STAND. COM. REP. NO.  536

 

Honolulu, Hawaii

                , 2015

 

RE:   H.B. No. 927

      H.D. 1

 

 

 

 

Honorable Joseph M. Souki

Speaker, House of Representatives

Twenty-Eighth State Legislature

Regular Session of 2015

State of Hawaii

 

Sir:

 

     Your Committee on Consumer Protection & Commerce, to which was referred H.B. No. 927 entitled:

 

"A BILL FOR AN ACT RELATING TO ON-BILL PROGRAMS,"

 

begs leave to report as follows:

 

     The purpose of this measure is to promote the installation of renewable energy, energy efficiency, and energy conservation systems by exempting certain payments made to electric utilities for those systems from various state and county taxes.

 

     Specifically, this measure establishes that:

 

     (1)  Amounts collected by electric utilities for the repayment of on-bill obligations are not considered revenue of the electric utility and, therefore, are not subject to the general excise tax, the public service company tax, the public utility fee, and the public utility franchise tax; and

 

     (2)  Acceptance of repayments of on-bill obligations does not subject an electric utility to the laws that regulate financial institutions, escrow depositories, and collection agencies.

 

     Your Committee received testimony in support of this measure from the Department of Business, Economic Development, and Tourism; Public Utilities Commission; Hawaii Solar Energy Association; Hawaiian Electric Companies; and Blue Planet Foundation.  The Department of Taxation and the Tax Foundation of Hawaii submitted comments on this measure.

 

     Your Committee finds that electric utilities serving as billing and collection agents for any on-bill financing program in the State act in a purely pass through capacity for those repayments.  Accordingly, on-bill collections do not constitute revenue for participating electric utilities.  Therefore, exempting repayments of on-bill obligations from revenue-based state and county taxes and certain other regulatory fees and taxes is consistent with both the on-bill financing program's purpose of making renewable energy systems more affordable and the similar tax exemptions provided to the green infrastructure charge under section 269-172, Hawaii Revised Statutes.

 

     Your Committee has amended this measure by changing the effective date to July 1, 2112, to facilitate further discussion on the measure.

 

Should the Committee on Finance decide to hear this measure, your Committee respectfully requests that it consider whether the tax-exempt status with respect to repayments of on-bill obligations would have a negative impact on electric utility ratepayers.

 

     As affirmed by the record of votes of the members of your Committee on Consumer Protection & Commerce that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 927, as amended herein, and recommends that it be referred to the Committee on Finance in the form attached hereto as H.B. No. 927, H.D. 1.

 

 

Respectfully submitted on behalf of the members of the Committee on Consumer Protection & Commerce,

 

 

 

 

____________________________

ANGUS L.K. McKELVEY, Chair