STAND. COM. REP. NO. R86

 

Honolulu, Hawaii

                  

 

RE:    S.B. No. 985

       S.D. 1

 

 

 

Honorable Colleen Hanabusa

President of the Senate

Twenty-Fourth State Legislature

Regular Session of 2007

State of Hawaii

 

Madam:

 

     Your Committee on Energy and Environment, to which was referred S.B. No. 985 entitled:

 

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

 

begs leave to report as follows:

 

     The purpose of this measure is to reduce petroleum dependency and encourage the use of hybrid vehicles.

 

     The measure attempts to accomplish this purpose by offering tax credits to individuals who purchase hybrid motor vehicles.

 

     Your Committee received testimony in support of this measure from two individuals.  Testimony supporting the intent of this measure was submitted by the Sierra Club, Hawaii Chapter and the Alliance of Automobile Manufacturers.  The Department of Taxation, the Tax Foundation of Hawaii, and one individual submitted comments on this measure.

 

     The Department of Taxation was unable to determine the fiscal impact of the measure due to the fact that the amount of the tax credit is unspecified.

 

     Your Committee finds that minimizing the use of fossil fuels is essential to Hawaii's energy independence.  An effective mechanism to encourage the purchase of vehicles that are powered by alternative fuels is needed.  Your Committee further finds that general excise tax exemptions are the most effective and expedient means of achieving this goal.

     Accordingly, your Committee amended this measure by removing the tax credit language and inserting language that offers a general excise tax exemption to purchasers of "alternative fuel vehicles."  Your Committee defined "alternative fuel vehicle" as a motor vehicle that obtains forty miles or more per gallon and as defined in section 30B of the Internal Revenue Code (with respect to all alternative motor vehicle tax credit), and includes advanced lean burn technology motor vehicles, alternative fuel motor vehicles, fuel cell motor vehicles, and hybrid motor vehicles.

 

     As affirmed by the record of votes of the members of your Committee on Energy and Environment that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 985, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 985, S.D. 1, and be referred to the Committee on Economic Development and Taxation.

 

Respectfully submitted on behalf of the members of the Committee on Energy and Environment,

 

 

 

____________________________

RON MENOR, Chair