STAND. COM. REP. NO. 3544
RE: H.B. No. 1689
Honorable Ronald D. Kouchi
President of the Senate
Twenty-Eighth State Legislature
Regular Session of 2016
State of Hawaii
Your Committee on Ways and Means, to which was referred H.B. No. 1689, H.D. 2, S.D. 1, entitled:
"A BILL FOR AN ACT RELATING TO TAXATION,"
begs leave to report as follows:
The purpose and intent of this measure is to foster greater energy security for Hawaii.
Specifically, this measure:
(1) Amends the existing ethanol facility income tax credit to include facilities that produce other renewable fuels;
(2) Clarifies that one gallon of renewable fuels shall be equal to 76,330 British thermal units; and
(3) Clarifies that a renewable fuels production facility must be in production on or before January 1, 2020, to qualify for the tax credit.
Your Committee received written comments in support of this measure from Hawaii Gas and the Ulupono Initiative.
Your Committee received written comments on this measure from the Department of Business, Economic Development, and Tourism; Department of Taxation; Blue Planet Foundation; and Tax Foundation of Hawaii.
Your Committee finds that Hawaii is vulnerable to soaring fuel prices or disruptions of its energy imports, which can hinder, cripple, or even devastate the State's economy and the well-being of its inhabitants. Your Committee further finds that it is critical for Hawaii to ensure greater energy security by becoming more self-sufficient in its energy supply.
Your Committee acknowledges the Department of Taxation's estimate that this measure will result in an annual revenue loss of $12,000,000.
Your Committee notes that concerns were raised that certain provisions contained in prior drafts of this measure could have been interpreted to violate the Commerce Clause of the United States Constitution. Your Committee further notes that those provisions have been deleted and are not present in the current draft of the measure. Your Committee believes that the measure, as received, comports with the Commerce Clause of the United States Constitution.
Your Committee has amended this measure by changing the renewable fuels facility tax credit from a refundable tax credit to a nonrefundable tax credit.
As affirmed by the record of votes of the members of your Committee on Ways and Means that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 1689, H.D. 2, S.D. 1, as amended herein, and recommends that it pass Third Reading in the form attached hereto as H.B. No. 1689, H.D. 2, S.D. 2.
Respectfully submitted on behalf of the members of the Committee on Ways and Means,
JILL N. TOKUDA, Chair