Honolulu, Hawaii

, 2002

RE: S.B. No. 2615

S.D. 1



Honorable Robert Bunda

President of the Senate

Twenty-First State Legislature

Regular Session of 2002

State of Hawaii


Your Committees on Water, Land, Energy and Environment and Commerce, Consumer Protection and Housing, to which was referred S.B. No. 2615 entitled:


beg leave to report as follows:

The purpose of this measure is to implement the recommendations of the Energy Policy Task Force, including restricting energy tax credits to renewable energy technologies and requiring the Department of Business, Economic Development, and Tourism to support efficiency and renewable energy education programs.

Testimony in support of this measure was received from the Department of Business, Economic Development, and Tourism (DBED&T), the Energy-Efficiency Policy Task Force, Hawaiian Electric Company, Inc., The Gas Company, Hawaii Renewable Energy Alliance, Hawaii Solar Energy Association, Inter-Island Solar Supply, Covanta Energy Group, The Hydrogen Renewable Energy Enterprise, LLC, Pacific Wind Energy, LLC, Vertical Wind Turbine Technologies, LLC, Building Industry Association Hawaii, and Sierra Club Hawai`i Chapter. The Department of Taxation testified in opposition. PowerLight Hawaii submitted comments.

Your Committees find that in 1998, Act 163 called for DBED&T to establish a task force to explore alternatives for supporting increased energy efficiency and sustainability. DBED&T established the Energy-Efficiency Policy Task Force (Task Force) composed of eleven representatives from public and private organizations. The Task Force held at least thirty-five meetings; sponsored a symposium with sixteen local, national, and international presenters; invited a number of speakers to discuss concerns; directed economic analyses of various technologies; directed peer review of the economic analyses; consulted various state statutes for policy guidance; and discussed seven approaches to alternatives to support increased energy efficiency and sustainability.

Your Committees have heard that continuing the policy of tax credits for selected renewable technologies, with dollar caps, was one of the major recommendations of the Task Force.

Your Committees commend the Task Force for its works, and particularly for its recognition of the many fiscal concerns facing the State, energy producers, and consumers. Your Committees have amended this measure to:

(1) Begin the tax credit for systems installed after June 30, 2003;

(2) Add a provision to ensure that a taxpayer cannot claim more than one credit;

(3) Clarify that the claim must be filed by the end of the twelfth month following the taxable year in which the credit is claimed; and

(4) Clarify that the credit applies to taxable years beginning after December 31, 2002.

Your Committees have not addressed the percentages or dollar amount caps for the tax credits. These will vary depending on the type of renewable energy technology, and between residential, multi-family, and commercial. Your Committees believe the ranges and the amount of the caps warrant further discussion.

As affirmed by the records of votes of the members of your Committees on Water, Land, Energy and Environment and Commerce, Consumer Protection and Housing that are attached to this report, your Committees are in accord with the intent and purpose of S.B. No. 2615, as amended herein, and recommend that it pass Second Reading in the form attached hereto as S.B. No. 2615, S.D. 1, and be referred to the Committee on Ways and Means.

Respectfully submitted on behalf of the members of the Committees on Water, Land, Energy and Environment and Commerce, Consumer Protection and Housing,