STAND. COM. REP. NO. 2924

                                   Honolulu, Hawaii
                                                     , 2000

                                   RE:  H.B. No. 2539
                                        H.D. 2




Honorable Norman Mizuguchi
President of the Senate
Twentieth State Legislature
Regular Session of 2000
State of Hawaii

Sir:

     Your Committee on Labor and Environment, to which was
referred H.B. No. 2539, H.D. 2, entitled: 

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

begs leave to report as follows:

     The purpose of this measure is to change the state
environmental response tax rate levied upon petroleum products
and to expand the uses of the environmental response revolving
fund for environmental protection programs.

     Testimony in support of this measure was received from the
Department of Health, Department of Business, Economic
Development & Tourism, Department of Land and Natural Resources,
Department of Taxation, Hawaii Association of Conservation
Districts, Hawaiian Electric Company, Maui Electric Company, and
Hawaii Electric Light Company.  Testimony in opposition to this
measure was received from Western States Petroleum Association,
Hawaii Agriculture Research Center, Hawaii Transportation
Association, Airlines Committee of Hawaii, Hawaii Fueling
Facilities Corporation, Kauai Electric and The Gas Company,
Tesoro Hawaii Corporation, Chevron, Matson Navigation Company,
and the Waialua Farmers Cooperative.  Comments were received from
the Department of Budget and Finance, Environmental Center, and
the Tax Foundation of Hawaii.

     Although originally intended for catastrophic hazardous
substance spills, use of the environmental response revolving

 
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                                   STAND. COM. REP. NO. 2924
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fund has been expanded to include environmental protection
programs that address environmental contamination resulting from
petroleum or petroleum-based products.  Since state revenues have
not been available for other environmental protection efforts,
your Committee finds it appropriate to adjust the environmental
response tax and expand the revolving fund's uses.  This measure
will establish a "polluter pays" principle to directly fund
environmental protection activities.

     As affirmed by the record of votes of the members of your
Committee on Labor and Environment that is attached to this
report, your Committee is in accord with the intent and purpose
of H.B. No. 2539, H.D. 2, and recommends that it pass Second
Reading and be referred to the Committee on Ways and Means.

                                   Respectfully submitted on
                                   behalf of the members of the
                                   Committee on Labor and
                                   Environment,



                                   ______________________________
                                   BOB NAKATA, Chair

 
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