§235-12  Energy conservation; income taxcredit.  (a)  For taxable years ending before January 1, 1990, except inthe case of ice storage systems for taxable years ending before January 1,1991, each individual and corporate resident taxpayer who files an individualor corporate net income tax return for a taxable year, may claim a tax creditunder this section against the Hawaii state individual or corporate net incometax.  The tax credit may be claimed for any solar or wind energy device, heatpump, or ice storage system in an amount not to exceed ten per cent of thetotal cost of the device, heat pump, or ice storage system; provided that thetax credit shall apply only to the actual cost of the solar or wind energydevice, the heat pump, or ice storage system, their accessories, andinstallation and shall not include the cost of consumer incentive premiumsunrelated to the operation of the solar or wind energy device, the heat pump,or ice storage system offered with the sale of the solar or wind energy device,the heat pump, or ice storage system.  The credit shall be claimed against netincome tax liability for the year in which the solar or wind energy device, theheat pump, or ice storage system was purchased and placed in use; provided:

(1)  The tax credit shall be applicable only withrespect to solar devices, which are erected and placed in service afterDecember 31, 1974, but before January 1, 1990;

(2)  In the case of wind energy devices and heatpumps, the tax credit shall be applicable only with respect to wind energydevices and heat pumps which are installed and placed in service after December31, 1980, but before January 1, 1990; and

(3)  In the case of ice storage systems, the taxcredit shall be applicable only with respect to ice storage systems which areinstalled and placed in service after December 31, 1985, but before January 1,1990.

Tax credits which exceed the taxpayer's income taxliability may be used as a credit against the taxpayer's income tax liabilityin subsequent years until exhausted.  If federal energy tax credits are notextended beyond December 31, 1985, are not retroactively extended or reenacted,or federal energy tax credits the same as or less in amount than the credits ineffect during the 1985 taxable year are not enacted during the taxable year1986, then the state tax credit shall be increased to fifteen per cent of thetotal cost after December 31, 1985, but before January 1, 1990.

As used in this subsection:

"Solar or wind energy device" meansany new identifiable facility, equipment, apparatus, or the like which makesuse of solar or wind energy for heating, cooling, or reducing the use of othertypes of energy dependent upon fossil fuel for their generation.

"Heat pump" means and refers to anelectric powered compression heating system which extracts energy from warmambient air or recovers waste heat to assist in the production of hot water.

"Ice storage system" refers to icebanks or other cool energy storage tanks, containers, accessories, and controlsthat are specifically designed to store ice or chilled fluids for the expresspurpose of shifting the consumption of energy to off-peak periods.

(b)  For taxable years beginning after December31, 1989, each individual or corporate resident taxpayer who files anindividual or corporate net income tax return for a taxable year, may claim atax credit under this section against the Hawaii state individual or corporatenet income tax.  The tax credit may be claimed as follows:

(1)  For wind energy systems that are installed andplaced in service after December 31, 1989, but before July 1, 2003, the creditshall be twenty per cent of the actual cost;

(2)  For solar energy systems that are installed andplaced in service after December 31, 1989, but before July 1, 2003, on new andexisting single family residential buildings, the credit shall be in an amountnot to exceed thirty-five per cent or $1,750, whichever is less, of the actualcost of the solar energy system;

(3)  For solar energy systems that are installed andplaced in service after December 31, 1989, but before July 1, 2003, on new andexisting multiunit buildings used primarily for residential purposes, thecredit shall be in an amount not to exceed thirty-five per cent or $350 perbuilding unit, whichever is less, of the actual cost of the solar energysystem;

(4)  For solar energy systems that are installed andplaced in service after December 31, 1989, but before July 1, 2003, in new andexisting hotel, commercial, and industrial facilities, the credit shall be inan amount not to exceed thirty-five per cent of the actual cost of the solarenergy system;

(5)  For heat pumps that are installed and placed inservice after December 31, 1989, but before July 1, 2003, in new and existingsingle-family residential buildings, the credit shall be in an amount not toexceed twenty per cent or $400, whichever is less, of the actual cost of theheat pump;

(6)  For heat pumps that are installed and placed inservice after December 31, 1989, but before July 1, 2003, in new and existingmultiunit buildings used primarily for residential purposes, the credit shallbe in an amount not to exceed twenty per cent or $200 per building unit,whichever is less, of the actual cost of the heat pump; provided that alicensed professional engineer reviews the design of the system and provides awritten opinion that the system, in accordance with recognized engineeringpractice, is designed to provide not less than ninety per cent of the dailyannual average hot water needs of all of the occupants of the building;

(7)  For heat pumps that are installed and placed inservice after December 31, 1989, but before July 1, 2003, in new and existinghotel, commercial, and industrial facilities, the credit shall be in an amountnot to exceed twenty per cent of the actual cost of the heat pump; and

(8)  For ice storage systems that are installed andplaced in service after December 31, 1990, but before July 1, 2003, the creditshall be in an amount not to exceed fifty per cent of the actual cost of theice storage system.

The per unit of actual cost of a solar energy systemor heat pump referred to in subsection (b)(3) and (6) shall be determined bymultiplying the actual cost of the solar energy system or heat pump installedand placed in service in the multiunit building by a fraction, the numeratorbeing the total square feet of that unit in the multiunit building, and thedenominator being the total square feet of all the units in the multiunitbuilding.

If federal energy tax credits similar to any ofthose provided in paragraphs (1) to (8) are established after June 30, 1998,but before July 1, 2003, then the state tax credit provided in the respectiveparagraph or paragraphs shall be reduced by the amount of the applicablefederal energy tax credit.

(c)  Tax credits shall apply only to the actualcost of the solar or wind energy system, heat pump, or ice storage system,including their accessories and installation, and shall not include the cost ofconsumer incentive premiums unrelated to the operation of the system or offeredwith the sale of the system or heat pump.  The tax credit shall be claimedagainst net income tax liability for the year in which the solar or wind energysystem, heat pump, or ice storage system was purchased and placed in use inHawaii.  Tax credits that exceed the taxpayer's income tax liability may beused as credit against the taxpayer's income tax liability in subsequent yearsuntil exhausted.

(d)  The director of taxation shall preparesuch forms as may be necessary to claim a credit under this section.  Thedirector may also require the taxpayer to furnish reasonable information toascertain the validity of the claim for credit made under this section and mayadopt rules necessary to effectuate the purposes of this section pursuant tochapter 91.

(e)  As used in this section:

"Solar or wind energy system" meansany new identifiable facility, equipment, apparatus, or the like that convertssolar insolation or wind energy to useful thermal or electrical energy forheating, cooling, or reducing the use of other types of energy dependent uponfossil fuel for their generation.

"Heat pump" means an electric poweredcompression heating system that extracts energy from warm ambient air orrecovers waste heat to assist in the production of hot water.

"Ice storage system" refers to icebanks or other cool energy storage tanks, containers, accessories, and controlsthat are specifically designed to store ice or chilled fluids for the expresspurpose of shifting the consumption of energy to off-peak periods. [L 1976, c189, §1; am L 1980, c 177, §2; am L 1981, c 233, §1; am L 1983, c 67, §1; am L1985, c 232, §2; gen ch 1985; am L 1986, c 66, §1, c 70, §1, and c 339, §18; amL 1989, c 307, §2; am L 1990, c 319, §3; am L 1993, c 93, §1; am L 1998, c 163,§2]