STAND. COM. REP. NO. 144-00

                                 Honolulu, Hawaii
                                                   , 2000

                                 RE: H.B. No. 2183
                                     H.D. 1




Honorable Calvin K.Y. Say
Speaker, House of Representatives
Twentieth State Legislature
Regular Session of 2000
State of Hawaii

Sir:

     Your Committees on Energy and Environmental Protection and
Agriculture, to which was referred H.B. No. 2183 entitled: 

     "A BILL FOR AN ACT RELATING TO THE ISSUANCE OF SPECIAL
     PURPOSE REVENUE BONDS TO ASSIST INDUSTRIAL ENTERPRISES,"

beg leave to report as follows:

     The purpose of this bill is to support the construction of
fuel grade ethanol production facilities and thereby promote
energy self-sufficiency and economic development in this State.
This bill authorizes the issuance of $80,000,000 in special
purpose revenue bonds to assist the Worldwide Energy Group, Inc.,
in developing ethanol facilities on Kauai as well as other
locations in the State.

     Ethanol can be produced from agricultural crops or by-
products as well as municipal solid wastes.  Up to ten percent of
ethanol can be blended in gasoline without altering the
performance or operating reliability of gasoline-powered
vehicles.

     Your Committees find that the development of ethanol
facilities could have a major impact on the future of the sugar
industry in Hawaii.  On Kauai, Gay & Robinson, Inc., continues to
seek higher value uses of its molasses and bagasse.  Since these
products are excellent feedstocks for producing ethanol, Gay &
Robinson is pursuing a joint venture with the Worldwide Energy
Group, Inc., to develop an ethanol facility on that island.
However, to make this an economically viable project, financing

 
 
                                 STAND. COM. REP. NO. 144-00
                                 Page 2

 
through the issuance of special purpose revenue bonds is
necessary.

     Supporting testimony was presented by the Worldwide Energy
Group, Inc., Gay & Robinson, Inc., and the Aina Institute for
Bioconversion Technology.  The Department of Business, Economic
Development, and Tourism supported the intent of this measure,
and the Department of Budget and Finance offered comments.

     Your Committees have amended this bill by:

     (1)  Reducing the amount of issuance from $80,000,000 to
          $50,000,000 to reflect the amount required for the
          first phase of development; and

     (2)  Making technical, nonsubstantive amendments for
          purposes of style and clarity.

     As affirmed by the records of votes of the members of your
Committees on Energy and Environmental Protection and Agriculture
that are attached to this report, your Committees are in accord
with the intent and purpose of H.B. No. 2183, as amended herein,
and recommend that it pass Second Reading in the form attached
hereto as H.B. No. 2183, H.D. 1, and be referred to the Committee
on Finance.

                                   Respectfully submitted on
                                   behalf of the members of the
                                   Committees on Energy and
                                   Environmental Protection and
                                   Agriculture,

                                   
                                   
                                   
                                   
______________________________     ______________________________
FELIPE P. ABINSAY, JR., Chair      HERMINA M. MORITA, Chair