, 2010.

As affirmed by the record of votes of the members of your Committee on Finance that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 3207, S.D. 2, H.D. 1, as amended herein, and recommends that it pass Third Reading in the form attached hereto as S.B. No. 3207, S.D. 2, H.D. 2.

Respectfully submitted on behalf of the members of the Committee on Finance,

 

____________________________

DWIGHT Y. TAKAMINE, Chair