STAND. COM. REP. NO. 605

Honolulu, Hawaii

RE:    S.B. No. 1476

       S.D. 2

Honorable Shan S. Tsutsui

President of the Senate

Twenty-Sixth State Legislature

Regular Session of 2011

State of Hawaii

Sir:

     Your Committee on Ways and Means, to which was referred S.B. No. 1476, S.D. 1, 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 decrease Hawaii's reliance on imported fossil fuel by issuing special purpose revenue bonds to assist BioEnergy Hawaii, LLC, in establishing a cogeneration facility and related energy production facilities for electrical output or biofuels energy, or both.

     Your Committee received comments in support of this measure from Guy Kaniho, General Manager, BioEnergy Hawaii, LLC; and Dante Carpenter, Pacific Waste, Inc.

     Your Committee received comments on this measure from Kalbert K. Young, Director, Department of Budget and Finance.

Your Committee finds that the benefits of a cogeneration facility include reduced dependence on imported fossil fuels, reduced greenhouse gas emissions, and the creation of local technical and semi-technical jobs.  Your Committee notes the comments submitted by the Director of Finance indicating that, under the Internal Revenue Code, there may be a $10,000,000 limitation on the amount of tax-exempt financing for industrial projects and recommending that BioEnergy Hawaii, LLC, consult with a bond counsel firm to determine if the project qualifies for the full amount of tax-exempt financing being requested.

     Your Committee has amended this measure by making a technical, nonsubstantive amendment for the purpose of clarity.

     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. 1476, S.D. 1, as amended herein, and recommends that it pass Third Reading in the form attached hereto as S.B. No. 1476, S.D. 2.

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

____________________________

DAVID Y. IGE, Chair