STAND. COM. REP. NO. 2365

Honolulu, Hawaii

RE: S.B. No. 3077

S.D. 1

Honorable Ronald D. Kouchi

President of the Senate

Twenty-Ninth State Legislature

Regular Session of 2018

State of Hawaii

Sir:

Your Committees on Transportation and Energy and Labor, to which was referred S.B. No. 3077 entitled:

"A BILL FOR AN ACT RELATING TO BIOFUELS,"

beg leave to report as follows:

The purpose and intent of this measure is to:

(1) Expand the renewable fuel tax credit by increasing the total amount of tax credits that can be claimed and making the tax credit permanent; and

(2) Create a renewable fuel facilitator position within the Department of Business, Economic Development, and Tourism.

Your Committees received testimony in support of this measure from the Hawaii Bioeconomy Trade Organization, Hawaii Gas, and three individuals. Your Committees received comments on this measure from the Department of Taxation; Department of Business, Economic Development, and Tourism; and Tax Foundation of Hawaii.

Your Committees find that biofuels can significantly advance the State's clean energy goals. This measure will increase investment in biofuels, especially because there is no federal tax incentive for biofuels. The establishment of a renewable fuels facilitator position will also help develop and advance biofuel projects.

Your Committees believe that the definition of feedstock should be clarified to acknowledge organic material in general and that the date that the Department of Business, Economic Development, and Tourism must report to the Legislature is too soon after the renewable fuel facilitator's assessment of renewable fuel projects.

Thus, your Committees have amended this measure by:

(1) Including organic material in the definition of "renewable feedstocks" and "renewable fuels";

(2) Delaying the date that the Department of Business, Economic Development, and Tourism must report to the Legislature by one year;

(3) Inserting an effective date of July 1, 2050, to encourage further discussion; and

(4) 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 Transportation and Energy and Labor that are attached to this report, your Committees are in accord with the intent and purpose of S.B. No. 3077, as amended herein, and recommend that it pass Second Reading in the form attached hereto as S.B. No. 3077, S.D. 1, and be referred to your Committee on Ways and Means.

Respectfully submitted on behalf of the members of the Committees on Transportation and Energy and Labor,

________________________________ JILL N. TOKUDA, Chair

________________________________ LORRAINE R. INOUYE, Chair