STAND. COM. REP. NO. 931

Honolulu, Hawaii

RE:    H.B. No. 1286

       H.D. 2

       S.D. 1

Honorable Shan S. Tsutsui

President of the Senate

Twenty-Sixth State Legislature

Regular Session of 2011

State of Hawaii

Sir:

     Your Committee on Energy and Environment, to which was referred H.B. No. 1286, H.D. 2, entitled:

"A BILL FOR AN ACT RELATING TO THE ISSUANCE OF SPECIAL PURPOSE REVENUE BONDS TO ASSIST BIOENERGY HAWAII, LLC,"

begs leave to report as follows:

     The purpose and intent of this measure is to help increase the availability of energy in the form of electricity or biofuels by amending Act 110, Session Laws of Hawaii 2009, which authorized the issuance of special purpose revenue bonds to assist BioEnergy Hawaii, LLC, to establish and operate one or more cogeneration facilities in the State to:

     (1)  Broaden the scope of the project to include the production of biofuels, in addition to electricity; and

     (2)  Authorize the sale of electric energy or biofuels to refineries serving the public, public agencies, or public facilities.

     Your Committee received testimony in support of this measure from Guy Kaniho, BioEnergy Hawaii, LLC; and Dante Carpenter, Pacific Waste, Inc.  Your Committee received comments on this measure from Kalbert K. Young, Department of Budget and Finance.

Your Committee finds that it is in the public interest to encourage the development of cogeneration facilities that make energy available to members of the public by the sale of electricity or biofuels, or both, to an electric utility or refinery, or both, that serves the area in which the facility is located.  Your Committee recognizes that under the Internal Revenue Code there is a limitation on the amount of tax-exempt financing for industrial projects and that BioEnergy Hawaii, LLC, may have to consult with a bond counsel firm to determine whether the project may qualify for the full amount of tax-exempt financing.  Your Committee further finds that S.B. No. 1476, S.D. 2, contains all of the same provisions as this measure but more comprehensively updates the purposes of Act 110, Session Laws of Hawaii 2009.

     Accordingly, your Committee has amended this measure by:

     (1)  Deleting its contents and replacing them with provisions from S.B. No. 1476, S.D. 2, which authorizes the issuance of special purpose revenue bonds in an amount not to exceed $100,000,000 to assist BioEnergy Hawaii, LLC, to establish a cogeneration facility and related energy production facilities for electrical output or biofuels energy, or both;

     (2)  Adding a section to repeal Act 110, Session Laws of Hawaii 2009, as that Act will no longer be necessary; and

     (3)  Changing the effective date to upon approval.

     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 H.B. No. 1286, H.D. 2, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 1286, H.D. 2, S.D. 1, and be referred to the Committee on Ways and Means.

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

____________________________

MIKE GABBARD, Chair