STAND. COM. REP. NO. 627

Honolulu, Hawaii

RE:    S.B. No. 1295

       S.D. 1

Honorable Donna Mercado Kim

President of the Senate

Twenty-Eighth State Legislature

Regular Session of 2015

State of Hawaii

Madam:

     Your Committees on Commerce and Consumer Protection and Ways and Means, to which was referred S.B. No. 1295 entitled:

"A BILL FOR AN ACT RELATING TO THE NATURAL ENERGY LABORATORY OF HAWAII AUTHORITY,"

beg leave to report as follows:

     The purpose and intent of this measure is to:

     (1)  Allow the Department of Business, Economic Development, and Tourism to enter into inter-agency agreements with the Natural Energy Laboratory of Hawaii Authority (NELHA) without entering into a memorandum of agreement or memorandum of understanding; and

     (2)  Incentivize the research, development, and commercialization of renewable energy technology in Hawaii by allowing these business activities to qualify a business for incentives under the state enterprise zone program.

     Your Committees received testimony in support of this measure from the Department of Business, Economic Development, and Tourism and Natural Energy Laboratory of Hawaii Authority.  Your Committees received comments on this measure from the Department of Taxation.

     Your Committees find that this measure makes businesses operating within research and technology parks established by NELHA eligible for the State's enterprise zone program.  This measure also broadens the scope of businesses eligible for enterprise zone benefits within NELHA's research and technology park, which will enable NELHA to expand its economic development project and increase the amount of annual state tax revenue generated by the research and technology park.

     Your Committees have amended this measure by:

     (1)  Amending the definitions of "renewable energy" and "renewable energy technology" to clarify that the special enterprise zone incentives are limited to business activities relating to energy produced by ocean thermal energy conversion, solar, or hydrogen and to business activities relating to technologies including hydrogen research and development;

     (2)  Clarifying that a tax credit for renewable energy technology may not be claimed under chapter 235, Hawaii Revised Statutes, if a tax credit is also claimed pursuant to the new section in chapter 227D, Hawaii Revised Statutes, as proposed by this measure; and

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

     As affirmed by the records of votes of the members of your Committees on Commerce and Consumer Protection and Ways and Means that are attached to this report, your Committees are in accord with the intent and purpose of S.B. No. 1295, as amended herein, and recommend that it pass Third Reading in the form attached hereto as S.B. No. 1295, S.D. 1.

Respectfully submitted on behalf of the members of the Committees on Commerce and Consumer Protection and Ways and Means,

________________________________ JILL N. TOKUDA, Chair

________________________________ ROSALYN H. BAKER, Chair