STAND. COM. REP. NO.442

Honolulu, Hawaii

, 2003

RE: S.B. No. 354

S.D. 1

 

 

Honorable Robert Bunda

President of the Senate

Twenty-Second State Legislature

Regular Session of 2003

State of Hawaii

Sir:

Your Committee on Energy and Environment, to which was referred S.B. No. 354 entitled:

"A BILL FOR AN ACT RELATING TO ENERGY,"

begs leave to report as follows:

The purpose of this measure is to extend the energy conservation tax credits for another five years from July 1, 2003, to July 1, 2008.

Testimony in support of this measure was submitted by Subcontractors Association of Hawaii, Plumbing & Mechanical Contractors Association of Hawaii, Building Industry Association – Hawaii, American Society of Heating, Refrigerating and Air-Conditioning Engineers, Inc., and PowerLight Solar Electric Systems. Testimony in support of the intent of this measure was submitted by the Department of Business, Economic Development, and Tourism, Hawaiian Electric Company, Inc. and its subsidiaries, R&R Services, Inc., Hawaii Solar Energy Association, and Inter-Island Solar Supply. The Department of Taxation, The Gas Company, and Tax Foundation of Hawaii submitted comments on this measure.

Your Committee finds that it is important that the State support the use of energy technologies that use renewable resources, particularly because of its high dependence on imported fossil fuel. The energy conservation tax credits provide proven incentives for businesses to utilize energy conservation devices and systems.

Your Committee has amended this measure in the following manner:

(1) Deleting the proposed repeal of the tax credit for taxable years ending before January 1, 1990;

(2) Deleting the proposed repeal of the tax credit for heat pump and ice storage systems;

(3) Deleting the proposed extension of the tax credit for wind and solar energy systems;

(4) Retaining the proposed extension of the tax credit for heat pump and ice storage systems from January 1, 2003, to July 1, 2008;

(5) Replacing the tax credit amounts and percentages for heat pump and ice storage systems with unspecified amounts and percentages; and

(6) Amending the effective date of the measure to state that the new tax credit rates apply to taxable years beginning after December 31, 2004.

Your Committee's amendment that deletes the specific tax credit amounts and percentages was made to facilitate discussion on what should be an appropriate tax credit ceiling by the Committee on Ways and Means.

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. 354, as amended herein, and recommends that it pass

Second Reading in the form attached hereto as S.B. No. 354, S.D. 1, and be referred to the Committee on Ways and Means.

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

____________________________

J. KALANI ENGLISH, Chair