STAND. COM. REP. NO.  532

Honolulu, Hawaii

                , 2015

RE:   H.B. No. 618

      H.D. 1

Honorable Joseph M. Souki

Speaker, House of Representatives

Twenty-Eighth State Legislature

Regular Session of 2015

State of Hawaii

Sir:

     Your Committee on Energy & Environmental Protection, to which was referred H.B. No. 618 entitled:

"A BILL FOR AN ACT RELATING TO TAXATION,"

begs leave to report as follows:

The purpose of this measure is to promote greater energy security and self-sufficiency for Hawaii by establishing a renewable fuels production tax credit for a variety of renewable fuels made from a variety of renewable feedstocks and repealing the ethanol facility tax credit.

The Blue Planet Foundation, Pacific Biodiesel Technologies, Hawaii Renewable Energy Alliance, Hawaii Energy Policy Forum, and Renewable Energy Action Coalition of Hawaii supported the measure.  The Department of Business, Economic Development, and Tourism; Department of Taxation; and Tax Foundation of Hawaii submitted comments.

     Your Committee has amended this measure by:

     (1)  Making the aggregate tax-credit cap an unspecified sum;

     (2)  Providing that the credit shall apply to taxable years beginning after December 31, 2016, but shall not apply to taxable years beginning December 31, 2022;

     (3)  Redefining "renewable fuels" to mean fuels produced using less than one barrel of oil per ton of renewable fuel; and

     (4)  Making conforming amendments and technical, nonsubstantive amendments.

     Should your Committee on Finance deliberate this measure further, your Committee respectfully requests that it consider:

     (1)  Setting the aggregate cap for the renewable fuels production tax credit at $12,000,000; and

     (2)  Whether to make the renewable fuels production tax credit a refundable or non-refundable tax credit.

     In addition, your Committee requests that the Department of Business, Economic Development, and Tourism provide an analysis of the resources that it would need to administer the renewable fuels production tax credit.

     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. 618, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 618, H.D. 1, and be referred to the Committee on Finance.

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

____________________________

CHRIS LEE, Chair