STAND. COM. REP. NO. 2097

Honolulu, Hawaii

RE: S.B. No. 2511

S.D. 1

Honorable Ronald D. Kouchi

President of the Senate

Thirty-First State Legislature

Regular Session of 2022

State of Hawaii

Sir:

Your Committee on Energy, Economic Development, and Tourism, to which was referred S.B. No. 2511 entitled:

"A BILL FOR AN ACT RELATING TO TAXATION,"

begs leave to report as follows:

The purpose and intent of this measure is to expand the renewable energy technologies income tax credit to include firm renewable energy systems.

Your Committee received testimony in support of this measure from Hawaiian Electric Company, Inc.; Hawaii Clean Power Alliance; and one individual. Your Committee received testimony in opposition of this measure from Life of the Land, Climate Protectors Hawai‘i, 350Hawaii.org, and one individual. Your Committee received comments on this measure from the Department of Taxation, Department of Budget and Finance, Hawaii State Energy Office, Tax Foundation of Hawaii, and one individual.

Your Committee finds that increased energy efficiency and use of renewable energy resources would increase Hawaii's energy self-sufficiency, energy security, and resistance to increases in oil prices, while achieving broad societal benefits, including environmental sustainability, economic development, and job creation. Your Committee recognizes that the Legislature has provided incentives for intermittent sources of renewable energy, such as solar and wind. According to testimony received by your Committee, firm generation is imperative to operate the electric system and ensure grid reliability and resilience.

Accordingly, your Committee has amended this measure by:

(1) Specifying:

(A) That $750,000 is the cap amount of the tax credit for each firm renewable energy system;

(B) That firm renewable energy systems run on alternating current, instead of direct current;

(C) That a firm renewable energy system is a type of renewable energy technology system; and

(D) The definition of a firm renewable energy system;

(2) Preventing a taxpayer from claiming additional tax credits on the costs used to claim the tax credit established in this measure;

(3) Amending the applicability of the measure to taxable years after December 31, 2022; and

(4) 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 Energy, Economic Development, and Tourism that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 2511, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 2511, S.D. 1, and be referred to your Committee on Ways and Means.

Respectfully submitted on behalf of the members of the Committee on Energy, Economic Development, and Tourism,

________________________________

GLENN WAKAI, Chair