STAND. COM. REP. NO. 850

Honolulu, Hawaii

RE:    S.B. No. 464

       S.D. 2

Honorable Colleen Hanabusa

President of the Senate

Twenty-Fifth State Legislature

Regular Session of 2009

State of Hawaii

Madam:

     Your Committee on Ways and Means, to which was referred S.B. No. 464, S.D. 1, entitled:

"A BILL FOR AN ACT RELATING TO TAXATION,"

begs leave to report as follows:

     The purpose of this measure is to change the renewable energy technologies income tax credit to a refundable tax credit for certain taxpayers.

The measure removes the restriction on the type of income the tax credit can be used to offset and allows special allocations of the tax credit in certain cases.  The measure also excludes a depreciation deduction from passive activity losses.

     Your Committee received three written comments on this measure.  The written comments may be reviewed on the Legislature's website.

     Your Committee finds that the renewable energy technologies income tax credit provides little financial incentive for investors.  Your Committee believes that this measure would make capital investment in renewable energy technologies more attractive to a wider range of investors who would be able to make use of the tax credit.

     Your Committee has amended this measure by:

     (1)  Removing the provisions that would have made the renewable energy technologies income tax credit refundable;

     (2)  Adding a provision that prohibits a taxpayer who claims the renewable energy technologies income tax credit from claiming any other income tax credit using the same actual costs or from qualifying as a qualified high technology business;

     (3)  Changing the effective date to January 1, 2090, to facilitate further discussion on the measure; and

     (4)  Making technical, nonsubstantive amendments for the purposes of clarity and style.

     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 S.B. No. 464, S.D. 1, as amended herein, and recommends that it pass Third Reading in the form attached hereto as S.B. No. 464, S.D. 2.

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

____________________________

DONNA MERCADO KIM, Chair