Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-First State Legislature

Regular Session of 2002

State of Hawaii

Sir:

Your Committee on Energy and Environmental Protection, to which was referred H.B. No. 2236 entitled:

begs leave to report as follows:

The purpose of this bill is to increase the utilization of renewable resources to produce hydrogen by providing an income tax credit equal to 20 percent of the total cost of a geothermal-to-hydrogen system that is collocated on the same or immediately adjacent parcel of land.

The Hawaiian Electric Company, Maui Electric Company, and Hawaii Electric Light Company submitted testimony in support of the bill. The Department of Business, Economic Development, and Tourism submitted testimony supporting the intent of the bill. The Hydrogen Renewable Energy Enterprise, LLC submitted testimony supporting the measure with recommended amendments. The Tax Foundation of Hawaii submitted comments on the bill. The Department of Taxation opposed the measure.

Your Committee finds that geothermal energy is a reliable source of power, and its low cost during late evening and early morning makes it an attractive choice in producing hydrogen. The linking of Hawaii's geothermal resources and the production of hydrogen will enhance existing geothermal output and productivity and establish Hawaii's commitment toward a hydrogen-based economy.

Your Committee has amended this measure by:

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 H.B. No. 2236, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 2236, H.D. 1, and be referred to the Committee on Finance.