THE SENATE	S.B. NO.	3036
THIRTIETH LEGISLATURE, 2020		S.D. 2
STATE OF HAWAII		H.D. 1

A BILL FOR AN ACT

RELATING TO RENEWABLE ENERGY TECHNOLOGIES TAX CREDITS.

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

SECTION 1. Section 235-12.5, Hawaii Revised Statutes, is amended by amending subsections (a) and (b) to read as follows:

"(a) When the requirements of subsection (d) are met, each individual or corporate taxpayer that 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 for every eligible renewable energy technology system that is installed and placed in service in the State by a taxpayer during the taxable year. The tax credit may be claimed as follows:

(1) For each solar energy system: thirty-five per cent of the actual cost or the cap amount determined in subsection (b)[, whichever is less; or]; provided that:

(A) For taxable years beginning after December 31, 2019, and except as provided in subparagraphs (B) and (C), no tax credit may be claimed for solar energy systems installed and placed in service for commercial properties that require a power purchase agreement approved by the public utilities commission;

(B) Notwithstanding any law to the contrary and any subsequent amendments to this paragraph or to any applicable law, a solar energy system that is five megawatts in generating capacity or larger, installed and placed in service on commercial property pursuant to a power purchase agreement approved by a decision and order by the public utilities commission prior to December 31, 2019, shall continue to receive a tax credit equal to thirty-five per cent of the actual cost, or $500,000 per solar energy system that has a total output capacity of at least one thousand kilowatts per system of direct current, whichever is less; and

(C) For each solar energy system integrated with a pump hydroelectric energy storage system, the tax credit may be claimed for thirty-five per cent of the actual cost or the cap amount determined in subsection (b), whichever is less; provided that applicable project approval filings have been made to the public utilities commission by December 31, 2021; or

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

provided further 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).

(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, then the cap amounts shall be:

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

(B) [$350] $750 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; provided that if all or a portion of the system is used to fulfill the substitute renewable energy technology requirement pursuant to section 196-6.5(a)(3), the credit shall be reduced by thirty-five per cent of the actual system cost or $2,250, whichever is less;

(B) [$350] $750 per unit per system for multi-family residential property; and

[(C) $500,000 per system for commercial property; and]

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

(A) $1,500 per system for single-family residential property; provided that if all or a portion of the system is used to fulfill the substitute renewable energy technology requirement pursuant to section 196-6.5(a)(3), the credit shall be reduced by twenty per cent of the actual system cost or $1,500, whichever is less; and

(B) [$200] $750 per unit per system for multi-family residential property[; and

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

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, and shall apply to taxable years beginning after December 31, 2019.

Report Title:

Renewable Energy Technologies Income Tax Credit; Power Purchase Agreements

Description:

Repeals the renewable energy technologies income tax credit for solar energy systems installed and placed in service for commercial properties that require a power purchase agreement (PPA) approved by the PUC, except for certain solar energy systems. Increases the renewable energy technologies income tax credit cap amount for multi-family residential properties. Effective 7/1/2050. (HD1)

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