STAND. COM. REP. NO. 2382

Honolulu, Hawaii

RE:    S.B. No. 2703

       S.D. 1

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 S.B. No. 2703 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 enable the production of air conditioning in an area or district from a seawater air conditioning cooling system to qualify as an "eligible business activity" and benefit from the State's enterprise zones program.

     Your Committees received testimony in support of this measure from the Honolulu Seawater Air Conditioning, LLC; and one individual.  Your Committees received comments on this measure from the Department of Taxation and Department of Business, Economic Development, and Tourism.

     Your Committees find that seawater air conditioning district cooling systems help to reduce the State's dependence on fossil fuels and help the State's economy.  The twenty-five-thousand-ton seawater air conditioning district cooling system under development for downtown Honolulu can potentially reduce Oahu's dependence on imported oil.  The development of this system will generate millions of dollars in construction-project spending and create a significant amount of long-term, gainful employment.

     Your Committees have amended this measure by inserting language in the purpose section to reference all seawater air conditioning district cooling systems instead of only the downtown Honolulu seawater air conditioning project.

     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 S.B. No. 2703, as amended herein, and recommend that it pass Second Reading in the form attached hereto as S.B. No. 2703, S.D. 1, 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