STAND. COM. REP. NO. 180-22

Honolulu, Hawaii

, 2022

RE: H.B. No. 2278

H.D. 1

Honorable Scott K. Saiki

Speaker, House of Representatives

Thirty-First State Legislature

Regular Session of 2022

State of Hawaii

Sir:

Your Committee on Energy & Environmental Protection, to which was referred H.B. No. 2278 entitled:

"A BILL FOR AN ACT RELATING TO ENERGY,"

begs leave to report as follows:

The purpose of this measure is to:

(1) Amend the Environmental Response, Energy, and Food Security Tax, also known as the Barrel Tax, to tax carbon emissions; and

(2) Establish a refundable income tax credit to mitigate the effect of the carbon emissions tax on taxpayers.

Your Committee received testimony in support of this measure from the Kauai Women's Caucus; Environmental Justice Task Force of Faith Action for Community Equity; The Nature Conservancy; Kauai Climate Action Coalition; Ulupono Initiative; Citizens' Climate Lobby, Kauai Chapter; Citizens' Climate Lobby, Hawaii Island Chapter; Citizens' Climate Lobby Hawaii; Imua Alliance; Hawaii Interfaith Power and Light; Climate Protectors Hawai‘i; Environmental Caucus of the Democratic Party of Hawai‘i; and numerous individuals. Your Committee received testimony in opposition to this measure from the Practical Policy Institute of Hawaii, Honolulu County Republican Party, The Heartland Institute, Life of the Land, and one individual. Your Committee received comments on this measure from the Department of Budget and Finance, Department of Taxation, Department of the Attorney General, Hawaii State Energy Office, Par Hawaii, Grassroot Institute of Hawaii, Tax Foundation of Hawaii, and one individual.

Your Committee finds that other countries have successfully assessed a tax on producers and importers of fossil fuels to reduce the consumption of fossil fuels. The tax has shown to reduce the emissions of greenhouse gases, leading to a more sustainable environment and reducing local air pollution. Establishing a carbon emissions tax in Hawaii could similarly substantially lower the consumption of fossil fuels in the State, while also creating a net financial benefit to many of Hawaii's households, especially low-income households.

Your Committee has amended this measure by:

(1) Clarifying the definitions of "qualified taxpayer" and "qualifying child";

(2) Changing the effective date to July 1, 2100, to encourage further discussion; and

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

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. 2278, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 2278, H.D. 1, and be referred to your Committee on Consumer Protection & Commerce.

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

____________________________

NICOLE E. LOWEN, Chair