STAND. COM. REP. NO. 481

Honolulu, Hawaii

RE:    S.B. No. 665

       S.D. 1

Honorable Ronald D. Kouchi

President of the Senate

Twenty-Ninth State Legislature

Regular Session of 2017

State of Hawaii

Sir:

     Your Committee on Transportation and Energy, to which was referred S.B. No. 665 entitled:

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

begs leave to report as follows:

     The purpose and intent of this measure is to:

     (1)  Replace the current renewable energy technology systems tax credit with tax credits for solar energy property, wind energy property, and energy storage property; and

     (2)  Establish a new calculation method and cap amount for the tax credit for a solar energy property and an energy storage property.

     Your Committee received testimony in support of this measure from the Hawaii Solar Energy Association, Amber Kinetics, Distributed Energy Resources Council of Hawaii, Ulupono Initiative, and three individuals.  Your Committee received comments on this measure from the Department of Business, Economic Development, and Tourism; Department of Taxation; Tax Foundation of Hawaii; and one individual.

Your Committee finds that supporting the growth and development of alternative energy and alternative energy storage is essential to the future health of the State.  Part of that support requires the encouragement of widespread adoption of wind, solar, and energy storage properties.  Tax credits are an effective method of fostering the development of these essential components of the State's changing energy landscape.  Your Committee, however, understands the concerns raised in testimony that a tax credit, such as one targeting renewable energy systems, should be fiscally responsible.  It is therefore important to ensure that those to whom the credit is available do not abuse or circumvent the tax credit offering and to also establish an end date for the incentive program to minimize the potential for abuse.

     Your Committee has amended this measure by:

     (1)  Establishing a cap for the credit available to owners of combined energy storage and solar energy systems;

     (2)  Inserting language that no tax credit shall be allowed after the taxable year ending December 31, 2035; and

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

     As affirmed by the record of votes of the members of your Committee on Transportation and Energy that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 665, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 665, S.D. 1, and be referred to your Committee on Ways and Means.

Respectfully submitted on behalf of the members of the Committee on Transportation and Energy,

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LORRAINE R. INOUYE, Chair