STAND. COM. REP. NO. 364

Honolulu, Hawaii

RE:    S.B. No. 1222

       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 S.B. No. 1222, S.D. 1, entitled:

"A BILL FOR AN ACT RELATING TO INCOME TAXATION,"

begs leave to report as follows:

     The purpose of this measure is to 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.

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

     Your Committee finds that this measure would clarify provisions that may have been open to misinterpretation.  Your Committee believes this tax credit has had a positive impact on increasing solar energy use in Hawaii, and it is the intent of your Committee to support the clarification of this measure.

     Your Committee has amended this measure by deleting the word "resident" from section 235-12.5(a), Hawaii Revised Statues (HRS), and reinserting the word "resident" in section 235-129(a), to correct a drafting error.

     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 S.B. No. 1222, 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 S.B. No. 1222, S.D. 2.

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

____________________________

CAROL FUKUNAGA, Chair