STAND. COM. REP. NO. 2381

Honolulu, Hawaii

RE:    S.B. No. 2792

       S.D. 1

Honorable Shan S. Tsutsui

President of the Senate

Twenty-Sixth State Legislature

Regular Session of 2012

State of Hawaii

Sir:

     Your Committees on Hawaiian Affairs and Water, Land, and Housing and Energy and Environment, to which was referred S.B. No. 2792 entitled:

"A BILL FOR AN ACT RELATING TO RENEWABLE ENERGY REVENUE,"

beg leave to report as follows:

     The purpose and intent of this measure is to support programs funded through the Native Hawaiian rehabilitation fund by allocating to the fund a portion of geothermal royalties and revenue from public land dispositions to renewable energy producers.

     Your Committees received testimony in support of this measure from the Department of Hawaiian Homelands, Sovereign Councils of the Hawaiian Homelands Assembly, and six individuals.  Your Committees received comments on this measure from the Department of Land and Natural Resources, Office of Hawaiian Affairs, and County of Hawaii Planning Department.

     Your Committees find that funding to advance the purposes of the Hawaiian Homes Commission Act, 1920, as amended, has declined sharply.  Programs affected by this decline in funding include higher education scholarships, financial literacy training and counseling, agricultural and pastoral technical assistance, and grants for Hawaiian homestead communities.  The benefits of the transfer of payments proposed in this measure outweigh the negative impacts, if any, on existing programs or agencies.

     Your Committees have amended this measure by:

     (1)  Limiting the deposit of only those geothermal royalties collected by the State pursuant to sections 182-7 and 182-18, Hawaii Revised Statutes, from mining leases executed after July 1, 2012, into the Native Hawaiian rehabilitation fund;

     (2)  Substituting the reference to a "renewable energy producer" in section 171-95, Hawaii Revised Statutes, with "nongeothermal renewable energy producer", which exempts revenue from a public land disposition to a geothermal renewable energy producer from payment to the Department of Hawaiian Home Lands;

     (3)  Leaving unspecified the percentage share of revenue from a disposition to a nongeothermal renewable energy producer to be paid to the Department of Hawaiian Home Lands, rather than requiring the Department of Hawaiian Home Lands' share to be thirty percent;

     (4)  Leaving unspecified the percentage share of geothermal resources royalties to be paid to a county in which geothermal resource mining occurs, rather than requiring the county's percentage share to be not less than twenty percent;

     (5)  Changing the Department of Hawaiian Home Lands' share of royalties from geothermal resources from twenty percent to an unspecified percentage of all royalties, and conditioning receipt of those royalties on the receipt of an unspecified percentage of all state royalties by the county in which the mining operations are situated;

     (6)  Leaving unspecified the rate of payment to the State for the use of geothermal resources, rather than requiring the rate to be no less than twelve percent of the gross amount or value of the geothermal resources produced under the lease;

     (7)  Clarifying that the measure does not diminish the Office of Hawaiian Affairs' pro rata portion of the public trust lands; and

     (8)  Making technical, nonsubstantive amendments for the purposes of clarity and consistency.

     As affirmed by the records of votes of the members of your Committees on Hawaiian Affairs and Water, Land, and Housing and Energy and Environment that are attached to this report, your Committees are in accord with the intent and purpose of S.B. No. 2792, as amended herein, and recommend that it pass Second Reading in the form attached hereto as S.B. No. 2792, S.D. 1, and be referred to the Committee on Ways and Means.

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

____________________________ DONOVAN M. DELA CRUZ, Chair	____________________________ BRICKWOOD GALUTERIA, Chair
	____________________________ MIKE GABBARD, Chair