Honorable Robert Bunda

President of the Senate

Twenty-Third State Legislature

Regular Session of 2006

State of Hawaii

Sir:

Your Committee on Ways and Means, to which was referred H.B. No. 2619, S.D. 1, entitled:

begs leave to report as follows:

The purpose of this measure is to lessen Hawaii's dependence on petroleum and fossil fuels by extending the exemption of the sale of alcohol fuel from the general excise tax until December 31, 2009.

Your Committee is aware that the ability to use and produce renewable fuels is an integral component in achieving energy self-sufficiency for the State. Extending the exemption will provide some tax relief to Hawaii motorists, while also supporting efforts to diversify the State's energy sources.

Your Committee is also aware that starting April 2006, at least eighty-five per cent of all gasoline sold in Hawaii is required to contain ten per cent ethanol, as long as the price of ethanol is cost competitive. This exemption will increase the competitiveness of ethanol prices, which is important to Hawaii's ethanol industry as it begins to scale up.

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 H.B. No. 2619, S.D. 1, and recommends that it pass Third Reading.