| 47 | | - | SECTION 1. The legislature finds that section 269-92(a), Hawaii Revised Statutes, requires each utility company that sells electricity for consumption in the State to establish a renewable portfolio standard of forty per cent of its net electricity generation by December 31, 2030, seventy per cent of its net electricity generation by December 31, 2040, and one hundred per cent of its net electricity generation by December 31, 2045. The legislature further finds that for electric utility companies to meet the required renewable portfolio standards, a significant component of each electric utility company's renewable portfolio standard must include sufficient locally sourced, firm renewable energy sources to offset the intermittent nature of wind and solar-powered renewable energy. The legislature further finds that, to ensure sustainable inventories of locally sourced, firm renewable energy for electric utility companies' renewable portfolio standards, long-term planning that includes incentives are essential for investment and development of locally sourced, firm renewable energy production. Accordingly, the purpose of this Act is to update the renewable fuels production tax credit to incentivize locally produced renewable fuel sold in the State. SECTION 2. Section 235-110.32, Hawaii Revised Statutes, is amended as follows: 1. By amending subsection (a) to read: "(a) Each year during the credit period, there shall be allowed to each taxpayer subject to the taxes imposed by this chapter a renewable fuels production tax credit that shall be applied to the taxpayer's net income tax liability, if any, imposed by this chapter for the taxable year in which the credit is properly claimed. For each taxpayer producing renewable fuels, the annual dollar amount of the renewable fuels production tax credit during the [ten-year] credit period shall [be] include an amount equal to [20] cents per seventy-six thousand British thermal units of renewable fuels using the lower heating value produced and sold for distribution in the State; provided that the taxpayer's production of renewable fuels is not less than two billion five hundred million British thermal units of renewable fuels per calendar year; provided further that the amount of the tax credit claimed under this section by a taxpayer shall not exceed [$3,500,000] per cent of the total amount of tax credits allowed under this section per taxable year; provided further that there shall be an additional credit value of $1 per gallon for renewable fuels produced from renewable feedstock locally grown or recycled in the State; provided further that there shall be an additional credit of $1 per gallon for the production of sustainable aviation fuel; provided further that the tax credit shall only be claimed for fuels with lifecycle emissions below that of fossil fuels. No other tax credit may be claimed under this chapter for the costs incurred to produce the renewable fuels that are used to properly claim a tax credit under this section for the taxable year. Each taxpayer, together with all of its related entities as determined under section 267(b) of the Internal Revenue Code and all business entities under common control, as determined under sections 414(b), 414(c), and 1563(a) of the Internal Revenue Code, shall not be eligible for more than a single [ten-year] credit period[.]; provided that any taxpayer who previously claimed credits under this chapter shall be reset for taxable years beginning after December 31, 2023." 2. By amending subsection (d) to read: "(d) Within [thirty] sixty calendar days after the due date of the statement required under subsection (c), the Hawaii state energy office shall: (1) Acknowledge, in writing, receipt of the statement; (2) Issue a certificate to the taxpayer reporting the amount of renewable fuels produced and sold, the amount of credit that the taxpayer is entitled to claim for the previous calendar year, and the cumulative amount of the tax credit during the credit period; and (3) Provide the taxpayer with a determination of whether the lifecycle greenhouse gas emissions for each type of qualified fuel produced is at least twenty-five per cent lower than that of fossil fuels." 3. By amending subsection (f) to read: "(f) The total amount of tax credits allowed under this section shall not exceed [$20,000,000] for all eligible taxpayers in any calendar year. In the event that the credit claims under this section exceed [$20,000,000] for all eligible taxpayers in any given calendar year, the [$20,000,000] shall be [divided between all] allocated to each eligible taxpayers for that year in proportion to the total amount of renewable fuels produced by all eligible taxpayers. Upon reaching [$20,000,000] in the aggregate, the Hawaii state energy office shall immediately discontinue issuing certificates and notify the department of taxation. In no instance shall the total dollar amount of certificates issued exceed [$20,000,000] per calendar year." 4. By amending subsection (o) to read: "(o) As used in this section: "Credit period" means a maximum period of [ten] consecutive years, beginning from the first taxable year in which a taxpayer begins renewable fuels production at a level of at least two billion five-hundred million British thermal units of renewable fuels per calendar year. "Lifecycle greenhouse gas emissions" means the aggregate attributional core lifecycle greenhouse gas emissions values utilizing the most recent version of Argonne National Laboratory's Greenhouse gasses, Regulated Emissions, and Energy use in Technologies (GREET) Model, inclusive of agricultural practices and carbon capture sequestration. "Locally grown" means renewable feedstock that is grown, produced, generated, or collected in the State. "Net income tax liability" means income tax liability reduced by all other credits allowed under this chapter. "Renewable feedstocks" means: (1) Biomass crops and other renewable organic material, including but not limited to logs, wood chips, wood pellets, and wood bark; (2) Agricultural residue; (3) Oil crops, including but not limited to algae, canola, jatropha, palm, soybean, and sunflower; (4) Sugar and starch crops, including but not limited to sugar cane and cassava; (5) Other agricultural crops; (6) Grease and waste cooking oil; (7) Food wastes; (8) Municipal solid wastes and industrial wastes; (9) Water, including wastewater; and (10) Animal residues and wastes, that can be used to generate energy. "Renewable fuels" means fuels produced from renewable feedstocks; provided that the fuel: (1) Is sold as a fuel in the State; and (2) Meets the relevant ASTM International specifications or other industry specifications for the particular fuel, including but not limited to: (A) Methanol, ethanol, or other alcohols; (B) Hydrogen; (C) Biodiesel or renewable diesel; (D) Biogas; (E) Other biofuels; (F) Renewable jet fuel or renewable gasoline; or (G) Logs, wood chips, wood pellets, or wood bark. "Sustainable aviation fuel" means an alternative fuel, as defined in section 243-1, that is used in aviation." SECTION 3. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored. SECTION 4. This Act shall take effect on July 1, 3000, and shall apply to taxable years beginning after December 31, 2023. |
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| 47 | + | SECTION 1. The legislature finds that section 269-92(a), Hawaii Revised Statutes, requires each utility company that sells electricity for consumption in the State to establish a renewable portfolio standard of forty per cent of its net electricity generation by December 31, 2030, seventy per cent of its net electricity generation by December 31, 2040, and one hundred per cent of its net electricity generation by December 31, 2045. The legislature further finds that for electric utility companies to meet the required renewable portfolio standards, a significant component of each electric utility company's renewable portfolio standard must include sufficient locally sourced, firm renewable energy sources to offset the intermittent nature of wind and solar-powered renewable energy. The legislature further finds that, to ensure sustainable inventories of locally sourced, firm renewable energy for electric utility companies' renewable portfolio standards, long-term planning that includes incentives are essential for investment and development of locally sourced, firm renewable energy production. Accordingly, the purpose of this Act is to update the renewable fuels production tax credit to incentivize locally produced renewable fuel sold in the State. SECTION 2. Section 235-110.32, Hawaii Revised Statutes, is amended as follows: 1. By amending subsection (a) to read: "(a) Each year during the credit period, there shall be allowed to each taxpayer subject to the taxes imposed by this chapter a renewable fuels production tax credit that shall be applied to the taxpayer's net income tax liability, if any, imposed by this chapter for the taxable year in which the credit is properly claimed. For each taxpayer producing renewable fuels, the annual dollar amount of the renewable fuels production tax credit during the [ten-year] twenty-year credit period shall [be] include an amount equal to [20] 35 cents per seventy-six thousand British thermal units of renewable fuels using the lower heating value produced and sold for distribution in the State; provided that the taxpayer's production of renewable fuels is not less than two billion five hundred million British thermal units of renewable fuels per calendar year; provided further that the amount of the tax credit claimed under this section by a taxpayer shall not exceed [$3,500,000] seventy-five per cent of the total amount of tax credits allowed under this section per taxable year; provided further that there shall be an additional credit value of $1 per gallon for renewable fuels produced from renewable feedstock locally grown or recycled in the State; provided further that there shall be an additional credit of $1 per gallon for the production of sustainable aviation fuel; provided further that the tax credit shall only be claimed for fuels with lifecycle emissions below that of fossil fuels. No other tax credit may be claimed under this chapter for the costs incurred to produce the renewable fuels that are used to properly claim a tax credit under this section for the taxable year. Each taxpayer, together with all of its related entities as determined under section 267(b) of the Internal Revenue Code and all business entities under common control, as determined under sections 414(b), 414(c), and 1563(a) of the Internal Revenue Code, shall not be eligible for more than a single [ten-year] credit period[.]; provided that any taxpayer who previously claimed credits under this chapter shall be reset for taxable years beginning after December 31, 2023." 2. By amending subsection (d) to read: "(d) Within [thirty] sixty calendar days after the due date of the statement required under subsection (c), the Hawaii state energy office shall: (1) Acknowledge, in writing, receipt of the statement; (2) Issue a certificate to the taxpayer reporting the amount of renewable fuels produced and sold, the amount of credit that the taxpayer is entitled to claim for the previous calendar year, and the cumulative amount of the tax credit during the credit period; and (3) Provide the taxpayer with a determination of whether the lifecycle greenhouse gas emissions for each type of qualified fuel produced is at least twenty-five per cent lower than that of fossil fuels." 3. By amending subsection (f) to read: "(f) The total amount of tax credits allowed under this section shall not exceed [$20,000,000] for all eligible taxpayers in any calendar year. In the event that the credit claims under this section exceed [$20,000,000] for all eligible taxpayers in any given calendar year, the [$20,000,000] shall be [divided between all] allocated to each eligible taxpayers for that year in proportion to the total amount of renewable fuels produced by all eligible taxpayers. Upon reaching [$20,000,000] in the aggregate, the Hawaii state energy office shall immediately discontinue issuing certificates and notify the department of taxation. In no instance shall the total dollar amount of certificates issued exceed [$20,000,000] per calendar year." 4. By amending subsection (o) to read: "(o) As used in this section: "Credit period" means a maximum period of [ten] twenty consecutive years, beginning from the first taxable year in which a taxpayer begins renewable fuels production at a level of at least two billion five-hundred million British thermal units of renewable fuels per calendar year. "Lifecycle greenhouse gas emissions" means the aggregate attributional core lifecycle greenhouse gas emissions values utilizing the most recent version of Argonne National Laboratory's Greenhouse gasses, Regulated Emissions, and Energy use in Technologies (GREET) Model, inclusive of agricultural practices and carbon capture sequestration. "Locally grown" means renewable feedstock that is grown, produced, generated, or collected in the State. "Sustainable aviation fuel" means an alternative fuel, as defined in section 243-1, that is used in aviation. "Net income tax liability" means income tax liability reduced by all other credits allowed under this chapter. "Renewable feedstocks" means: (1) Biomass crops and other renewable organic material, including but not limited to logs, wood chips, wood pellets, and wood bark; (2) Agricultural residue; (3) Oil crops, including but not limited to algae, canola, jatropha, palm, soybean, and sunflower; (4) Sugar and starch crops, including but not limited to sugar cane and cassava; (5) Other agricultural crops; (6) Grease and waste cooking oil; (7) Food wastes; (8) Municipal solid wastes and industrial wastes; (9) Water, including wastewater; and (10) Animal residues and wastes, that can be used to generate energy. "Renewable fuels" means fuels produced from renewable feedstocks; provided that the fuel: (1) Is sold as a fuel in the State; and (2) Meets the relevant ASTM International specifications or other industry specifications for the particular fuel, including but not limited to: (A) Methanol, ethanol, or other alcohols; (B) Hydrogen; (C) Biodiesel or renewable diesel; (D) Biogas; (E) Other biofuels; (F) Renewable jet fuel or renewable gasoline; or (G) Logs, wood chips, wood pellets, or wood bark." SECTION 3. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored. SECTION 4. This Act shall take effect on July 1, 3000 and shall apply to taxable years beginning after December 31, 2023. |
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