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. 909 entitled:

begs leave to report as follows:

The purpose of this measure is to provide for a tax credit for the cost of installing a required grease interceptor system as required by state or county law.

Testimony in support of this measure was submitted by Gyotaku Japanese Restaurant, Wailana Coffee House, Hawaii Hotel Association, National Restaurant Association, Ryan's Grill, and LWD, Inc. dba McDonald's. Comments on this measure were submitted by the Department of Taxation and the Tax Foundation of Hawaii.

Your Committee finds that the need to reduce the amount of grease discharged into sewer systems is clear. However, the cost of grease interceptor installation can be overwhelming to businesses. New grease interceptor systems can cost $20,000 to over $100,000. A tax credit for such installations is an incentive for restaurants and food production facilities to step up their compliance schedule and reduce the amount of grease being discharged into the local sewer systems. This measure will help to improve the environment without putting restaurants out of business.

Your Committee has left the tax credit percentage and the maximum dollar credit amount blank for further discussion by the Ways and Means Committee.

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