STAND. COM. REP. NO. 2187

                                   Honolulu, Hawaii
                                                     , 2000

                                   RE:  S.B. No. 2880
                                        S.D. 1




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 S.B. No. 2880 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 increase the state
environmental response tax levied upon petroleum products and to
expand the uses of the environmental response revolving fund for
environmental protection programs.

     Testimony in favor of this measure was received from the
Department of Health, Department of Land and Natural Resources,
Department of Taxation, Sierra Club, and one individual.
Testimony in opposition to the measure was received from the
Airlines Committee of Hawaii, Hawaii Fueling Facilities
Corporation, Hawaii Transportation Association, Hawaiian
Commercial and Sugar Company, Kalaeloa Partners, L.P., Hawaiian
Electric Company, Maui Electric Company, Hawaii Electric Light
Company, Tesoro Hawaii Corporation, Kauai Electric and The Gas
Company, and the Hawaii Agriculture Research Center.  Comments on
the measure were received from the Tax Foundation of Hawaii and
the Environmental Center.  Oral testimony in support of the
measure was received from the Hawaii Association of Conservation
Districts.

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

 
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                                   STAND. COM. REP. NO. 2187
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fund has been expanded to include protection programs.  Since
state revenues have not been available for protection efforts,
your Committee finds it appropriate to increase 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.

     Your Committee amended the measure by changing the tax on
each barrel from the proposed 25 cents to 10 cents.

     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 S.B. No. 2880, as amended herein, and recommends that it pass
Second Reading in the form attached hereto as S.B. No. 2880,
S.D. 1, 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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