Bill Text: HI HB1637 | 2010 | Regular Session | Introduced

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Bill Title: Ethanol Facilities; Nameplate Capacity; Tax Credit

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Introduced - Dead) 2009-05-11 - Carried over to 2010 Regular Session. [HB1637 Detail]

Download: Hawaii-2010-HB1637-Introduced.html

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Report Title:

Ethanol Facilities; Nameplate Capacity; Tax Credit

 

Description:

Amends the definition of nameplate capacity for ethanol facilities.  Revises the allowable tax credit for qualified ethanol production facilities to 40 cents per gallon of ethanol produced.  Excludes corn (Zea mays L.) as an organic feedstock for the production of ethanol.

 

HOUSE OF REPRESENTATIVES	H.B. NO.	1637
TWENTY-FIFTH LEGISLATURE, 2009
STATE OF HAWAII

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 as follows:

     1.  By amending subsections (a) and (b) to read:

     "(a)  Each year during the credit period, there shall be allowed to each taxpayer subject to the taxes imposed by this chapter, an ethanol 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] qualifying ethanol production facility, the annual dollar amount of the ethanol facility tax credit during the eight-year period shall be equal to [thirty per cent of its nameplate capacity] forty cents per gallon produced if the nameplate capacity of the qualifying ethanol 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 production facility; provided that:

     (1)  The claim for this credit by any taxpayer of a qualifying ethanol production facility shall not exceed one hundred per cent of the total of all investments made by the taxpayer in the qualifying ethanol production facility during the credit period;

     (2)  The qualifying ethanol 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 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 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 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] 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] 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] 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 production facility's production design capacity, in gallons of motor fuel grade ethanol 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 production" means ethanol or biodiesel produced from renewable, organic feedstocks[,] excluding Zea mays L., 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 production facility" or "facility" means a facility located in Hawaii which produces motor fuel grade ethanol meeting the minimum specifications by the American Society of Testing and Materials standard D-4806, as amended."

     2.  By amending subsection (k) to read:

     "(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 produced and sold during the previous calendar year, how much was sold in Hawaii versus overseas, the percentage of Hawaii-grown feedstocks and the percentage of other feedstocks used for ethanol production, the number of employees of the facility, and the projected number of gallons of ethanol production for the succeeding year."

     SECTION 2.  Statutory material to be repealed is bracketed and stricken.  New statutory material is underscored.

     SECTION 3.  This Act shall take effect upon its approval, and shall apply to taxable years beginning after December 31, 2008.

 

INTRODUCED BY:	_____________________________