Report Title:

Tax Credit; Private Conversion of Fuel Storage Terminals; Ethanol

Description:

Establishes a tax credit for qualified expenditures to convert fuel storage terminals in the State for purposes of importation, storage, and blending of ethanol with gasoline. (HD1)

HOUSE OF REPRESENTATIVES

H.B. NO.

410

TWENTY-THIRD LEGISLATURE, 2005

H.D. 1

STATE OF HAWAII

 


 

A BILL FOR AN ACT

 

RELATING TO ENERGY.

 

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

SECTION 1. The legislature finds that modifications to existing fuel storage terminals in the State must be made for the storage or blending of ethanol with gasoline pursuant to the State's mandate that at least eighty-five per cent of gasoline sold in the State contain ten per cent ethanol by volume by April 2006.

The purpose of this Act is to establish a tax credit for qualified expenditures necessary to convert fuel storage terminals for purposes of the importation, storage, and blending of ethanol with gasoline.

SECTION 2. Chapter 235, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"§235-   Ethanol fuel storage terminal conversion tax credit. (a) There shall be allowed to each taxpayer a fuel storage terminal conversion tax credit for qualified expenditures incurred in converting a fuel storage terminal to enable the importation, storage, and blending of ethanol with gasoline. The tax credit shall be equal to       per cent of the qualified expenditures incurred in converting a fuel storage terminal, to the extent the expenditures are required to enable the importation, storage, and blending of ethanol with gasoline, exclusive of land costs.

(b) The credit allowed under this section shall be claimed against the tax liability imposed by this chapter or chapter 237 or 243 for the taxable year in which the qualified expenditures were incurred and any taxable years thereafter until exhausted.

(c) The maximum aggregate tax credit for all years shall be       and the tax credit shall apply to taxable years beginning after December 31, 2004, but not to taxable years beginning after December 31, 2006.

(d) The credit under this section shall be claimed by the taxpayer on or before the end of the twelfth month following the close of the taxable year in which the qualified expenditures generating the tax credit were incurred. Failure to comply with the foregoing provision shall constitute a waiver of the right to claim the credit.

(e) If any credit is claimed under this section for qualified expenditures, then no additional tax credit shall be claimed for the same qualified expenditures under any other section under title 14.

(f) The director of taxation shall prepare any forms that may be necessary to claim a credit under this section. The director of taxation may adopt rules necessary to effectuate the purposes of this section pursuant to chapter 91.

(g) For the purposes of this section:

"Fuel storage terminal" means a terminal located in the State used exclusively for the storage of petroleum fuel products with a minimum capacity of twenty-five thousand barrels.

"Qualified expenditures" means any costs for plans, design, construction relating to, and the replacement or conversion of equipment affixed to, a fuel storage terminal building or structure, including tanks, pumps and pipelines, but excluding land costs, necessary to enable the importation, storage, and blending of ethanol with gasoline."

SECTION 3. New statutory material is underscored.

SECTION 4. This Act shall take effect upon its approval and apply to taxable years beginning after December 31, 2004, and before January 1, 2007.