STAND. COM. REP. NO.1564

Honolulu, Hawaii

, 2001

RE: H.B. No. 1282

H.D. 2

S.D. 2

 

 

Honorable Robert Bunda

President of the Senate

Twenty-First State Legislature

Regular Session of 2001

State of Hawaii

Sir:

Your Committees on Commerce, Consumer Protection and Housing and Ways and Means, to which was referred H.B. No. 1282, H.D. 2, S.D. 1, entitled:

"A BILL FOR AN ACT RELATING TO ENERGY CONSERVATION TAX CREDITS,"

beg leave to report as follows:

The purposes of this measure are to extend the deadline for energy conservation income tax credits to July 1, 2010, and to allow the credits for combined heat and power systems (CHPs).

Your Committees received testimony in support of the intent of this measure with amendments from the Department of Business, Economic Development, and Tourism (DBEDT), Life of the Land, Hawaii Solar Energy Association, Vertical Wind Turbine Technologies, LLC, The Hydrogen Renewal Energy Enterprise, LLC, Schibert Energy Company, Sierra Club Hawaii Chapter, Hawaii Renewable Energy Alliance, Hawaiian Electric Company, Plumbing & Mechanical Contractors Association of Hawaii, The Gas Company, Building Industry Association-Hawaii, and sixteen private citizens. Testimony in opposition was received from the Department of Budget and Finance and Department of Taxation. The Tax Foundation of Hawaii submitted comments.

Your Committees find that Act 163, Session Laws of Hawaii 1998, extended these tax credits to 2003 and called for DBEDT to establish a task force to examine ways to support increased energy efficiency. As part of this project, DBEDT cosponsored an Energy Efficiency Policy Symposium in November 2000. Symposium participants were supportive of Hawaii's tax credit program, and as a result the task force recommended extending the tax credit to 2010.

Your Committees find the tax credits to be a successful means of encouraging alternate energy use in Hawaii. However, your Committees are concerned that state revenues might suffer by adding a tax credit for CHPs. More tax credits would be particularly detrimental to the State's general fund during the current budget crunch. Your Committees also are concerned that CHPs may not be true renewable energy systems. Accordingly, your Committees request the DBEDT task force to consider this issue during the interim session.

Your Committees have amended this measure by deleting the tax credit for CHPs, and inserting an effective date of December 31, 2050, in the interests of continuing the discussion on this matter.

As affirmed by the records of votes of the members of your Committees on Commerce, Consumer Protection and Housing and Ways and Means that are attached to this report, your Committees are in accord with the intent and purpose of H.B. No. 1282, H.D. 2, S.D. 1, as amended herein, and recommend that it pass Third Reading in the form attached hereto as H.B. No. 1282, H.D. 2, S.D. 2.

Respectfully submitted on behalf of the members of the Committees on Commerce, Consumer Protection and Housing and Ways and Means,

____________________________

BRIAN T. TANIGUCHI, Chair

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RON MENOR, Chair