STAND

STAND. COM. REP. NO.424

Honolulu, Hawaii

, 2003

RE: S.B. No. 1239

S.D. 1

Honorable Robert Bunda

President of the Senate

Twenty-Second State Legislature

Regular Session of 2003

State of Hawaii

Sir:

Your Committee on Energy and Environment, to which was referred S.B. No. 1239 entitled:

"A BILL FOR AN ACT RELATING TO ENERGY,"

begs leave to report as follows:

The purpose of this measure is to encourage the use of biodiesel fuel in Hawaii as an important source of renewable energy.

Testimony in support of this measure was submitted by Pacific Biodiesel, Inc. and the Maui Tomorrow Board of Directors. The Department of Health and Department of Budget and Finance submitted testimony opposing this measure.

Specifically, this measure requires biodiesel fuels to be used in state fleets, establishes a biodiesel fuel revolving fund, allows for the delivery of biodiesel to state harbors, reduces harbor fees for alternative fuel vessels, exempts biodiesel from the state fuel tax, and bans grease from landfills.

Your Committee finds that biodiesel has gone from a nearly nonexistent market position to use in more than one hundred major fleets over the past decade. In Hawaii, biodiesel is the most readily available biofuel and has great potential for helping our State meet sustainable energy goals.

Your Committee has amended this measure by:

(1) Removing "brightly" from "a brightly visible sticker" that notifies the public that the vehicle uses biodiesel fuel;

(2) Deleting the provision of reduction in dockage, wharfage, demurrage, and other rates and fees pertaining to harbors, wharves, and properties for vessels that use biodiesel or other alternative fuels;

(3) Requiring a minimum of twenty per cent biodiesel blend for the biodiesel fuel tax exemption;

(4) Removing the appropriation for the Maui fuel crop project; and

(5) Postponing the effective date of the prohibition of grease traps from landfills to six months after the issuance of the last certificate of occupancy of all the biodiesel processing plants of all counties.

As affirmed by the record of votes of the members of your Committee on Energy and Environment that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 1239, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 1239, S.D. 1, and be referred to the Committee on Ways and Means.

Respectfully submitted on behalf of the members of the Committee on Energy and Environment,

		____________________________ J. KALANI ENGLISH, Chair