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. 2838 entitled:

begs leave to report as follows:

The purpose of this bill is to promote the development of a hydrogen-based energy economy in Hawaii by allocating fifty percent of all geothermal royalties received by the State to the Department of Business, Economic Development, and Tourism (DBEDT) to fund hydrogen research and development as an energy source.

The Hawaii Renewable Energy Alliance testified in support of the bill. Testimony in support of the intent of the measure was submitted by DBEDT. The Department of Land and Natural Resources (DLNR) testified in opposition to the bill.

In fiscal year 2000-2001, $717,658 in royalties were generated by geothermal mining leases. Twenty percent of the royalties was transferred to the Office of Hawaiian Affairs, 30 percent went to the County of Hawaii, and the remaining 50 percent was credited to the Special Land and Development Fund administered by DLNR.

Recognizing that DLNR with its share of the geothermal royalties must cover the required recurring and future anticipated and unanticipated expenses of the geothermal program, your Committee has amended this measure by allocating the specific sum of $250,000 per year from the State's share of the geothermal royalties to DBEDT to fund hydrogen research and development as an alternative energy source.

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. 2838, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 2838 H.D. 1, and be referred to the Committee on Finance.