Honorable Robert Bunda

President of the Senate

Twenty-First State Legislature

Regular Session of 2002

State of Hawaii

Sir:

Your Committee on Ways and Means, to which was referred S.B. No. 2278, S.D. 1, entitled:

begs leave to report as follows:

The purpose of this measure is to allow taxpayers to accelerate depreciation on investments in combined heat and power systems.

Your Committee finds that combined heat and power systems are generally much more fuel-efficient than the electric utility system in meeting energy needs. Combined heat and power systems not only produce electricity on site, avoiding transmission losses, but also harness thermal energy from their exhaust for a variety of functions, including water heating, processing heat, drying, space heating, and air conditioning.

By accelerating the depreciation of investments in combined heat and power systems, this bill provides a tax incentive for and supports the use of combined heat and power systems to ultimately support the State's energy objective of conserving energy.

As affirmed by the record of votes of the members of your Committee on Ways and Means that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 2278, S.D. 1, and recommends that it pass Third Reading.