CONFERENCE COMMITTEE REPORT NO.116

                            Honolulu, Hawaii
                                            , 2000

                            RE:   S.B. No. 2221
                                  S.D. 1
                                  H.D. 2
                                  C.D. 1




Honorable Norman Mizuguchi
President of the Senate
Twentieth State Legislature
Regular Session of 2000
State of Hawaii

Honorable Calvin K.Y. Say
Speaker, House of Representatives
Twentieth State Legislature
Regular Session of 2000
State of Hawaii

Sir:

     Your Committee on Conference on the disagreeing vote of the
Senate to the amendments proposed by the House of Representatives
in S.B. No. 2221, S.D. 1, H.D. 2, entitled:  

     "A BILL FOR AN ACT RELATING TO ETHANOL," 

having met, and after full and free discussion, has agreed to
recommend and does recommend to the respective Houses the final
passage of this bill in an amended form.

     The purpose of this measure is to provide an investment
credit for investment in a qualifying ethanol production
facility.

     Your Committee has amended this measure to:

     (1)  Clarify that the facility shall be in production on or
          before January 1, 2012;

     (2)  Replace the two-tiered investment schedule -- for
          investments of up to $5,000,000, and over $5,000,000 --
          with a sixteen-step schedule based on gallons produced,

 
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          with a cap of thirty percent up to a specified dollar
          amount for each step;

     (3)  Amend the definition of "credit period" to a maximum
          period of eight years for facilities with a total
          investment of less than $50,000,000, and ten years for
          those with a total investment of $50,000,000 or more;

     (4)  Add a definition for "nameplate capacity" as the
          qualifying ethanol facility's production capacity in
          gallons of ethanol per year, based on an operating year
          of three hundred fifty days; 

     (5)  Cap the eligible ethanol investments in total nameplate
          capacities of ethanol production facilities in the
          State at forty million gallons per year;

     (6)  Require written notice prior to construction of any new
          ethanol production facility, and an additional written
          notice within thirty days of the initial qualifying
          production;

     (7)  Allow the capacity to be revised if a qualifying
          facility fails to achieve average annual production of
          at least seventy-five percent of its nameplate capacity
          for two consecutive years;

     (8)  Require each qualifying producer to provide specific
          information on productions and sales;

     (9)  Require the Director of Business, Economic Development,
          and Tourism, to submit an annual report to the Governor
          and the Legislature on ethanol production and sales;

    (10)  Amend section 237-27.1, Hawaii Revised Statutes, to
          delete the requirement for a written report, and to
          provide a sunset date of December 31, 2006;

    (11)  Make the credit applicable to tax years beginning after
          December 31, 2001; and

    (12)  Make technical amendments.

     As affirmed by the record of votes of the managers of your
Committee on Conference that is attached to this report, your
Committee on Conference is in accord with the intent and purpose
of S.B. No. 2221, S.D. 1, H.D. 2, as amended herein, and
recommends that it pass Final Reading in the form attached hereto
as S.B. No. 2221, S.D. 1, H.D. 2, C.D. 1.

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                                   Respectfully submitted on
                                   behalf of the managers:

  ON THE PART OF THE HOUSE           ON THE PART OF THE SENATE




_____________________________     _______________________________
Rep. HERMINA MORITA               Sen. LORRAINE R. INOUYE
Co-Chair                          Co-Chair



_____________________________     _______________________________
Rep. FELIPE P. ABINSAY, JR.       Sen. JONATHAN CHUN
Co-Chair                          Co-Chair



_____________________________
Rep. ROBERT N. HERKES
Co-Chair



______________________________
Rep. SYLVIA LUKE
Co-Chair

 
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