Hawaii Senate Bill SB2434

Hawaii 2022 Regular Session

• Introduced: 1/21/22
• Refer: 1/24/22

Caption

Relating To Taxation.

Impact

The implementation of SB2434 is expected to have several significant impacts on state law and energy policy. The tax credit may foster the establishment and growth of renewable fuel production facilities, contributing to local economic development and job creation in the renewable energy sector. Additionally, by incentivizing renewable fuel production, the bill supports Hawaii's efforts to reduce reliance on imported fossil fuels and enhance environmental sustainability. However, the provision that no other tax credits may be claimed for renewable fuel production costs could limit some businesses' ability to benefit from multiple forms of tax relief.

Summary

SB2434 introduces a renewable fuels production tax credit in Hawaii, designed to promote the production of renewable fuels within the state. This is established by adding a new section to Chapter 235 of the Hawaii Revised Statutes. The tax credit will be equal to twenty cents per seventy-six thousand British thermal units (BTUs) produced, given that the annual production meets a minimum threshold of fifteen billion BTUs. The maximum credit a taxpayer can claim is capped at $3,000,000 per year for a period of ten consecutive years. This incentive aims to encourage investment and support for renewable energy sources, thereby aligning with broader sustainability goals while potentially enhancing local energy security.

Contention

Despite the anticipated economic benefits, there may be notable points of contention surrounding the bill. Critics could argue that the significant financial commitment to renewable fuels may divert resources from other essential public services or tax incentives. Additionally, ensuring that the renewable fuels produced meet industry specifications and adequately serve the state's energy needs may pose logistical challenges. There might also be concerns over the effectiveness of the tax credit in genuinely increasing renewable fuel production or addressing potential environmental impacts, depending on the feedstocks used for producing these fuels.