STAND. COM. REP. NO. 1340

Honolulu, Hawaii

RE:    H.B. No. 1289

       H.D. 2

       S.D. 2

Honorable Colleen Hanabusa

President of the Senate

Twenty-Fourth State Legislature

Regular Session of 2007

State of Hawaii

Madam:

     Your Committee on Economic Development and Taxation, to which was referred H.B. No. 1289, H.D. 2, S.D. 1, entitled:

"A BILL FOR AN ACT RELATING TO RENEWABLE ENERGY,"

begs leave to report as follows:

     The purpose of this measure is to:

     (1)  Clarify that all energy technology systems must be installed and placed in service in the State of Hawaii to obtain the State's income tax energy tax credit; and

     (2)  Amend tax credits applicable to shareholder pro rata shares in S corporations.

     Testimony in support of this measure was received from the Department of Taxation, Hawaii Energy Policy Forum, and Hawaii Renewable Energy Alliance.  The Tax Foundation of Hawaii submitted comments.

     Your Committee received a fiscal impact statement from the Department of Taxation that the revenue gain would be approximately $29,000.

     Your Committee has amended this measure by changing the effective date from upon approval to July 1, 2007, for systems installed after June 30, 2007.

     As affirmed by the record of votes of the members of your Committee on Economic Development and Taxation that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 1289, H.D. 2, S.D. 1, as amended herein, and recommends that it be referred to the Committee on Ways and Means, in the form attached hereto as H.B. No. 1289, H.D. 2, S.D. 2.

Respectfully submitted on behalf of the members of the Committee on Economic Development and Taxation,

____________________________

CAROL FUKUNAGA, Chair