RELATING TO THE RENEWABLE FUELS PRODUCTION TAX CREDIT.

SB2376

THE SENATE

S.B. NO.

2376

THIRTY-THIRD LEGISLATURE, 2026

STATE OF HAWAII

A BILL FOR AN ACT

relating
to the renewable fuels production tax credit
.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

����
SECTION
1
.
�
Section 235-110.32, Hawaii Revised Statutes,
is amended as follows:

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1.
�
By
amending subsection (a) to read:

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"(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.

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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 equal to
20
cents per seventy-six thousand British thermal units
of renewable fuels
using the lower heating value
for which qualified
renewable fuel production costs are incurred within the State and
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
per taxable year; 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.

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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
]
a separate
ten-year credit
period[
.
]
for each separate qualified renewable fuels production that
meets the eligibility requirements of this section.
"

2.
�
By amending subsection
(c) to read:

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"(c)
�

No later than [
thirty
]
ninety
days following the close of
the calendar year, every taxpayer claiming a credit under this section shall
complete and file an independent, third-party certified statement, at the
taxpayer's sole expense, with and in the form prescribed by the Hawaii state
energy office, providing the following information:

����
(1)
�
The
type, quantity, and British thermal unit value, using the lower heating value,
of each qualified fuel, broken down by the type of fuel, produced and sold
during the previous calendar year;

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(2)
�
The
feedstock used for each type of qualified fuel;

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(3)
�
The
proposed total amount of credit to which the taxpayer is entitled for each
calendar year and the cumulative amount of the tax credit the taxpayer received
during the credit period;

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(4)
�
The
number of full-time and number of part-time employees of the facility [
and
those employees' states of residency, totaled per state
];

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(5)
�
The
number and
state
location of all renewable fuel production facilities [
within
and outside of the State
]; and

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(6)
�
The
lifecycle greenhouse gas emissions per British thermal units for each type of
qualified fuel produced."

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3.
�
By
amending subsections (f) and (g) to read:

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"(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[
.
]
; provided
that, if the total amount of credits applied for in any particular year exceeds
the aggregate amount of credits allowed for that year under this section, the
excess shall be treated as having been applied for in the subsequent year and
shall be claimed in the subsequent year.

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(g)
�

Notwithstanding any other law to the contrary, the information collected
and compiled by the Hawaii state energy office under subsections (c) and (d)
for the purposes of the renewable fuels production tax credit shall be available
for public inspection and dissemination, subject to chapter 92F[
.
]
;
provided that any information under subsections (c), (d), (k), and (l)
identifying the specific location of a renewable fuel production facility, or
information that is determined to constitute critical energy infrastructure
information pursuant to section 215A(d) of the Federal Power Act (16 U.S.C.
824o-1), the disclosure of which could reasonably be expected to jeopardize the
security, safety, or operational resilience of critical energy infrastructure,
shall be treated as confidential and exempt from public disclosure.
"

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4.
�
By
amending subsection (k) to read:

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"(k)
�

Before the production of any renewable fuels for the calendar year, the
taxpayer shall provide written notice of the taxpayer's intention to begin
production of renewable fuels.
�
The
written notice shall be provided to the department of taxation and the Hawaii
state energy office and shall include information on the taxpayer,
state

facility location, facility production capacity, anticipated production start
date, and the taxpayer's contact information.
�

Notwithstanding any other law to the contrary, the written notice
described in this subsection, including taxpayer and facility information,
shall be available for public inspection and dissemination, subject to chapter
92F."

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5.
�
By
amending subsection (m) to read:

����
"(m)
�

Following each calendar year in which a credit under this section has
been claimed, the chief energy officer of the Hawaii state energy office shall
submit a written report to the governor and legislature regarding the
production and sale of renewable fuels.
�

The report shall include:

����
(1)
�
The
number and
state
location of renewable fuels production facilities [
in
the State and outside the State
] that have claimed a credit under this
section;

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(2)
�
The
total number of British thermal units of renewable fuels, itemized by type of
fuel produced and sold during the previous calendar year; and

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(3)
�
The
projected number of British thermal units of renewable fuels production for the
succeeding year."

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SECTION 2.
�

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

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SECTION 3.
�
This Act, upon its approval, shall apply to
taxable years beginning after December 31, 2025.

INTRODUCED
BY:

_____________________________

Report Title:

Renewable
Fuels Production Tax Credit; Renewable Fuels Production

Description:

For
taxable years beginning 1/1/2026, clarifies that the Renewable Fuels Production
Tax Credit shall only be claimed by taxpayers for which qualified renewable
fuels production costs
�
are incurred
within the State and sold for distribution within the State.
�
Allows taxpayers to be eligible for a
separate ten-year credit period for each separate qualified renewable fuels
production that independently meets eligibility requirements.
�
Extends the time frame for taxpayers to file
certain statements with the Hawaii State Energy Office.

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not legislation or evidence of legislative intent.