STAND. COM. REP. NO. 30

Honolulu, Hawaii

RE:    S.B. No. 994

Honorable Colleen Hanabusa

President of the Senate

Twenty-Fourth State Legislature

Regular Session of 2007

State of Hawaii

Madam:

     Your Committee on Energy and Environment, to which was referred S.B. No. 994 entitled:

"A BILL FOR AN ACT RELATING TO SEAWATER AIR CONDITIONING DISTRICT COOLING SYSTEMS,"

begs leave to report as follows:

     The purpose of this measure is to lessen the State's dependency on fossil fuels.

     The measure accomplishes this purpose by including seawater district cooling systems in the definition of "qualified business" for the purpose of state enterprise zone benefits.

     Your Committee received testimony in support of this measure from the Department of Business, Economic Development and Tourism, Honolulu Seawater Air Conditioning, LLC., Enterprise Honolulu, University of Hawaii at Manoa- Environmental Center, and the World Business Academy.  The Department of Taxation submitted comments regarding this measure.

     Your Committee finds that the use of alternative energy production will promote the State's goal of lessening its dependence on fossil fuels.  Your Committee further finds that encouraging the use of seawater air conditioning cooling systems will reduce fossil fuel dependency and ozone-depleting greenhouse gases by replacing the traditional high power consuming technologies with a more efficient alternative.

     Your Committee believes that providing enterprise zone benefits will effectively reduce the costs of seawater district cooling systems, which in turn will encourage its use by developers and customers, and consequently fulfill the intent of the measure to lessen the State's dependence on fossil fuels.

     Your Committee received a fiscal impact statement from the Department of Taxation that provided that this measure will result in a revenue loss to the State of approximately $450,000.  However, this statement did not specify how the fiscal impact was calculated or whether the stated amount was calculated as a one-time fuel impact or on an annual basis.

     As affirmed by the record of votes of the members of your Committee on Energy and Environment that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 994 and recommends that it pass Second Reading and be referred to the Committee on Economic Development and Taxation.

Respectfully submitted on behalf of the members of the Committee on Energy and Environment,

____________________________

RON MENOR, Chair