STAND. COM. REP. NO. 3278

Honolulu, Hawaii

RE:    H.B. No. 2618

       H.D. 2

       S.D. 2

Honorable Donna Mercado Kim

President of the Senate

Twenty-Seventh State Legislature

Regular Session of 2014

State of Hawaii

Madam:

     Your Committee on Ways and Means, to which was referred H.B. No. 2618, H.D. 2, S.D. 1, entitled:

"A BILL FOR AN ACT RELATING TO ENERGY STORAGE,"

begs leave to report as follows:

     The purpose and intent of this measure is to facilitate the use of renewable energy.

     More specifically, this measure establishes an income tax credit, available as either an investment or utilization credit, for each grid-connected energy storage property that is installed and placed in service in the State during a taxable year beginning after December 31, 2014.  The tax credit may be used as a nonrefundable credit for the full value of the credit, or as a refundable credit with a value of seventy per cent of the credit's total value.  The tax credit shall not be available for taxable years beginning after December 31, 2025.

     Your Committee received written comments in support of this measure from the Blue Planet Foundation, Bright Energy Storage Technologies, Hawaii Renewable Energy Alliance, Hawaiian Electric Company, Renewable Energy Action Coalition of Hawaii, Sempra US Gas and Power, Ulupono Initiative, and one individual.  The Department of Business, Economic Development, and Tourism, Department of Taxation, Public Utilities Commission, Beacon Power, LLC, and the Tax Foundation of Hawaii submitted written comments on the measure.

     Your Committee finds that the existing renewable energy technologies income tax credit has been successful in fostering a sustainable local renewable energy industry that is responsible for creating jobs, catalyzing statewide energy savings, improving our environment, and reducing greenhouse gas emissions.  Your Committee believes that a similar tax credit to encourage the use of grid-connected energy storage technologies and systems will help to maximize the use of indigenous renewable energy.

     Your Committee has amended this measure by:

     (1)  Changing the amounts of the tax credit to unspecified amounts;

     (2)  Appropriating funds to the Department of Taxation for administration of the tax credit; and

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

     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 H.B. No. 2618, H.D. 2, S.D. 1, as amended herein, and recommends that it pass Third Reading in the form attached hereto as H.B. No. 2618, H.D. 2, S.D. 2.

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

____________________________

DAVID Y. IGE, Chair