Bill Text: HI HB667 | 2010 | Regular Session | Introduced
Bill Title: Biofuels Facility; Nameplate Capacity; Gallons Produced
Spectrum: Partisan Bill (Democrat 3-0)
Status: (Introduced - Dead) 2009-05-11 - Carried over to 2010 Regular Session. [HB667 Detail]
Download: Hawaii-2010-HB667-Introduced.html
Report Title:
Biofuels Facility; Nameplate Capacity; Gallons Produced
Description:
Amends the definition of nameplate capacity for biofuels facilities and revises the allowable tax credit to be equal to 40 cents per gallon of biofuel produced.
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HOUSE OF REPRESENTATIVES |
H.B. NO. |
667 |
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TWENTY-FIFTH LEGISLATURE, 2009 |
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STATE OF HAWAII |
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A BILL FOR AN ACT
relating to taxation.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
SECTION 1. Section 235-110.3, Hawaii Revised Statutes, is amended to read as follows:
"§235-110.3 [Ethanol] Biofuel
facility tax credit. (a) Each year during the credit period, there shall
be allowed to each taxpayer subject to the taxes imposed by this chapter, [an
ethanol] a biofuel facility 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 qualified [ethanol] biofuel
production facility, the annual dollar amount of the [ethanol] biofuel
facility tax credit during the eight-year period shall be equal to [thirty
per cent of its nameplate capacity] 40 cents per gallon produced if
the nameplate capacity of the qualified biofuel production facility is
greater than five hundred thousand gallons but less than fifteen million
gallons. A taxpayer may claim this credit for each qualifying [ethanol]
biofuel facility; provided that:
(1) The claim for this credit by any taxpayer of a
qualifying [ethanol] biofuel production facility shall not exceed
one hundred per cent of the total of all investments made by the taxpayer in
the qualifying [ethanol] biofuel production facility during the
credit period;
(2) The qualifying [ethanol] biofuel
production facility operated at a level of production of at least seventy-five
per cent of its nameplate capacity on an annualized basis;
(3) The qualifying [ethanol] biofuel
production facility is in production on or before January 1, 2017; and
(4) No taxpayer that claims the credit under this section shall claim any other tax credit under this chapter for the same taxable year.
(b) As used in this section:
"Credit period" means a maximum
period of eight years beginning from the first taxable year in which the
qualifying [ethanol] biofuel production facility begins
production even if actual production is not at seventy-five per cent of
nameplate capacity.
"Investment" means a nonrefundable
capital expenditure related to the development and construction of any
qualifying [ethanol] biofuel production facility, including
processing equipment, waste treatment systems, pipelines, and liquid storage
tanks at the facility or remote locations, including expansions or
modifications. Capital expenditures shall be those direct and certain indirect
costs determined in accordance with section 263A (with respect to
capitalization and inclusion in inventory costs of certain expenses) of the
Internal Revenue Code, relating to uniform capitalization costs, but shall not
include expenses for compensation paid to officers of the taxpayer, pension and
other related costs, rent for land, the costs of repairing and maintaining the
equipment or facilities, training of operating personnel, utility costs during
construction, property taxes, costs relating to negotiation of commercial agreements
not related to development or construction, or service costs that can be
identified specifically with a service department or function or that directly
benefit or are incurred by reason of a service department or function. For the
purposes of determining a capital expenditure under this section, the
provisions of section 263A of the Internal Revenue Code shall apply as it read
on March 1, 2004. For purposes of this section, investment excludes land
costs and includes any investment for which the taxpayer is at risk, as that
term is used in section 465 (with respect to deductions limited to amount at
risk) of the Internal Revenue Code [(with respect to deductions limited
to amount at risk)].
"Nameplate capacity" means the
qualifying [ethanol] biofuel production facility's production
design capacity, in gallons of motor fuel grade [ethanol] biofuel
per year. Nameplate capacity shall be determined by the facility owner and
shall not exceed the amount of production actually recorded during a consecutive
seven-day period multiplied by fifty-two.
"Net income tax liability" means net income tax liability reduced by all other credits allowed under this chapter.
"Qualifying [ethanol] biofuel
production" means ethanol or biodiesel produced from renewable,
organic feedstocks, or waste materials, including fats, oils, grease, and
municipal solid waste. All qualifying production shall be fermented,
distilled, gasified, or produced by physical chemical conversion methods such
as reformation and catalytic conversion and dehydrated at the facility.
"Qualifying [ethanol] biofuel
production facility" or "facility" means a facility located in
Hawaii which produces motor fuel grade [ethanol] biofuel meeting
the minimum specifications by the American Society of Testing and Materials
standard D-4806, as amended.
(c) In the case of a taxable year in which the
cumulative claims for the credit by the taxpayer of a qualifying [ethanol]
biofuel production facility exceeds the cumulative investment made in
the qualifying [ethanol] biofuel production facility by the
taxpayer, only that portion that does not exceed the cumulative investment
shall be claimed and allowed.
(d) The department of business, economic development, and tourism shall:
(1) Maintain records of the total amount of investment made by each taxpayer in a facility;
(2) Verify the amount of the qualifying investment;
(3) Total all qualifying and cumulative investments that the department of business, economic development, and tourism certifies; and
(4) Certify the total amount of the tax credit for each taxable year and the cumulative amount of the tax credit during the credit period.
Upon each determination, the department of business, economic development, and tourism shall issue a certificate to the taxpayer verifying the qualifying investment amounts, the credit amount certified for each taxable year, and the cumulative amount of the tax credit during the credit period. The taxpayer shall file the certificate with the taxpayer's tax return with the department of taxation. Notwithstanding the department of business, economic development, and tourism's certification authority under this section, the director of taxation may audit and adjust certification to conform to the facts.
If in any year, the annual amount of certified credits reaches $12,000,000 in the aggregate, the department of business, economic development, and tourism shall immediately discontinue certifying credits and notify the department of taxation. In no instance shall the total amount of certified credits exceed $12,000,000 per year. Notwithstanding any other law to the contrary, this information shall be available for public inspection and dissemination under chapter 92F.
(e) If the credit under this section exceeds
the taxpayer's income tax liability, the excess of credit over liability shall
be refunded to the taxpayer; provided that no refunds or payments on account of
the tax credit allowed by this section shall be made for amounts less than $1.
All claims for a credit under this section [must] shall be
properly 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
the foregoing provision shall constitute a waiver of the right to claim the
credit.
(f) If a qualifying [ethanol] biofuel
production facility or an interest therein is acquired by a taxpayer prior to
the expiration of the credit period, the credit allowable under subsection (a)
for any period after [such] the acquisition shall be equal to the
credit that would have been allowable under subsection (a) to the prior
taxpayer had the taxpayer not disposed of the interest. If an interest is
disposed of during any year for which the credit is allowable under subsection
(a), the credit shall be allowable between the parties on the basis of the
number of days during the year the interest was held by each taxpayer. In no
case shall the credit allowed under subsection (a) be allowed after the
expiration of the credit period.
(g) Once the total nameplate capacities of
qualifying [ethanol] biofuel production facilities built within
the State reaches or exceeds a level of forty million gallons per year, credits
under this section shall not be allowed for new [ethanol] biofuel
production facilities. If a new facility's production capacity would cause the
statewide [ethanol] biofuel production capacity to exceed forty
million gallons per year, only the [ethanol] biofuel production
capacity that does not exceed the statewide forty million gallon per year level
shall be eligible for the credit.
(h) Prior to construction of any new
qualifying [ethanol] biofuel production facility, the taxpayer
shall provide written notice of the taxpayer's intention to begin construction
of a qualifying [ethanol] biofuel production facility. The
information shall be provided to the department of taxation and the department
of business, economic development, and tourism on forms provided by the
department of business, economic development, and tourism, and shall include
information on the taxpayer, facility location, facility production capacity,
anticipated production start date, and the taxpayer's contact information.
Notwithstanding any other law to the contrary, this information shall be
available for public inspection and dissemination under chapter 92F.
(i) The taxpayer shall provide written notice
to the director of taxation and the director of business, economic development,
and tourism within thirty days following the start of production. The notice
shall include the production start date and expected [ethanol fuel] biofuel
production for the next twenty-four months. Notwithstanding any other law to
the contrary, this information shall be available for public inspection and
dissemination under chapter 92F.
(j) If a qualifying [ethanol] biofuel
production facility fails to achieve an average annual production of at least
seventy-five per cent of its nameplate capacity for two consecutive years, the
stated capacity of that facility may be revised by the director of business,
economic development, and tourism to reflect actual production for the purposes
of determining statewide production capacity under subsection (g) and allowable
credits for that facility under subsection (a). Notwithstanding any other law
to the contrary, this information shall be available for public inspection and
dissemination under chapter 92F.
(k) Each calendar year during the credit
period, the taxpayer shall provide information to the director of business,
economic development, and tourism on the number of gallons of [ethanol] biofuel
produced and sold during the previous calendar year, how much was sold in
Hawaii versus overseas, percentage of Hawaii-grown feedstocks and
other feedstocks used for [ethanol] biofuel production, the
number of employees of the facility, and the projected number of gallons of [ethanol]
biofuel production for the succeeding year.
(l) In the case of a partnership, S
corporation, estate, or trust, the tax credit allowable is for every qualifying
[ethanol] biofuel production facility. 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).
(m) Following each year in which a credit
under this section has been claimed, the director of business, economic
development, and tourism shall submit a written report to the governor and
legislature regarding the production and sale of [ethanol] biofuel.
The report shall include:
(1) The number, location, and nameplate capacities of
qualifying [ethanol] biofuel production facilities in the State;
(2) The total number of gallons of [ethanol] biofuel
produced and sold during the previous year; and
(3) The projected number of gallons of [ethanol]
biofuel production for the succeeding year.
(n) The director of taxation shall prepare forms that may be necessary to claim a credit under this section. Notwithstanding the department of business, economic development, and tourism's certification authority under this section, the director may audit and adjust certification to conform to the facts. The director may also require the taxpayer to furnish 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."
SECTION 2. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.
SECTION 3. This Act, upon its approval, shall apply to taxable years beginning after December 31, 2008.
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INTRODUCED BY: |
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