STAND

STAND. COM. REP. 1498

Honolulu, Hawaii

, 2003

RE: S.B. No. 855

S.D. 1

H.D. 3

Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-Second State Legislature

Regular Session of 2003

State of Hawaii

Sir:

Your Committee on Finance, to which was referred S.B. No. 855, S.D. 1, H.D. 2, entitled:

"A BILL FOR AN ACT RELATING TO ENERGY,"

begs leave to report as follows:

The purpose of this bill is to encourage the use of renewable energy systems and reduce the State's reliance on fossil fuels by:

(1) Providing a renewable energy technology income tax credit for systems installed after June 30, 2003;

(2) Requiring a Department of Taxation (DOTAX) report on the cost of tax credits to the State, including information on the systems installed; and

(3) Requiring the Director of the Department of Business, Economic Development, and Tourism (DBEDT), who serves as the Energy Resources Coordinator, to conduct a review exploring the most cost-effective means of supporting increased energy efficiency and sustainability, including a review of renewable energy tax credits and report to the 2011 Legislature and every seven years thereafter.

The Chamber of Commerce of Hawaii, Sierra Club, Hawaii Chapter, Hawaii Renewable Energy Alliance, Hawaii Solar Energy Association, R&R Services, Inter-Island Solar Supply, PowerLight Corporation, Island Energy Solutions, The Gas Company, Hawaiian Electric Company, Hawaii Electric Light Company, Maui Electric Company, ProVision Technologies, Inc., Off-Peak / Elite Energy Group, LLC, KAI Hawaii Inc., and a concerned individual testified in support of this bill. DOTAX, DBEDT, and the Tax Foundation of Hawaii commented on the bill.

Your Committee has amended this bill by:

(1) Allowing taxpayers to claim the renewable energy technologies income tax credit only after general fund tax collections after two successive fiscal years exceed 7.5 percent of the collections for the prior two fiscal years, and the Governor issues a declaration allowing the credit to be claimed; and

(2) Making a technical, nonsubstantive amendment for purposes of clarity and style.

As affirmed by the record of votes of the members of your Committee on Finance that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 855, S.D. 1, H.D. 2, as amended herein, and recommends that it pass Third Reading in the form attached hereto as S.B. No. 855, S.D. 1, H.D. 3.

Respectfully submitted on behalf of the members of the Committee on Finance,

		____________________________ DWIGHT Y. TAKAMINE, Chair