Honorable Robert Bunda

President of the Senate

Twenty-Second State Legislature

Regular Session of 2004

State of Hawaii

Sir:

Your Committee on Energy and Environment, to which was referred S.B. No. 2080 entitled:

begs leave to report as follows:

The purpose of this measure is to provide a tax credit for a percentage of costs associated with the installation of a hydrogen system that has an unspecified nameplate capacity.

Hawaiian Electric Company Inc. and PowerLight Corporation both testified in support of the measure. The Department of Taxation testified in opposition to the measure.

Your Committee finds that this tax credit will significantly reduce Hawaii's reliance on fossil fuels by providing an economic incentive to encourage individuals to shift to a renewable, non-polluting energy source such as hydrogen systems.

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. 2080 and recommends that it pass Second Reading and be referred to the Committee on Ways and Means.