STAND. COM. REP. NO. 951-00

                                 Honolulu, Hawaii
                                                   , 2000

                                 RE: S.B. No. 800
                                     S.D. 2
                                     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 S.B. No. 800, S.D. 2, entitled: 

     "A BILL FOR AN ACT RELATING TO TAXATION,"

begs leave to report as follows:

     The purpose of this bill is to exempt from the excise tax
amounts received by a wastewater reclamation facility from a
county for processing wastewater and returning the treated water
to the county.

     The Department of Environmental Services (City and County of
Honolulu), the Board of Water Supply, and U.S. Filter Operating
Services, Inc. (USFOS) submitted testimony in support of the
bill.  The Tax Foundation of Hawaii submitted comments to the
bill.  The Department of Taxation submitted testimony in
opposition to the bill.

     This bill will benefit USFOS which was awarded a contract by
the City and County of Honolulu to recycle secondary wastewater,
and provide an incentive for developing joint county and private
wastewater reuse projects.

     Your Committee notes that a similar bill, H.B. No. 839, H.D.
1, passed the House earlier this session after hearings before
your Committees on Energy and Environmental Protection, and
Finance.


 
 
                                 STAND. COM. REP. NO. 951-00
                                 Page 2

 
     After careful consideration, your Committee has amended this
bill by:

     (1)  Conforming its substance to that of H.B. No. 339, H.D.
          1., which uses language that is consistent with the
          provisions of Chapter 340B, Hawaii Revised Statutes,
          relating to wastewater treatment personnel;

     (2)  Changing the effective date of the bill to July 1, 2000
          from the date when it is approved; and

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

     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 S.B. No. 800, S.D. 2, as amended herein, and
recommends that it pass Second Reading in the form attached
hereto as S.B. No. 800, S.D. 2, 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