Report Title:

Renewable Energy Technologies; Tax Credits

Description:

Amends the renewable energy technologies tax credit to authorize refundable and non-refundable credits for solar energy systems; clarifies remaining renewable energy technologies tax credits.  (SD2)

HOUSE OF REPRESENTATIVES	H.B. NO.	2005
TWENTY-FOURTH LEGISLATURE, 2008		H.D. 1
STATE OF HAWAII		S.D. 2

A BILL FOR AN ACT

RELATING TO RENEWABLE ENERGY TECHNOLOGIES.

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

     SECTION 1.  Section 235-12.5, Hawaii Revised Statutes, is amended to read as follows:

"§235-12.5  Renewable energy technologies; income tax credit.  (a)  When the requirements of subsection (c) are met, each individual or corporate taxpayer that files an individual or corporate net income tax return for a taxable year may claim a refundable or non-refundable tax credit under this section against the Hawaii state individual or corporate net income tax[.  The tax] credit.  Unless otherwise stated, the credit is non-refundable.  All versions of the credit may be claimed for every eligible renewable energy technology system that is installed and placed in service in the State by a taxpayer during the taxable year.  This credit shall be available for systems installed and placed in service in the State after June 30, 2003.  The tax credit may be claimed as follows:

    [(1) Solar thermal energy systems for:

(A) Single-family residential property:  thirty-five per cent of the actual cost or $2,250, whichever is less;

(B) Multi-family residential property:  thirty-five per cent of the actual cost or $350 per unit, whichever is less; and

(C) Commercial property:  thirty-five per cent of the actual cost or $250,000, whichever is less;]

(2) Wind-powered energy systems for:

(A) Single-family residential property:  twenty per cent of the actual cost or $1,500, whichever is less;

(B) Multi-family residential property:  twenty per cent of the actual cost or $200 per unit, whichever is less; and

(C) Commercial property:  twenty per cent of the actual cost or $500,000, whichever is less; and

(3) Photovoltaic energy systems for:

(A) Single-family residential property:  thirty-five per cent of the actual cost or $5,000, whichever is less;

(B) Multi-family residential property:  thirty-five per cent of the actual cost or $350 per unit, whichever is less; and

(C) Commercial property:  thirty-five per cent of the actual cost or $500,000, whichever is less;

provided that multiple owners of a single system shall be entitled to a single tax credit; and provided further that the tax credit shall be apportioned between the owners in proportion to their contribution to the cost of the system.

In the case of a partnership, S corporation, estate, or trust, the tax credit allowable is for every eligible renewable energy technology system that is installed and placed in service in the State by the entity.  The cost upon which the tax credit is computed shall be determined at the entity level.  Distribution and share of credit shall be determined pursuant to section 235-110.7(a).]

(1) For each solar energy system:

(A) The non-refundable credit is thirty-five per cent of the actual cost or the cap amount determined in subsection (b), whichever is less; and

(B) The refundable credit is twenty-five per cent of the actual cost or the cap amount determined in subsection (b), whichever is less; and

(2) For each wind-powered energy system, the credit is twenty per cent of the actual cost or the cap amount determined in subsection (b), whichever is less.

(b)  The amount of credit allowed for each eligible renewable energy technology system shall not exceed the applicable cap amount, which is determined as follows:

(1) If the primary purpose of the solar energy system is to use energy from the sun to heat water for household use, the cap amounts shall be:

(A) $2,250 per system for single-family residential property;

(B) $350 per unit per system for multi-family residential property; and

(C) $250,000 per system for commercial property.

(2) For all other solar energy systems, the cap amounts shall be:

(A) $5,000 per system for single-family residential property;

(B) $350 per unit per system for multi-family residential property; and

(C) $500,000 per system for commercial property.

(3) For all wind-power energy systems, the cap amounts shall be:

(A) $1,500 per system for single-family residential property;

(B) $200 per unit per system for multi-family residential property; and

(C) $500,000 per system for commercial property.

     [(b)] (c)  For the purposes of this section:

     "Actual cost" means costs related to the renewable energy technology systems under subsection (a), including accessories and installation, but not including the cost of consumer incentive premiums unrelated to the operation of the system or offered with the sale of the system and costs for which another credit is claimed under this chapter.

"Household use" means any use that heated water is commonly put to in a residential setting, including commercial application of those uses, and excludes technologies that heat water for the purpose of making electricity.

     "Renewable energy technology system" means a new system that captures and converts a renewable source of energy, such as wind, [heat (solar thermal), or light (photovoltaic)] or energy from the sun into:

     (1)  A usable source of thermal or mechanical energy;

     (2)  Electricity; or

     (3)  Fuel.

     "Solar or wind energy system" means any identifiable facility, equipment, apparatus, or the like that converts [insolation] energy from the sun or wind energy to useful thermal or electrical energy for heating, cooling, or reducing the use of other types of energy that are dependent upon fossil fuel for their generation.

     [(c)] (d)  For taxable years beginning after December 31, 2005, the dollar amount of any utility rebate shall be deducted from the cost of the qualifying system and its installation before applying the state tax credit.

     [(d)] (e)  The director of taxation shall prepare any forms that may be necessary to claim a tax credit under this section, including forms identifying the technology type of each tax credit claimed under this section, whether for solar thermal, photovoltaic from the sun, or wind.  The director may also require the taxpayer to furnish reasonable information to ascertain the validity of the claim for credit made under this section and may adopt rules necessary to effectuate the purposes of this section pursuant to chapter 91.

     [(e)] (f)  If the tax credit under this section exceeds the taxpayer's income tax liability, the excess of the credit over liability may be used as a credit against the taxpayer's income tax liability in subsequent years until exhausted.  All claims for the tax credit under this section, including amended claims, shall be filed on or before the end of the twelfth month following the close of the taxable year for which the credit may be claimed.  Failure to comply with this subsection shall constitute a waiver of the right to claim the credit.

     [(f)] (g)  By or before December, 2005, to the extent feasible, using existing resources to assist the energy-efficiency policy review and evaluation, the department shall assist with data collection on the following:

     (1)  The number of renewable energy technology systems that have qualified for a tax credit during the past year by:

         (A)  Technology type ([solar thermal, photovoltaic from the sun,] sun and wind); and

         (B)  Taxpayer type (corporate and individual); and

     (2)  The total cost of the tax credit to the State during the past year by:

         (A)  Technology type; and

         (B)  Taxpayer type."

     SECTION 2.  Statutory material to be repealed is bracketed and stricken.  New statutory material is underscored.

     SECTION 3.  This Act shall take effect on July 1, 2050.