STAND. COM. REP. NO. 70

Honolulu, Hawaii

RE:    S.B. No. 598

       S.D. 1

Honorable Colleen Hanabusa

President of the Senate

Twenty-Fourth State Legislature

Regular Session of 2007

State of Hawaii

Madam:

     Your Committees on Energy and Environment and Water, Land, Agriculture, and Hawaiian Affairs, to which was referred S.B. No. 598 entitled:

"A BILL FOR AN ACT RELATING TO GENERAL EXCISE TAX,"

beg leave to report as follows:

     The purpose of this measure is to encourage green building design and practices in an effort to shift toward greater energy sustainability.

     The measure attempts to accomplish this purpose by providing a general excise tax exemption for buildings or facilities built in conformance with the United States Green Building Council's Leadership on Energy and Environmental Design green building rating system.

     Your Committees received testimony in support of this measure from Honolulu Seawater Air Conditioning, LLC., and the Hawaii Association of Realtors.  The Department of Business, Economic Development, and Tourism and the American Chemistry Council submitted testimony supporting the intent of this measure.  Testimony offering comments on this measure was submitted by the Department of Taxation and the Hawaii Carpenter's Union.

     Your Committees find that buildings represent forty per cent of our total energy use.  Encouraging the construction of energy efficient buildings is essential to Hawaii's energy sustainability.

     Your Committees have amended this measure by requiring the Department of Taxation to work in conjunction with the Department of Accounting and General Services to determine the criteria for green building qualification.

     Your Committees further amended this measure by clarifying that the exemption applies to all buildings statewide.

     Your Committees also amended this measure to provide that a building may qualify as a "green building" if it is in conformance with comparable state-approved, nationally recognized, and consensus based guideline, standard, or system, except when the guideline, standard, or system interferes with the use of the building or facility as an emergency shelter.

     Furthermore, your Committees changed the effective date of the measure from upon approval to July 1, 2007.

     The Department of Taxation was unable to calculate the measure's fiscal impact because the exemption percentage was left blank.

     As affirmed by the records of votes of the members of your Committees on Energy and Environment and Water, Land, Agriculture, and Hawaiian Affairs that are attached to this report, your Committees are in accord with the intent and purpose of S.B. No. 598, as amended herein, and recommend that it pass Second Reading in the form attached hereto as S.B. No. 598, S.D. 1, and be referred to the Committee on Economic Development and Taxation.

Respectfully submitted on behalf of the members of the Committees on Energy and Environment and Water, Land, Agriculture, and Hawaiian Affairs,

____________________________ RUSSELL S. KOKUBUN, Chair

____________________________ RON MENOR, Chair