Bill Text: HI SB3360 | 2024 | Regular Session | Amended
Bill Title: Relating To Renewable Fuel.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Engrossed) 2024-03-21 - Passed Second Reading as amended in HD 1 and referred to the committee(s) on FIN with none voting aye with reservations; none voting no (0) and Representative(s) Martinez, Nakashima excused (2). [SB3360 Detail]
Download: Hawaii-2024-SB3360-Amended.html
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THE SENATE |
S.B. NO. |
3360 |
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THIRTY-SECOND LEGISLATURE, 2024 |
S.D. 1 |
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STATE OF HAWAII |
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A BILL FOR AN ACT
RELATING TO RENEWABLE FUEL.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
The legislature further finds that for electric utility companies to meet the required renewable portfolio standards required by section 269-92(a), Hawaii Revised Statutes, by 2045, an indispensable 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 grown, produced, generated, or collected renewable fuel.
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] 35 cents
per seventy-six thousand British thermal units of renewable fuels using the
lower heating value 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 $1.00 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 $1.00
per gallon for renewable fuels produced with lifecycle greenhouse gas emissions
at least seventy-five per cent below that of fossil fuels; 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 tax 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 lower than that of fossil
fuels[.] and whether the lifecycle greenhouse gas emissions for each
type of qualified fuel produced is seventy-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 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."
SECTION 3. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.
SECTION 4. This Act shall take effect on January 1, 2060, and shall apply to taxable years beginning after December 31, 2023.
Report Title:
Renewable Fuels Production Tax Credit; Locally Sourced Renewable Feedstock; Credit Period; Total Credits
Description:
Updates the Renewable Fuels Production Tax Credit to incentivize locally grown, produced, generated, or collected renewable fuel. Extends the credit period from ten consecutive years to an unspecified length of time. Increases the total amount of tax credits allowed to an unspecified amount in any calendar year. Takes effect 1/1/2060. (SD1)
The summary description
of legislation appearing on this page is for informational purposes only and is
not legislation or evidence of legislative intent.
