STAND. COM. REP. NO. 3039

Honolulu, Hawaii

RE:    H.B. No. 1950

       H.D. 2

Honorable Donna Mercado Kim

President of the Senate

Twenty-Seventh State Legislature

Regular Session of 2014

State of Hawaii

Madam:

     Your Committees on Economic Development, Government Operations and Housing and Energy and Environment, to which was referred H.B. No. 1950, H.D. 2, entitled:

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

beg leave to report as follows:

     The purpose and intent of this measure is to allow the production of air conditioning from a seawater air conditioning cooling system within an area or district designated as an enterprise zone to benefit as an "eligible business activity" under the State's enterprise zones program.

     Your Committees received testimony in support of this measure from the Chamber of Commerce Hawaii, Ulupono Initiative, and one individual.  Your Committees received testimony in opposition to this measure from the Department of Business, Economic Development, and Tourism.  Your Committees received comments on this measure from the Department of Taxation, Tax Foundation of Hawaii, and one individual.

     Your Committees find that seawater air conditioning district cooling systems help to reduce the State's dependence on fossil fuels and help its economy.  A seawater air conditioning district cooling system can potentially reduce Hawaii's dependence on imported oil, while generating millions of dollars in construction project spending and creating a significant amount of long-term, gainful employment.

     Your Committees have heard testimony expressing concerns about incorporating other clean energy technologies as eligible business activities under the State's enterprise zones program.  Your Committees find that this issue raises concerns that merit further discussion and requests that your Committee on Ways and Means further examine those issues and concerns so that Hawaii can reach its energy sustainability goals by 2050.

     As affirmed by the records of votes of the members of your Committees on Economic Development, Government Operations and Housing and Energy and Environment that are attached to this report, your Committees are in accord with the intent and purpose of H.B. No. 1950, H.D. 2, and recommend that it pass Second Reading and be referred to the Committee on Ways and Means.

Respectfully submitted on behalf of the members of the Committees on Economic Development, Government Operations and Housing and Energy and Environment,

____________________________ MIKE GABBARD, Chair

____________________________ DONOVAN M. DELA CRUZ, Chair