Honorable Robert Bunda

President of the Senate

Twenty-Second State Legislature

Regular Session of 2003

State of Hawaii

Sir:

Your Committee on Ways and Means, to which was referred S.B. No. 354, S.D. 1, entitled:

begs leave to report as follows:

The purpose of this measure is to extend certain energy conservation income tax credits for another five years.

In particular, this measure eliminates the percentage and dollar caps and extends the tax credits on heat pumps and ice storage systems from July 1, 2003, to July 1, 2008. This measure does not extend the tax credits for solar and wind energy systems, which will end on July 1, 2003.

Your Committee finds that the energy conservation tax credits that are extended by this measure are necessary to increase the State's energy self-sufficiency by providing incentives for businesses to utilize energy conservation devices and systems. Your Committee further finds that supporting the use of energy technologies that use renewable resources will help to reduce the State's dependence on imported oil, encourage investment in clean energy, and improve Hawaii's environment.

Your Committee has amended this measure by:

1. Amending the effective date section to specify that the measure applies to taxable years beginning after December 31, 2002, rather than December 31, 2004, to ensure that there is no gap in the application or claiming of the tax credits; and
2. Making technical, nonsubstantive changes.

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 S.B. No. 354, S.D. 1, as amended herein, and recommends that it pass Third Reading in the form attached hereto as S.B. No. 354, S.D. 2.