Report Title:

THE SENATE	S.B. NO.	1675
TWENTY-FIFTH LEGISLATURE, 2009		S.D. 2
STATE OF HAWAII		H.D. 1
		Proposed

A BILL FOR AN ACT

RELATING TO RENEWABLE ENERGY.

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

SECTION 1. Chapter 237, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"§237- Renewable energy tax exemption; nonprofit organizations. (a) Each nonprofit organization that has obtained tax exempt status under section 501(c) of the Internal Revenue Code, may claim a renewable energy general excise tax exemption under this chapter for an eligible renewable energy technology system that is installed and placed in service in the State for the exclusive use of the nonprofit organization. The general excise tax exemption may be claimed as follows:

(1) For each solar energy system: per cent of the actual cost or the cap amount determined in subsection (b), whichever is less; or

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

provided that, except as provided in subsection (f), the amount of the tax exemption shall be based upon and limited to the amount of the general excise tax paid by the nonprofit organization for any revenue-generating activities that are taxable under this chapter.

(b) The amount of exemption 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, then the cap amount shall be $ per system.

(2) For all other solar energy systems, the cap amounts shall be $ per system.

(3) For all wind-powered energy systems, the cap amount shall be $ per system.

"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 exemption is claimed under this chapter.

"Renewable energy technology system" means a new system that captures and converts a renewable source of energy, such as solar or wind energy, 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 solar 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.

(d) For taxable years beginning after December 31, 2009, the dollar amount of any utility rebate shall be deducted from the cost of the qualifying system and its installation before applying the tax exemption under this section.

(e) The director of taxation shall prepare any forms that may be necessary to claim a tax exemption under this section, including forms identifying the technology type of each tax exemption claimed under this section, whether for solar or wind.

The director may also require the nonprofit organization to furnish reasonable information to ascertain the validity of the claim for exemption made under this section and may adopt rules necessary to effectuate the purposes of this section pursuant to chapter 91.

(f) If the tax exemption under this section exceeds the nonprofit organization's general excise tax liability, the excess of the exemption over liability may be used as an exemption against the nonprofit organization's tax liability in subsequent years until exhausted.

(g) All claims for the tax exemption 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 exemption may be claimed. Failure to comply with this subsection shall constitute a waiver of the right to claim the exemption.

(h) This section shall apply to eligible renewable energy technology systems that are installed and placed in service on or after July 1, 2010."

SECTION 2. New statutory material is underscored.

SECTION 3. This Act shall take effect upon its approval and shall apply to taxable years beginning after December 31, 2009.