STAND. COM. REP. NO.  208-14

Honolulu, Hawaii

                , 2014

RE:   H.B. No. 2060

      H.D. 1

Honorable Joseph M. Souki

Speaker, House of Representatives

Twenty-Seventh State Legislature

Regular Session of 2014

State of Hawaii

Sir:

     Your Committee on Energy & Environmental Protection, to which was referred H.B. No. 2060 entitled:

"A BILL FOR AN ACT RELATING TO TAXATION,"

begs leave to report as follows:

The purpose of this measure is to establish a renewable fuels production tax credit to achieve greater energy security for the State and to repeal the ethanol facility tax credit.

Pacific Biodiesel Technologies, Hawaii Renewable Energy Alliance, Blue Planet Foundation, Hawaii BioEnergy, LLC, and several individuals testified in support of this measure.  The Department of Taxation and Tax Foundation of Hawaii commented on this measure.

     Your Committee has amended this measure by:

     (1)  Removing the aggregate tax credit cap per taxpayer in a credit period;

     (2)  Amending the definition of "credit period" to mean a maximum of five consecutive years from the first taxable year in which a taxpayer begins qualifying renewable fuels production;

     (3)  Making 2025 the last taxable year in which the credit may be claimed;

     (4)  Changing the annual taxpayer credit cap to an unspecified amount; and

     (5)  Making technical, nonsubstantive amendments for clarity, consistency, and style.

     Your Committee respectfully requests that your Committee on Economic Development & Business consider inserting a per taxpayer cap of $3,000,000 per year and a credit of 30 cents per one hundred fifteen thousand British thermal units of renewable fuels using the lower heating value produced and sold for distribution in Hawaii.

     As affirmed by the record of votes of the members of your Committee on Energy & Environmental Protection that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 2060, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 2060, H.D. 1, and be referred to the Committee on Economic Development & Business.

Respectfully submitted on behalf of the members of the Committee on Energy & Environmental Protection,

____________________________

CHRIS LEE, Chair