Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-Third State Legislature

Regular Session of 2005

State of Hawaii

Sir:

Your Committee on Energy & Environmental Protection, to which was referred H.B. No. 1435 entitled:

begs leave to report as follows:

The purpose of this measure is to increase the renewable energy technologies tax credit for solar thermal energy systems and photovoltaic energy systems.

The measure also repeals the sunset date of January 1, 2008 for the renewable energy technologies tax credit.

Your Committee finds that the State spends approximately $1,700,000,000 annually on imported fossil fuels. This over-dependence on fossil fuels is not only expensive, but places the State at the mercy of world politics and the ever-growing instability of oil producing regions.

The use of solar thermal, wind powered, and photovoltaic energy systems advances the State's energy policy objective of decreasing our dependence on fossil fuels by reducing the electricity needed to heat water and power the homes and businesses where they are installed. Additionally, your Committee finds that since the solar thermal energy systems tax credit has not been adjusted for the past fifteen years, an increase in the tax credit is long overdue.

This bill provides a legislative vehicle that not only increases the renewable energy technologies systems tax credit, but also provides a strong policy statement in support of these systems by repealing the sunset date of the tax credit.

Your Committee has amended the bill by changing the tax credit amounts and related percentages on selected system items to unspecified amounts and percentages for purposes of facilitating further discussion on this matter. Your Committee has also changed the effective date, such that the Act applies to taxable years beginning after December 31, 2004.

As affirmed by the record of votes of the members of your Committee on Energy & Environmental Protection that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 1435, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 1435, H.D. 1, and be referred to the Committee on Consumer Protection & Commerce.