Bill Text: HI SB11 | 2013 | Regular Session | Introduced
Bill Title: Renewable Energy; Solar Energy Property; Tax Credit
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced - Dead) 2013-02-12 - The committee on ENE deferred the measure. [SB11 Detail]
Download: Hawaii-2013-SB11-Introduced.html
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THE SENATE |
S.B. NO. |
11 |
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TWENTY-SEVENTH LEGISLATURE, 2013 |
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STATE OF HAWAII |
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A BILL FOR AN ACT
relating to renewable energy.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
SECTION 1. Section 196-6.5, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:
"(a) On or after January 1, 2010, no building permit shall be issued for a new single-family dwelling that does not include a solar water heater system that meets the standards established pursuant to section 269-44, unless the coordinator approves a variance. A variance application shall only be accepted if submitted by an architect or mechanical engineer licensed under chapter 464, who attests that:
(1) Installation is impracticable due to poor solar resource;
(2) Installation is cost-prohibitive based upon a life cycle cost-benefit analysis that incorporates the average residential utility bill and the cost of the new solar water heater system with a life cycle that does not exceed fifteen years;
(3) A renewable energy technology system[, as
defined in section 235-12.5,] is substituted for use as the primary energy
source for heating water; or
(4) A demand water heater device approved by Underwriters Laboratories, Inc., is installed; provided that at least one other gas appliance is installed in the dwelling. For the purposes of this paragraph, "demand water heater" means a gas-tankless instantaneous water heater that provides hot water only as it is needed."
SECTION 2. 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 (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:] There is hereby allowed as a credit against the tax imposed by
this chapter for the taxable year:
(1) For [each] solar energy [system: thirty-five
per cent] property that is placed in service in the State by a taxpayer
during the taxable year, and that is not part of a utility scale solar energy
facility, and for which no credit has been claimed under paragraph (4): the
percentage set forth in subsection (b) of the [actual cost or the cap
amount determined in subsection (b), whichever is less;] basis of such
solar energy property as described in subsection (d); 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;] wind energy property that is placed in service in
the State by a taxpayer during the taxable year: the percentage set forth in
subsection (b) of the basis of such wind energy property as described in subsection
(d); or
(3) For utility scale solar energy facilities placed in service in the State by a taxpayer, for the ten-year period beginning on the date the facility was originally placed in service: the relevant rate specified in subsection (b) multiplied by the number of kilowatt hours produced by the facility and sold by the taxpayer to an unrelated person during the taxable year; or
(4) For solar energy property that is placed in service in the State by a taxpayer during the taxable year that is not part of a utility scale solar energy facility, and for which no credit has been claimed under paragraph (1), for the ten-year period beginning on the date the property was originally placed in service: the relevant rate specified in subsection (b) multiplied by the number of kilowatt hours produced by the property during the taxable year;
provided that multiple owners of a single [system]
solar energy property, wind energy property, or utility scale solar energy
facility 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.] for that property or
facility.
In the case of a partnership, S corporation,
estate, or trust, the tax credit allowable is for [every] all
eligible [renewable] solar and wind energy [technology system]
property [that is] installed and placed in service in the State
by the entity[.] and is allowable for all energy produced by solar
energy property or produced and sold by a utility scale solar energy facility
during that taxable year. The [cost upon which] amount of
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).]
704(b) of the Internal Revenue Code.
(b) The amount of credit allowed [for each
eligible renewable energy technology system shall not exceed the applicable cap
amount, which is determined] under this section shall be 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 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 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;
(B) $200 per unit per system for
multi-family residential property; and
(C) $500,000 per system for
commercial property.]
(1) For solar energy property:
(A) Thirty per cent of the basis of the solar energy property placed in service on or after July 1, 2013, and on or before December 31, 2014;
(B) Twenty-five per cent of the basis of the solar energy property placed in service on or after January 1, 2015, and on or before December 31, 2015;
(C) Twenty per cent of the basis of the solar energy property placed in service on or after January 1, 2016, and on or before December 31, 2016;
(D) Fifteen per cent on the basis of the solar energy property placed in service on or after January 1, 2017, and on or before December 31, 2017; and
(E) Ten per cent of the basis of the solar energy property placed in service on or after January 1, 2018;
(2) For wind energy property: twenty per cent of the basis of wind energy property placed in service on or after July 1, 2013;
(3) For a utility scale solar energy facility:
(A) 11.5 cents per kilowatt hour for ordinary utility scale solar energy facilities placed in service on or after July 1, 2013, and on or before December 31, 2019; and
(B) 5.75 cents per kilowatt hour for competitively-bid utility scale solar energy facilities placed in service on or after July 1, 2013, and on or before December 31, 2019; and
(4) For solar energy property for which no credit is claimed under subsection (a)(1): 11.5 cents per kilowatt hour for energy property placed in service on or after July 1, 2013, and on or before December 31, 2019.
(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 to
which heated water is commonly put in a residential setting, including
commercial application of those uses.
"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.]
"Competitively-bid utility scale solar energy facility" means a utility scale solar energy facility that is installed and placed in service pursuant to a competitive bidding process, required by the public utilities commission or statute, and conducted by or on behalf of an electric utility regulated by the public utilities commission.
"Ordinary utility scale solar energy facility" means a utility scale solar energy facility that is not installed and placed in service pursuant to a competitive bidding process conducted by or on behalf of an electric utility regulated by the public utilities commission.
"Placed in service" shall have the same meaning as in Treasury Regulation 1.167(a)-11(e)(1).
"Solar [or wind] energy [system]
property" 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.] equipment
that uses solar energy to generate electricity, to heat or cool or provide hot
water for use in a structure, or to provide solar process heat, the construction,
reconstruction, or erection of which is completed by the taxpayer or acquired
by the taxpayer if the original use of such property commences with the
taxpayer.
"Sub-transmission or transmission voltage" means a voltage level that the applicable electric utility has filed with the public utilities commission as a nominal primary or transmission voltage level, allowing however for variations in voltage levels that the public utilities commission deems acceptable for primary or transmission voltage.
"Utility scale solar energy facility" means solar energy property that is:
(1) Designed, installed, and placed into service to produce electricity; and
(2) Interconnected to a utility grid at sub-transmission or transmission voltage.
"Wind energy property" means equipment that uses wind energy to generate electricity, the construction, reconstruction, or erection of which is completed by the taxpayer or acquired by the taxpayer if the original use of such property commences with the taxpayer, and that is not interconnected to a utility grid at sub-transmission or transmission voltage.
(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.] For purposes of calculating the credit allowed under
this chapter:
(1) The basis of the solar or wind energy property shall include all costs related to the solar or wind energy property, including accessories and installation, but shall not include the cost of consumer incentive premiums unrelated to the operation of the property or offered with the sale of the property. The basis used for claiming the credit allowed under this chapter shall be consistent with the basis used by the taxpayer for claiming the federal energy credit described in section 48 of the Internal Revenue Code or the qualified solar electric property expenditure used by the taxpayer in claiming the federal residential energy property credit described in section 25D of the Internal Revenue Code; provided that for the purposes of calculating the credit allowed under this chapter, the basis of the solar or wind energy property shall not be reduced by the amount of any federal tax credits or other subsidized energy financing received by the taxpayer; and
(2) The number of kilowatt hours produced by solar energy property shall be determined by a meter or metering system installed on the property which allows the taxpayer to determine the amount of solar energy production accurate to within two per cent of actual system output. The installed meter must be a separate interval data recording meter, or a complete system that is functionally equivalent to an interval data recording meter recording data no less frequently than every fifteen minutes. The type of meter installed on the solar energy property must be listed with the California energy commission.
(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 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.
(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, unless otherwise elected by the taxpayer
pursuant to subsection (g) [or (h)]. 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.
(g) For solar energy [systems,] property
and for utility scale solar energy facilities, a taxpayer may elect to
reduce the eligible credit amount by thirty per cent and if this reduced amount
exceeds the amount of income tax payment due from the taxpayer, the excess of
the credit amount over payments due shall be refunded to the taxpayer; provided
that tax credit amounts properly claimed by a taxpayer who has no income tax
liability shall be paid to the taxpayer; [and] provided further that no
refund on account of the tax credit allowed by this section shall be made for
amounts less than $1.
The election required by this subsection shall
be made in a manner prescribed by the director on the taxpayer's return for the
taxable year in which the system is installed and placed in service. A
separate election may be made for each separate [system] solar energy
property and utility scale solar energy facility that generates a credit.
An election once made is irrevocable.
[(h) Notwithstanding subsection (g), for
any renewable energy technology system, an individual taxpayer may elect to
have any excess of the credit over payments due refunded to the taxpayer, if:
(1) All of the taxpayer's income is exempt
from taxation under section 235-7(a)(2) or (3); or
(2) The taxpayer's adjusted gross income is
$20,000 or less (or $40,000 or less if filing a tax return as married filing
jointly);
provided that tax credits properly claimed by a
taxpayer who has no income tax liability shall be paid to the taxpayer; and
provided further that no refund on account of the tax credit allowed by this
section shall be made for amounts less than $1.
A husband and wife who do not file a joint
tax return shall only be entitled to make this election to the extent that they
would have been entitled to make the election had they filed a joint tax
return.
The election required by this subsection
shall be made in a manner prescribed by the director on the taxpayer's return
for the taxable year in which the system is installed and placed in service. A
separate election may be made for each separate system that generates a
credit. An election once made is irrevocable.
(i) No taxpayer shall be allowed a credit
under this section for the portion of the renewable energy technology system
required by section 196-6.5 that is installed and placed in service on any
newly constructed single-family residential property authorized by a building
permit issued on or after January 1, 2010.
(j) 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 for each taxable
year:
(1) The number of renewable energy
technology systems that have qualified for a tax credit during the calendar
year by:
(A) Technology type; and
(B) Taxpayer type (corporate and
individual); and
(2) The total cost of the tax credit to the
State during the taxable year by:
(A) Technology type; and
(B) Taxpayer type.
(k) This section shall apply to eligible
renewable energy technology systems that are installed and placed in service on
or after July 1, 2009.]
(h) Coordination with other laws:
(1) Solar energy property shall not include any renewable energy technology property installed to comply with the requirements of section 196-6.5;
(2) The basis of solar or wind energy property shall not include any amount for which another credit is claimed under this chapter;
(3) A utility scale solar energy facility shall not include any facility for which another credit is claimed under this chapter;
(4) No credit under this section shall be allowed to:
(A) Any federal, state, or local government or any political subdivision, agency, or instrumentality thereof;
(B) Any organization described in section 501(c) of the Internal Revenue Code and exempt from tax under section 501(a) of the Internal Revenue Code;
(C) Any entity referred to in section 54(j)(4) of the Internal Revenue Code; or
(D) Any partnership or other pass-thru entity or any partner or other holder of an equity or profits interest of which is described in subparagraph (A), (B) or (C); and
(5) An association of owners under chapter 514A, 514B, 421I, or 421J may claim the credit allowed under this section in its own name for property or facilities placed in service and located on common areas.
(i) The department of business, economic development, and tourism shall collect data regarding tax credits claimed under this section, and shall report to the legislature no later than December 31 of each year the following information received by the department as of August 31 of that year, for the immediately preceding tax year:
(1) The dollar amount of tax credits claimed for solar energy facilities under subsection (a)(1) of this section;
(2) The dollar amount of tax credits claimed for utility scale solar energy facilities under subsection (a)(3) of this section;
(3) The dollar amount of tax credits claimed for competitively-bid utility scale solar energy facilities;
(4) The dollar amount of tax credits claimed for ordinary utility scale solar energy facilities;
(5) The dollar amount of tax credits claimed for wind energy property;
(6) The total dollar amount of tax credits claimed under this section; and
(7) The dollar amount of tax credits taken as refundable tax credits for each of the reporting categories above.
The department shall also, in its annual report to the legislature, update its previous year's annual report to the legislature regarding tax credits claimed under this section.
(j) The tax credits provided for in this section shall be construed in accordance with Treasury Regulations and judicial interpretations of similar provisions in sections 25D, 45, and 48 of the Internal Revenue Code.
(k) Notwithstanding the foregoing, and in lieu of the credits described above, an individual or corporate taxpayer not currently regulated by the public utilities commission that had by December 31, 2012, entered into an agreement for the sale of electrical energy from non-residential non-utility scale solar energy property with a public sector agency pursuant to a public solicitation and procurement process shall be allowed to elect to receive tax credits for energy properties placed into service prior to January 1, 2014, on the same basis as if the energy property had been placed into service prior to January 1, 2013.
For the purposes of this section, "public sector agency" shall mean the government of the United States of America or of the State of Hawaii or any political subdivision, agency or instrumentality thereof.
(l) Taxpayers may claim credits under this section as it existed on January 1, 2013, for renewable energy technology systems, as that term is defined in this section as it existed on January 1, 2013, which were installed and placed in service prior to July 1, 2013."
SECTION 3. The department of business, economic development, and tourism shall conduct a study in the 2017 calendar year to determine:
(1) The extent to which renewable energy technology income tax credits have benefitted the State by advancing the State's renewable energy goals, reducing the energy costs of homeowners and business owners, and generating economic growth;
(2) The net cost to the State of the renewable energy technology income tax credits;
(3) The extent to which the State will be able to achieve its renewable energy goals without further modification to the existing renewable energy technology income tax credit; and
(4) Whether the renewable energy technologies income tax credit should be extended, eliminated, or otherwise revised for tax years beginning January 1, 2020.
In conducting this study, the department of business, economic development, and tourism shall consult with, at minimum, representatives of the following groups:
(1) The department of taxation;
(2) The Blue Planet Foundation;
(3) The Ulupono Initiative;
(4) The Sierra Club;
(5) The Hawaii Solar Energy Association;
(6) The Hawaii Renewable Energy Association; and
(7) The Hawaii Photovoltaic Coalition.
The department of business, economic development, and tourism shall submit a report of its findings to the legislature no later than twenty days prior to the convening of the regular session of 2018.
SECTION 4. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.
SECTION 5. This Act, upon its approval, shall apply to taxable years beginning after December 31, 2012.
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INTRODUCED BY: |
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Report Title:
Renewable Energy; Solar Energy Property; Tax Credit
Description:
Defines solar energy property and wind energy property and classifies utility scale solar energy facility, competitively-big utility scale solar energy facility, and ordinary utility scale solar energy facility. Establishes a method for calculating tax credits for solar or wind energy property. Requires department of business, economic development, and tourism to monitor and report tax credits claimed under section 235-12.5, Hawaii Revised Statutes.
The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.
