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The New Rules Project - Designing Rules As If Community Matters

Hawaii Ethanol Investment Tax Credit

In early 2000, legislation passed in Hawaii to provide tax credits for the production of ethanol in the state. The new law will help sugar growers on Kauai and Maui by offering incentives to use molasses and other wastes as the feedstock for ethanol. Supporters also hope the possibility of using municipal solid waste as a feedstock will cut down on the amount of waste being landfilled. Manufacturers that produce between 500,000 and one million gallons of ethanol will receive a non refundable 30% investment tax credit or $150,000, whichever is less. The credit increases for producers that manufacture more ethanol, capping at 30% or $4.5 million dollars for companies that produce over 15 million gallons per year. The credit period runs for a maximum of eight years. In addition, once the combined nameplate capacities of facilities operating in the state meet or exceed 40 million gallons per year, no new claims will be allowed under the bill. "Nameplate capacity" is defined as a facility's production design capacity.

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