Honorable Robert Bunda

President of the Senate

Twenty-First State Legislature

Regular Session of 2001

State of Hawaii

Sir:

Your Committee on Water, Land, Energy and Environment, to which was referred S.B. No. 873 entitled:

begs leave to report as follows:

The purpose of this measure is to extend the deadline for energy conservation income tax credits to 2010.

Your Committee received testimony in support of this measure from the Department of Business, Economic Development, and Tourism (DBEDT, Hawaiian Electric Company, Hawaii Renewable Energy Alliance, Center for a Sustainable Future, Vertical Wind Turbine Technologies, LLC, The Hydrogen Renewable Energy Enterprise, LLC, Hawaii Solar Energy Association, Building Industry Association, Life of the Land, and Sierra Club, Hawaii Chapter. The Tax Foundation of Hawaii and The Gas Company submitted comments.

Your Committee finds that Act 163, Session Laws of Hawaii 1998, extended these tax credits to 2003 and called for DBEDT to establish a task force to examine ways to support increased energy efficiency. As part of this project, DBEDT cosponsored an Energy Efficiency Policy Symposium in November 2000. Symposium participants were supportive of Hawaii's tax credit program, and as a result the task force recommended extending the tax credit to 2010.

Your Committee supports this measure and finds the tax credits to be a successful means of encouraging alternate energy use in Hawaii. Your Committee has amended this measure to include combined heat and power systems among the energy systems eligible for the energy conservation tax credits.

As affirmed by the record of votes of the members of your Committee on Water, Land, Energy and Environment that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 873, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 873, S.D. 1, and be referred to the Committee on Ways and Means.