Honorable Robert Bunda

President of the Senate

Twenty-First State Legislature

Regular Session of 2001

State of Hawaii

Sir:

Your Committees on Water, Land, Energy and Environment and Economic Development and Technology, to which was referred S.B. No. 1435 entitled:

beg leave to report as follows:

The purpose of this measure is to establish a hydrogen private-public partnership within the Department of Business, Economic Development, and Tourism, with assistance from the Hawaii Natural Energy Institute of the University of Hawaii.

Your Committees received testimony in support of this measure from the Department of Business, Economic Development, and Tourism, Hawaii Natural Energy Institute (HNEI) of the University of Hawaii, County of Hawaii, Hawaiian Electric Company, Inc., The Gas Company, The Hydrogen Renewable Energy Enterprise, LLC, and Hawaii Renewable Energy Alliance.

Your Committees find that the development of hydrogen technology has the potential to provide a significant benefit in efforts to improve Hawaii's economy, particularly in the technology sector. Costs associated with producing fuel cells that can be powered by hydrogen have fallen dramatically, and investors have been putting large sums of money into this promising technology. Goldman Sachs recently estimated that this would represent a $95,000,000,000 market in ten years.

Your Committees further find that in the short term, high value niche applications can contribute in Hawaii enabling early market entry and public acceptance of hydrogen technologies.

Your Committees have amended this measure to:

Your Committees support the federal and private matching requirements of this measure, and urge the parties involved to work with Hawaii's congressional delegation, and involve the nonprofit community in seeking resources for hydrogen technology. Your Committees further urge the Governor to make the development of hydrogen technology a priority, and to provide funding for its development within the budget ceiling allowed in the state constitution.

As affirmed by the records of votes of the members of your Committees on Water, Land, Energy and Environment and Economic Development and Technology that are attached to this report, your Committees are in accord with the intent and purpose of S.B. No. 1435, as amended herein, and recommend that it pass Second Reading in the form attached hereto as S.B. No. 1435, S.D. 1, and be referred to the Committee on Ways and Means.