Honorable Robert Bunda

President of the Senate

Twenty-Third State Legislature

Regular Session of 2006

State of Hawaii

Sir:

Your Committee on Transportation and Government Operations, to which was referred S.R. No. 163 entitled:

begs leave to report as follows:

The purpose of this measure is to encourage the Department of Transportation, with cooperation from the Department of Land and Natural Resources, to assist in the state and national policies to reduce reliance upon fossil fuels and to promote the development of an ethanol industry in the State of Hawaii.

Your Committee received testimony in support of this measure from Oahu Ethanol Corporation.

Your Committee finds that a local ethanol industry can bolster the sugar industry, which is currently facing declining market prices. It could also stimulate the development of new crops, thereby providing new jobs and strengthening Hawaii's economy. This new industry will help to decrease Hawaii's heavy dependence on imported petroleum. The nature, size, and quantity of ethanol feed stocks, products, and by-products require maritime transport and utilization of state harbors for the berthing of ships for such products, and their loading, off-loading, storage, and distribution.

As affirmed by the record of votes of the members of your Committee on Transportation and Government Operations that is attached to this report, your Committee concurs with the intent and purpose of S.R. No. 163 and recommends its adoption.