STAND

STAND. COM. REP. NO.855-02

Honolulu, Hawaii

, 2002

RE: S.B. No. 2615

S.D. 2

H.D. 1

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 S.B. No. 2615, S.D. 2, entitled:

"A BILL FOR AN ACT RELATING TO ENERGY,"

begs leave to report as follows:

The purpose of this bill is to implement the recommendations of the Energy Efficiency Policy Task Force (Task Force) by:

(1) Providing an income tax credit equal to an unspecified percentage of the actual cost of a renewable energy technology system or an unspecified dollar amount, whichever is less; and

(2) Requiring the Department of Business, Economic Development, and Tourism (DBEDT) to provide and support efficiency and renewable energy education programs.

The Building Industry Association-Hawaii and Sierra Club, Hawaii Chapter supported this bill. The Task Force, DBEDT, Hawaiian Electric Company, Hawaii Electric Light Company, Maui Electric Company, PowerLight Corporation, Gas Company, Hawaii Renewable Energy Alliance, Hawaii Solar Energy Association, Tax Foundation of Hawaii, R&R Solar Supply, and a concerned individual commented on this measure. The Department of Taxation (DOTAX) opposed this bill.

Your Committee finds that the implementation of the recommendations of the Task Force are necessary to support increased energy efficiency and sustainability in Hawaii. In addition to other actions, your Committee believes that giving specific tax treatment to particular energy systems increases the overall effectiveness of the recommendations. Additionally, periodic evaluation of relevant data, encouraging the Public Utilities Commission (PUC) to support energy efficiency and renewable resources, education programs, and using available federal funds will ensure the attainment of the Task Force objectives and purposes.

Upon careful consideration, your Committee has amended this measure by deleting its substance and inserting provisions found in H.B. No. 2836, H.D. 2, which was reported out of your Committee and crossed over to the Senate earlier this session. The amendments to this bill include:

(1) Establishing an Energy Efficiency Policy Review Commission to periodically review and evaluate, among other matter, whether the tax credits should be continued or enhanced based on impact and cost-benefit analyses;

(2) Providing a renewable energy technologies income tax credit equal to the following percentage of actual cost of the indicated residential, multi-family, or commercial system:

(A) 35 percent for solar thermal;

(B) 20 percent for wind power; and

(3) Authorizing DOTAX to report to the Legislature annually on certain relevant tax credit information, including the number of qualified energy systems by technology and total cost of the tax credits to the State;

(4) Requiring DBEDT to provide and support efficiency and renewable energy programs, including education programs;

(5) Requiring PUC to support increased energy efficiency and renewable resources; and

(6) Requiring the Department of Human Services to the greatest extent possible, use federal funds from low-income home energy assistance programs to install energy saving devices.

Other technical, nonsubstantive amendments were made for clarity, consistency, and style.

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 S.B. No. 2615, S.D. 2, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 2615, S.D. 2, H.D. 1, and be referred to the Committee on Finance.

Respectfully submitted on behalf of the members of the Committee on Energy and Environmental Protection,

		____________________________ HERMINA M. MORITA, Chair