Honorable Robert Bunda

President of the Senate

Twenty-Second State Legislature

Regular Session of 2004

State of Hawaii

Sir:

Your Committee on Ways and Means, to which was referred H.B. No. 2961, H.D. 2, S.D. 1, entitled:

begs leave to report as follows:

The purpose of this measure is to clarify the current ethanol investment tax credit.

Your Committee finds that the present ethanol investment tax credit is based on the amount of an investment in a qualified ethanol facility. This measure bases the credit on the nameplate capacity of an ethanol facility to encourage the development of large capacity facilities to be built, rather than the development of expensive facilities that produce little ethanol. This measure further defines investment to ensure that the credit is for capital investment and not for operational expenses.

Your Committee has amended this measure by:

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 H.B. No. 2961, H.D. 2, S.D. 1, as amended herein, and recommends that it pass Third Reading in the form attached hereto as H.B. No. 2961, H.D. 2, S.D. 2.