STAND. COM. REP. NO. 2041

                                   Honolulu, Hawaii
                                                     , 2000

                                   RE:  S.B. No. 2549
                                        S.D. 1




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

Sir:

     Your Committee on Economic Development, to which was
referred S.B. No. 2549 entitled: 

     "A BILL FOR AN ACT RELATING TO ENERGY CONSERVATION TAX
     CREDITS,"

begs leave to report as follows:

     The purpose of this measure is to repeal the sunset date for
solar energy systems tax credits.

     Testimony in favor of this measure was submitted by the
Hawaii Solar Energy Association, the Hawaii Renewable Energy
Alliance, Rezachek & Associates, Na Leo Pohai, the Sierra Club,
Hawai`i Chapter, and Life of the Land.  The Department of
Taxation testified in opposition.  Hawaiian Electric Company,
Inc., submitted comments.

     Your Committee finds that repeal of the sunset date for all
energy system tax credits, wind, solar, heat pumps, and ice
storage systems will promote the State's policy to decrease our
use of imported fossil energy and increase the use of indigenous
resources.  These tax credits are an investment for the State,
and leverage private investment that helps to sustain existing
jobs and support Hawaii businesses.

     Your Committee has also heard the concerns that this measure
would actually reduce energy alternatives for residents.  Some
residents may find that a heat pump, wind, or thermal storage
system would be preferable to a solar system, but these

 
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                                   STAND. COM. REP. NO. 2041
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alternative systems would no longer be eligible for the tax
credit after July 1, 2003, under the measure as introduced.  Your
Committee has therefore amended this measure to repeal the sunset
date of July 1, 2003, for all the energy conservation tax credits
provided under Section 235-12, Hawaii Revised Statutes, making
these tax credits permanent.  Your Committee has also made a
technical amendment to correct the ramseyer language in
section 2.

     As affirmed by the record of votes of the members of your
Committee on Economic Development that is attached to this
report, your Committee is in accord with the intent and purpose
of S.B. No. 2549, as amended herein, and recommends that it pass
Second Reading in the form attached hereto as S.B. No. 2549,
S.D. 1, and be referred to the Committee on Ways and Means.

                                   Respectfully submitted on
                                   behalf of the members of the
                                   Committee on Economic
                                   Development,



                                   ______________________________
                                   LORRAINE R. INOUYE, Chair

 
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