Report Title:
Energy Tax Credit
Description:
Extends deadline for energy conservation income tax credits to July 1, 2010; allows tax credits for solar energy systems and heat pumps for single-family residential buildings to be awarded per unit. (SD2)
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HOUSE OF REPRESENTATIVES |
H.B. NO. |
1282 |
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TWENTY-FIRST LEGISLATURE, 2001 |
H.D. 2 |
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STATE OF HAWAII |
S.D. 2 |
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A BILL FOR AN ACT
RELATING TO ENERGY CONSERVATION TAX CREDITS.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
SECTION 1. Hawaii remains heavily dependent on petroleum fuel as its main source of energy. While oil accounts for forty per cent of the energy needs of the United States, it accounts for ninety per cent of Hawaii's energy needs.
As a result, the need to reduce our vulnerability to disruptions in oil supplies is an urgent one. One way to reduce this dependency on oil is by encouraging the use of indigenous resources as our sources of energy. The energy conservation income tax credit (tax credit), which has been in effect since 1977, is a proven strategy to meet this objective.
For example, according to papers on solar systems presented at the energy efficiency policy task force's energy symposium in November 2000, the tax credit contributes net economic and fiscal benefits and has been effective in stimulating investment in solar systems. Among other things, the papers found that:
(1) The tax credit serves as a market signal to consumers that stimulates investment in solar systems. Without the tax credit, it is estimated that the number of solar systems purchased would decrease by ninety per cent;
(2) With the tax credit, there is a positive fiscal impact to the State over the life of a purchased solar system at $1,842 per system. This is due to the energy savings from solar systems, the value of which is exogenous to Hawaii's economy;
(3) The tax credit employment impact over the life of a solar system is also positive; and
(4) If the tax credit is eliminated and the solar industry shrinks to ten per cent (close to three thousand systems are installed annually), the State will suffer a net fiscal loss of approximately $3,165 per solar system in the first year.
The purpose of this Act is to extend the energy conservation income tax credit to July 1, 2010.
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,] 2010, 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,] 2010, 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, per building unit, 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,] 2010, 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;
(4) For solar energy systems that are installed and placed in service after December 31, 1989, but before July 1, [2003,] 2010, 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,] 2010, in new and existing single-family residential buildings, the credit shall be in an amount not to exceed twenty per cent or $400, per building unit, 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,] 2010, 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,] 2010, 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,] 2010, 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) are established after June 30, 1998, but before July 1, [2003,] 2010, 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, upon its approval, shall apply to taxable years beginning after December 31, 2050.