STAND. COM. REP. NO. 349-00

                                 Honolulu, Hawaii
                                                   , 2000

                                 RE: H.B. No. 2539
                                     H.D. 1




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

Sir:

     Your Committee on Energy and Environmental Protection, to
which was referred H.B. No. 2539 entitled: 

     "A BILL FOR AN ACT RELATING TO THE ENVIRONMENTAL RESPONSE
     REVOLVING FUND,"

begs leave to report as follows:

     The purpose of this bill is to improve the environmental
quality of this State by ensuring that adequate sources of
funding are available and dedicated to support this effort.  This
bill:

     (1)  Increases the environmental response tax on petroleum
          from five to twenty-five cents per barrel sold by a
          distributor to any retail dealer or end user; and

     (2)  Expands the uses of the Environmental Response
          Revolving Fund to provide financial support to a
          variety of environmental protection and natural
          resource protection programs including energy
          conservation and alternative energy development, and to
          address concerns related to air quality, global
          warming, clean water, polluted runoff, and solid and
          hazardous waste.

     The Department of Health, the Office of Planning, the
Department of Land and Natural Resources, the Sierra Club, Hawaii
Chapter, the Hawaii Association of Conservation Districts, and
one individual testified in support of this measure.  Opposing

 
 
                                 STAND. COM. REP. NO. 349-00
                                 Page 2

 
this bill were the Airlines Committee of Hawaii, Hawaiian
Commercial and Sugar Company, Kauai Electric, The Gas Company,
the Hawaii Transportation Association, Tesoro Hawaii, Kalaeloa
Partners L.P., and Hawaiian Electric Company and its subsidiary
utilities, Maui Electric Company and Hawaii Electric Light
Company.  The Department of Taxation, the Tax Foundation of
Hawaii, the University of Hawaii's Environmental Center, and one
individual offered comments.

     Your Committee has amended this bill by:

     (1)  Removing the requirement that an unspecified amount of
          the environmental response tax be used to address
          concerns relating to drinking water; and

     (2)  Making technical, nonsubstantive amendments for the
          purpose of style.

     Your Committee recognizes the need to identify an equitable
means to require the polluter to pay to protect the environment.
Because this measure may be critical to the development of the
supplemental biennium budget, it is your Committee's intent that
discussion continue on this issue.

     As affirmed by the record of votes of the members of your
Committee on Energy and Environmental Protection that is attached
to this report, your Committee is in accord with the intent and
purpose of H.B. No. 2539, as amended herein, and recommends that
it pass Second Reading in the form attached hereto as H.B. No.
2539, H.D. 1, and be referred to the Committee on Finance.

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



                                   ______________________________
                                   HERMINA M. MORITA, Chair