Honorable Robert Bunda

President of the Senate

Twenty-First State Legislature

Regular Session of 2002

State of Hawaii

Sir:

Your Committees on Water, Land, Energy and Environment and Tourism and Intergovernmental Affairs, to which was referred S.B. No. 2241 entitled:

beg leave to report as follows:

The purpose of this measure is to increase from thirty per cent to fifty per cent the counties' share of all royalties from geothermal resources.

Testimony in support of this measure was received from the Hawaii County Council. The Department of Land and Natural Resources testified in opposition.

Your Committees find that while geothermal energy has proven to be a viable energy resource, it has generated considerable controversy, particularly in the communities located near the State's only geothermal facility in the Puna region of the Big Island. As a result, the County of Hawaii is faced with additional costs to alleviate the societal and financial problems related to geothermal resource mining.

Your Committees are supportive of the intent of this measure to increase the counties' share of the royalties from geothermal, but believe that such geothermal-related revenues should be expended by the counties to mitigate problems specific to geothermal resource mining, and that these funds should not be spent for general or county-wide needs.

Your Committees have requested information from both the County of Hawaii and the Department of Land and Natural Resources regarding county and state expenditures specific to geothermal resource mining. Your Committees are reporting this measure out for the purposes of further discussion on the merits of the measure, as well as the additional financial information that will be forthcoming.

As affirmed by the records of votes of the members of your Committees on Water, Land, Energy and Environment and Tourism and Intergovernmental Affairs that are attached to this report, your Committees are in accord with the intent and purpose of S.B. No. 2241 and recommend that it pass Second Reading and be referred to the Committee on Ways and Means.