STAND. COM. REP. NO. 1471

Honolulu, Hawaii

RE:    H.B. No. 1289

       H.D. 2

       S.D. 3

Honorable Colleen Hanabusa

President of the Senate

Twenty-Fourth State Legislature

Regular Session of 2007

State of Hawaii

Madam:

     Your Committee on Ways and Means, to which was referred H.B. No. 1289, H.D. 2, S.D. 2, entitled:

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

begs leave to report as follows:

     The purpose of this measure is to:

     (1)  Establish 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)  Expand tax credits applicable to shareholder pro rata shares in S corporations.

     The Department of Taxation and the Hawaii Energy Policy Forum submitted written testimony in support of this measure.  The Tax Foundation of Hawaii submitted written comments on the measure.

     Your Committee finds that this measure would clarify an ambiguity in existing tax law by making it clear that the tax credits for energy technology systems must be for systems installed and placed in service in the State.

     Your Committee has amended this measure by:

     (1)  Deleting the proposed technical, nonsubstantive amendment to section 235-129(a), Hawaii Revised Statutes (HRS), as unnecessary; and

     (2)  Deleting the proposed amendments in section 235-129(b), HRS, and instead, replacing two references to section 235-12, HRS, relating to an energy conservation income tax credit, with references to section 235-12.5, HRS, relating to a renewable energy technologies income tax credit, in that subsection.

     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. 1289, H.D. 2, S.D. 2, as amended herein, and recommends that it pass Third Reading in the form attached hereto as H.B. No. 1289, H.D. 2, S.D. 3.

Respectfully submitted on behalf of the members of the Committee on Ways and Means,

____________________________

ROSALYN H. BAKER, Chair