Legislature advances bill to extend solar tax credit

By Sean Hao
Advertiser Staff Writer

State lawmakers yesterday advanced a bill to extend tax credits for the purchase of solar water heaters until 2008. At the same time, a tax credit for the airline industry was among several business tax incentives that did not survive for floor votes in the House and Senate before last night's deadline.

The bill to extend the current 35 percent income tax credit for solar water heaters and a 20 percent tax credit for wind-power systems goes to representatives and senators next week. The current renewable energy credit program, which costs between $4 million and $5 million a year, expires June 30.

Advocates of the tax credit, which include sellers of solar water heaters, contend the technologies reduce the state's demand for oil used to drive electrical power plants. Lawmakers plan to maintain the credit at its current level, which equates to 35 percent of the cost of such a system or a maximum of $1,750 per residence, whichever is less.

Also advancing was a bill to allow the Hawai'i Tourism Authority to spend an additional $8 million from the Tourism Special Fund for visitor marketing as recommended by the House Select Committee on War Preparedness. The measure would also allow the tourism authority to hire its own sports coordinator instead of contracting for one. The bill also requires the tourism authority to notify legislative leaders of any contract or agreement valued at $25,000 and over and directs the tourism authority to hire a certified public accountant to annually audit its finances.

In deciding which tax credits to support, lawmakers were constrained by lower-than-anticipated growth in tax collections. In addition, the Tax Review Commission earlier in the session criticized the Legislature for previously passing tax credits that lacked accountability and were overly generous.

Tax incentives that didn't make it out of earlier committees include: two different job creation tax credits, a commercial construction tax credit, and tax credits for major construction projects, renaissance zones and certain agricultural areas.

Among the tax-related measures that essentially died this session were:

• A tax credit to offset airport landing fees for airlines. The bill would have authorized the Department of Transportation to waive landing fees and other airport fees paid by airlines for 30 days and would have deferred those fees for two subsequent 30-day periods for qualifying carriers.

• A bill that would have required that companies benefitting from tax breaks and other development assistance disclose the amount of aid received as well as job and wage information for any new positions created.

• An extension of a tax credit for the installation of heat pump and ice storage systems.

Reach Sean Hao at 525-8093 or shao@honoluluadvertiser.com.