House Standing Committee on Energy & Environmental Protection

Installed and placed in service on a single-family residential property with certain exemptions, removing certain cap amounts for solar energy systems, and increasing the adjusted gross income requirements for an individual taxpayer to elect to have any excess credits refunded. First to testify, we have Hawaii State Energy Office, Mark Glick, with comments in person.

Good morning, Chair Lowen, Vice Chair Perruso. I'm Gail Suzuki-Jones from the Hawaii State Energy Office. We stand on our written comments and are here to answer any questions. Mahalo.

Thank you. Next, we have Hawaii Department of Taxation with comments in person.

Clinton Piper, Department of Taxation. We'll stand on our written comments.

Thank you. We have testimony in support from Climate Protectors Hawaii, Ted Bolen. Joining us, we should have Tax Foundation of Hawaii, Tom Yamachika, with comments on Zoom. Not present. We also have comments from Sunrun Inc, Inception Financial, PhotonWorks Engineering, Green Power Projects LLC, Centinel Public Partnerships, Inter-Island Solar Supply, Hawaii Solar Energy Association, PV Tech, Alternate Energy, about four individuals with comments, and two in support. Is there anyone else who wishes to testify on this measure? Seeing none. Chair, do you have any questions?

I do. For, I guess, HSEA and maybe DOTAX. I'm just curious; I think there was some testimony indicating the $250,000 income threshold might be a little too low. Do you have a sense of what threshold would be appropriate? Like how many people claiming this tax credit fall below and fall above?

I don't have a good read on the demographic situation, but I do think 250 joint comes into-- you know, brings some sort of aspiring folks that might be able to afford solar. It kind of-- I would think it's sort of right on the cusp, so if that were raised, I think it would be-- you know, we'd be more comfortable with it because there is, like, a donut hole there, I think. There is a segment that we would be missing.

Do you have a number you would recommend? Like if we did 250 single, what amount joint?

Then I would go 500 joint. I mean-- and again, that's just sort of guessing. That's a guesstimate. I don't have a good number, a good read on where that line would be right now.

How many people with a joint income of over 500,000 are claiming the tax credit?

I would-- you know, I think-- I'm not sure. I don't have the number. I'd have to ask DOTAX.

Okay. DOTAX. Do you have any of those numbers?

Clinton Piper, Department of Taxation. No, I do not have those numbers at this time. I did confirm before I came over that we do have an analyst that is working on a budget estimate, which we do anticipate having ready by the time that this bill-- assuming this bill makes it to the Money Committee, but I don't have those numbers at this time.

Okay. If you could let us know, I guess I'm curious how many people, you know, over 250, single, over 250 joint, claim the tax credit, and then if you had this-- you know, also looked at a joint income amount of, you know, 350, 400. Kind of, what are those cutoffs?

Because the idea of the bill is to reduce the pull on it from, you know, more wealthy people, but then be able to increase the amounts for those who can qualify for it by lifting the cap.

I can make the inquiries on that.

And then, do you have any sense of how many people claim it as a fully refundable tax credit? So if we raise the lower threshold from--I forget what was in the bill--40 to 60, maybe? Is that right? Yeah--then how many more people would be able to claim it as a fully refundable tax credit?

Again, that's outside of my wheelhouse. I'm more-- my information is more on the administration of this, but as far as the finances behind it, I'll have to defer to the analyst doing the financials.

Okay. Can they look at that as well, like the impact of the-- raising the threshold for making it fully refundable?

Understood.

And then, I guess HSEO. Last question. I think this bill actually needs--HSEA, sorry. Sorry. The bill actually needs a fix. I think it was drafted not quite as intended because the intention was the income threshold and the lifting of the cap should apply to the same subset of people.

Right now, it applies to the subset of-- both apply to the subset of people who are buying their systems outright for people who do a lease and have a third party owning the system. That lifts the cap without the income threshold, without it being clear how the income threshold applies.

So my thought would be to, like, separate those two out in the way the bill is written so that you have people owning their systems, the cap is lifted, the threshold applies, and people who are leasing their systems, which will stay status quo. Is there any equity issue there in terms of-- what do you think the impacts of that would be?

So, ideally, I think you would want to lift the cap for both, because I do think that we need kind of a boost in the market because of what's happening at the federal level. So--

Then we wouldn't be able to-- it would be very challenging to apply the income threshold on the third party-owned systems. Because how do you verify it?

It would be more of a challenge, yeah, to verify that. I mean, it's possible. It could happen. We think any boost is good and we'll take it, kind of given what's going on in the market. So even if you limit that cap removal to a certain segment, that's still a positive thing, right?

We'd still be for that, but we think that the broadest set possible would be our preference for that. But yeah, I mean to-- I mean, again, I'd have to ask DOTAX how you could, you know, administratively separate out one segment in that element of it. But you could state the intent in the bill somewhere.

Okay. DOTAX, do you have any idea how you could do that?

I apologize. I was working through the notes in the last question. I missed the question that you were asking.

If the income threshold were to apply to systems that are leased, meaning that there would be a third party, like a solar company claiming the tax credit, but you wanted the income threshold to apply to the household whose roof the system is on, how would it be possible for DOTAX to admin that?

I would have to check with our systems admin. I don't believe there's a way that our system can currently do that. I'm hesitant to say absolutely not, but I don't believe we can. I'd have to check and get back to you as to whether that's feasible.

Or if you had, like, a tax credit for someone who is leasing a system, something like that, I guess. You could do it separately and then you would take away the ability for any third party financing to claim the tax credit at all--

Tax credit for a leased system is something that's--

--might be actually more consumer-- protective of the consumer.

Tax credit for a leased system is something our system could handle, but the cross-reference between different taxpayers isn't something that I think our system is-- once again, I can't confirm that, but it's my understanding our system can't handle that.

Okay. All right, thank you. HSEA, what do you think about shifting the tax credit from being able to be claimed by the financing entity to the individual homeowner with the system?

I think our position is that the owner of the system-- it's just the cleanest way to do this is the owner of the system should be able to claim the tax credit.

I mean, not the owner of the system, but the party that is leasing it.

I am not sure how you would do that, but I understand. I mean, what happens now is there's an indirect-- there's a passthrough of that, and how you would legislate that, I am not sure. I don't have an answer for you on that.

Wouldn't it actually make it more clear then that the individual on whose roof the system is going in is actually benefiting from the full amount of the tax credit?

It's-- sorry, say-- what's the question there?

I mean, I'm not exactly sure how that would-- how it would work, right, but if you had a tax credit for a person entering a lease for a, you know, rooftop solar system be able to claim the tax credit, it would ensure that the full amount of that tax credit got passed on to the customer?

Yeah. Again, that would-- I think that's a bigger change and, like, where I would-- I think that's a difficult one to do and I think we really-- to keep things simple, I mean, I think you really need to keep that tax credit focused on the owner, which would be the lessor in this case, right? It's a hard one.

But then why? Why?

Because they actually use that to lower the cost, overall cost. So you see--

Wouldn't it equally lower the overall cost, if not more, if the person paying the lease payments claim the tax credit directly?

It's hard to come-- get to those numbers. It all comes in through the PPA rate, but to have, like, competition and trying to lower cost-- and one of the main benefits that lessors provide is they're able to reach a lower-income market, right? And so they're able to create a product that actually can reach this lower-income market.

And so, they try to make the best deal available for, you know, for a lot of things. There's a lot of, you know, conditions that they're thinking about. And I think they're trying to make the most competitive offering to the end-user ultimately. And it's really difficult to, like, figure out how all of that gets passed through, but, you know, it comes through in lower rates for customers at the end of the day.

But I mean, if you did allow somehow--and it would be complicated--but if you did allow the person paying the lease payments to directly claim the tax credit, there would be more clarity that they were benefiting from the full amount, as I understand it?

Agreed. Yes, there would be. Yeah.

How are the lease payments-- the lease payments are monthly, or annually, or does it depend?

It depends. I think, generally, it's like a monthly bill. They get like a monthly electricity bill and they get a blended, you know, PPA rate or a blended electricity rate that they pay. And that's where you're seeing-- that's getting lower with the tax credit.

The tax credit is passing through that. Now, to attribute all of the passthroughs is a difficult task, and that's like proprietary and it's a point of competitive advantage. And competition among different installers and different lessors is to provide that better lower rate for customers.

Okay. DOTAX, another question. Sorry. I'm just thinking this through in real time. Would there be issues if you had a less-- a person leasing the system on their rooftop claiming the tax credit where-- I mean, especially if you had it being fully refundable up front where they're basically claiming a tax credit against something they haven't paid for yet? Or, I mean, you could-- we could set up the bill of the law that way if we wanted to, but, I mean, would it be considered good tax policy?

If you're-- so if--

Would you want to do it where it's claimed against their lease payments for that year or something more specific?

Just trying work through this. Just one moment. I'm hesitant to give a full answer because I've not worked through this. A few issues to consider might be you mentioned refundable versus non-refundable. That will always be an issue. Of course the department will prefer a non-refundable credit. However, you know, it is the prerogative of the Legislature.

If you are looking at lower incomes, tax credits, as far as offsetting tax liability, might be less tax liability for those taxpayers. As far as funds not incurred, that would be problematic if we are basically cutting checks for a refund on amounts that have not been incurred.

That would create problems as far as being able to oversee it and ensure that there's not fraud and waste in the system. So the Tax Department always takes the position that funds actually need to be expended before a credit of any--whether refundable or non-refundable--can be incurred. So those are some considerations. As far as how that plays out, I don't have a neat package to hand over.

Okay. All right, thank you. Any questions? All right. Just a last question. Sorry. Didn't mean to spend this long on this, but, I mean, if we leave it status quo for the third party finance system, so there's no income threshold, there's no lifting up the cap, so you're still at 5,000, but you're putting a threshold on who can claim for the systems they're going to buy out, right, like what will be-- I guess I have two concerns and maybe you don't have an answer now but you can think about it.

One, is there an equity issue to giving, like, more of a benefit to people who are able to buy their systems outright? And two, do we create any unintended consequences, like kind of perverse incentives for people to lease who would otherwise buy?

Right. Potentially, you could create a system where someone would be more incentivized to lease the system, right, over the long haul. At the end of the day, you know, we do think lease systems are lower-cost systems. They lower the entry point for putting rooftop solar on a home. So we do think there's broad-- there's equity considerations--

I mean, it's higher cost over the full life cycle of it, but, yeah.

Yeah. But like, it's a higher over the full life cycle, but it's immediate entry and they're getting bill savings immediately when they lease the system. So there are benefits that accrue immediately to low to moderate-income folks for the leasing model.

You know-- and actually if you look at-- I mean, I remember last year a tax credit bill was being heard and about half of the outlay for the tax credit was going to commercial. And that commercial outlay was leased systems and that was-- so that was showing that, like, we're starting to get more access into the market to those lower, moderate-income spots, right?

And so there is an equity issue and it might be that if we limit or constrain or put something on the lease systems, we might not reach as many low to moderate-income folks with renewable energy. Is that getting at your question?

Yeah, and also, I guess, I'm not sure, like, for the companies you represent because they're businesses with business expenses, like, what is their actual annual income come out to and would they-- I mean, I would imagine hopefully it would be more, but I mean, would there be a need to clarify that for financers, third party-- third party might not be the right word. We have to clarify that.

But for the companies, like when people are on leases for the company that's doing the financing and actually owns the system, they should probably not be eligible for a fully refundable tax credit.

Well, it depends. I mean, I think it depends--

They would have to claim it against their liability and they can roll it over like others do.

I mean if they have tax liability, probably they'd want to max-- they'd get the most benefit by maxing out the tax credit by claiming it against liability, right? So-- but some may go refundable. Just, I think it depends on the model.

Would they ever have, like, actually stated income that low? Because then they wouldn't even have-- like, would they have stated income?

The structuring is-- it can be really complicated, the structuring of companies, and they create, you know, separate LLCs and things to finance certain elements of this. So I don't know the proprietary methodologies that they use internally at some of these large leasing companies, to be honest.

Okay. So maybe we'll just make those not refundable, just claim against tax liability. Okay. Thank you. All right.

Thank you. Okay, so moving on to the next measure, House Bill 2316 relating to veg materials in water infrastructure. This would amend the prohibitions on the use of lead materials in drinking water distribution to align with the state drinking water act and related code of federal regulations.

First to testify, we have the state health planning and development agency, Jack Lewin, in support, in person, not present. Next, we have Department of Health in support, in person.

Hi. Good morning. Dennis Lopez, Department of Health. We stand behind our written testimony in support. I'll be available for questions.

Thank you. We have the plumbers and fitters, UA Local 675 with Kiko Bukowski in support, in person, not present. And we have two individuals in support. Chair, do you have any questions?

I do not.

Okay, then we are going to move on to the next measure of House Bill 1566 relating to energy efficiency. Requires that each state agency to expeditiously use energy efficient lighting. Requires the Hawaii State Energy Office to provide technical assistance and survey state agencies for compliance. Prioritizing first responder facilities.

Requires the Department of Accounting and General Services to assist the Hawaii State Energy Office in conducting the survey. Requires a report of the survey to the Legislature. First to testify will be DLNR in support, in person, not present. Oh, my apologies.

Okay. Sorry. First testify would be Hawaii State Energy Office Mark Glick with comments in person.

Good morning Chair Lowen, Vice Chair Perruso. Gail Suzuki Jones with the Hawaii State Energy Office. Participant with comments here to answer any questions. Questions.

Thank you. We also have testimony from the Climate Change Mitigation and Adaptation Commission in support. DAGS with comments, Climate Protectors Hawaii in support and three individuals in support. Chair, do you have any questions?

I do not.

Okay, then we will move on to the next measure. House Bill 1926 relating to Red Hill. Appropriate funds for studies on remediation of substances released from the Red Hill Fuel Storage Facility. Environmental monitoring and testing, research on groundwater modeling and sampling and independent testing and verification of water data to be published on a public dashboard.

Requires the Department of Land and Natural Resources to seek reimbursement from the United States Department of Defense. First to testify we have DLNR in support, in person.

Aloha Chair, Vice Chair. Keala Richardson, DLNR. I'm the policy coordinator for the Red Hill Water Alliance Initiative or WAI. DLNR submitted written testimony in support. And I just wanted to highlight two points.

The first being that although the tanks at Red Hill have been defuelled, there are still decades of research, remediation and monitoring that remain necessary to protect the groundwater resources, restore INA and rebuild public trust. And the second part is that this measure advances those WAI initiatives in collaboration with various UH teams.

It includes teams from the School of Ocean and Earth Science and Technology and its research institutes and centers. The Departments of Civil, Environmental, Construction, Engineering, Geography and Natural Resources and Environmental Management, the UH Water Resources Research Center and also UH Community Colleges Leeward and Honolulu.

So, mahalo for the opportunity to be here and comment in support of this measure. And I'm available to answer any questions.

Thank you. Next we have Board of Water Supply, Ernest Lau, BWS Manager and Chief Engineer in support, in person.

Yes, thank you. We're in strong support of this measure. And thank you to the Legislature for supporting the Red Hill WAI effort in Department of Land and Natural Resources. It's really important to continue to allow opportunity for the community, the public, to be informed and kept up to date with what's happening. It's a long term recovery.

I just want to point out, if you're not aware of it too, that the. There's another effort by the EPA under the Community Representation Initiative. The Navy is no longer required to actually attend those meetings, which I think is.

It's very sad and disturbing, but this Red Hill WAI effort is important to our community for the long term.

Thank you. So much. We have support from. And we have testimony in support from Sierra Club of Hawaii, the Environmental Caucus of the Democratic Party, the Chamber of Sustainable Commerce, Kalahui, Hawaii, and 51 individuals. One individual in opposition. Chair, do you have any questions? Is there anyone else wishing to testify in this measure? Seeing none.

Okay, then we are going to speed right along to the next measure. House Bill 1673, relating to landfill units. Appeals the prohibition on the construction, modification, or expansion of a landfill unit or any component of a landfill unit inland of an underground injection control line in a county with population greater than 500,000. First to testify, we have the Department of Health with comments on Zoom. In person.

Good morning, Chair Lowen, Vice Chair Perruso. Glenn Haae on behalf of the Department of Health. Department stands on its written testimony providing comments, and we're available to answer any questions. Mahalo.

Thank you. Next, we have the Board of Water Supply, Ernest Lau, BWS Manager and Chief Engineer, in support in person.

Yes. You know, I just want to apologize to you folks, to the Water and Land Committee and also to this Committee Chair Lowen and Chair Perruso. Our testimony is inaccurate. Our testimony is actually incorrect. We don't support this measure.

In actuality, we strongly oppose it because it takes away the good protections that this Legislature last session passed to protect our precious Hawaii from putting municipal landfills above, right above our aquifer that's the source of our water. So as your consideration, we'll be submitting revised testimony.

But I ask consideration that you go back to the original HB 1673 and not take the HD 1. Because HD 1, in my mind, undoes the good work by this Legislature to protect our source of drinking water.

Next to testify, we have the City and County of Honolulu Department of Environmental Services, Roger Babcock, in support in person.

Morning, Chair Lowen, Vice Chair Perruso. Roger Babcock, Director of Department of Environmental Services for City and County of Honolulu. We submitted written testimony and we stand by that. We're in support of the HD 1 version of the bill, which leaves the decisions about siting the landfill up to the, up to the counties. I'll be available for any questions. Thank you.

Thank you. Sierra Club of Hawaii, Wayne Tanaka, in opposition on Zoom.

Good morning, Chair, Vice Chair, Members of the Committee. Wayne Tanaka with Sierra Club of Hawaii. We're in opposition to this measure. We, you know, we don't feel like it's necessary to repeal a protection that the Legislature wisely enacted just last year. You know, unfortunately, we are, you know, Uncle Ernie is not going to be here forever.

And, you know, administrations change, and so do the Chief Engineer is the Board of Water Supply. So given the amount of pressure that will be placed on future administrations and future boards of water supply to site landfills over aquifers, it doesn't...

I think we more prudent for Legislature to maintain its protections and ensure that our children's grandchildren's water security remains as protected as possible. Happy to answer any questions. Thank you very much.

Thank you. We have testimony from Hawaii Reef and Ocean Coalition in support. Testimony from the Energy Justice Network, Mike Ewall, with comments on Zoom.

Yes, thank you. My name is Mike Ewall. I'm with Energy Justice Network. I'm also the elected Co-Chair of the Environmental Caucus of the Democratic Party of Hawaii. First, please note that the the amending of this bill from strengthening state law to gutting it has confused many commenters.

You have a lot of comments that say they're in support of the bill, but they're in support of the original version. And reading the comments makes that clear that there's not a big divide of support and oppose. Everyone supports the original version of this bill, not the gutted version of the bill.

So we'd like to see that restored. But we would also urge you to do what the Water and Land Committee asked, which is to consider language on ash because the majority of what is going in to the current landfill and any new landfill is ash from the H-POWER trash incinerator. And the language from Senate Bill 3259 would protect against a major loophole.

Which is that the City and County of Honolulu has been trying for nearly 30 years now to get permission from the Department of Health to take this ash and build roads with it, which essentially would be linear unlined landfills all over the state that people drive over, threatening the aquifer and other workers and drivers and communities much more than having a double line landfill, even if we're over the aquifer.

So we don't want a double line landfill over the aquifer. But we especially don't want what would be a bigger problem, which is spreading this ash around everywhere in the form of roads and construction materials. So please revert this to the original bill but then add in the Senate Bill 3259 language to close that loophole. Mahalo.

Thank you. Next we have Kupuna for the Moopuna, Nako'olani Warrington in opposition. Environmental Caucus of the Democratic Party in opposition. Free Access Coalition in opposition. Kingdom of the Hawaiian Islands and Ohana Unity Party in opposition. Oh, Shelby Pikachu Billionaire on Zoom.

Hello. Can you guys hear me?

Yes, we can.

Am I coming through? Oh, thank you, guys. So I'm literally shopping in Don Quijote right now. I oppose this bill. Shout out to Wayne, Uncle Ernie. Because when you actually analyze the numbers, they're going to affect the water and the landfills. You guys already know the rest. So I oppose this bill. Thank you very much.

Thank you. We also have testimony from Chamber of Sustainable Commerce in opposition. Ka Lāhui Hawaii in opposition. 51, 54 individuals in opposition, and 41 in support, and 11 with comments. So, Chair, do you have any questions?

Sure. For Department of Health. I mean, in looking at the bill, it looks like it just repeals what we did on this last year. The HD 1 of it.

Yeah, the last committee I believe that was one of the options that we put provided for this. We had said that we're not able to implement the no pass zone, which is what they wanted to add into the statute. And so we gave them options for what could be done.

And in consultation with Board of Water Supply, that was an option that was selected, to repeal the language for the UIC line and to allow the Board of Water Supply to implement their rules and regulations, which includes implementing the no pass on maps as part of the guidance.

Okay. All right, thank you.

Yes, Mr. Lau. So I think what the Department of Health is saying is that these changes were made in consultation with your office, and maybe you can provide some clarification.

Yeah, actually, I think the consultation came when I looked on my phone at the testimony and saw the three options, the Department of Health's testimony. Prior to that, we had not been consulted on those three options.

There was one option, option three, which is my concern, which would have prohibited a seawater well from being developed for desalination to create fresh water being located in the UIC area. So seawater well, saltwater wells are normally close to the ocean. And that's what we're trying to build right now.

The other two options, I really didn't have a chance to... And my bad. During the meeting, didn't have a chance to really kind of look at the two options, options 1 and 2. They posed three options. Options 1 and 2, closely you look at the implications.

But looking at the HD 1, when the committee, and I think the committee was for the protection of our water resources. When the committee went with option one, looking at this HD 1, it negates the good work of this Legislature that was accomplished last year. And I just ask you to please don't let, don't undo the good work that you've done to protect future generations.

Do you have any additional questions? Thank you. With no additional questions, we're going to move on to the next measure. And that is House Bill 1948, HD 1, residential relating to single use plastics.

It prohibits lodging establishments from providing personal care products in small plastic containers within sleeping room accommodations, any space within sleeping room accommodations or bathrooms used by the public or guests. And establishes civil penalties. So first to testify, we're going to have the Department of Land and Natural Resources, Charles Taylor, with comments in person.

Aloha, Chair, Vice Chair. Charlie Taylor with DLNR, Division of Aquatic Resources. We stand on our written testimony providing comments and are available for any questions. Thank you.

Thank you. HTH Environmental Health Administration with comments in person.

Good morning, Chair, Vice Chair. Lene Ichinotsubo with the Department of Health Solid and Hazardous Waste Branch. The department stands on our written testimony offering comment. Our primary comment being that we believe that this language is more appropriate in chapter 483K, titled "Hotels." Thank you for the opportunity.

You said 43K?

483K.

483K.

I'm sorry, 486K.

Oh, thank you. We also have testimony in support from Sustainable Coastlines Hawaii, Maui Chamber of Commerce. Oh, with comments. Climate Protectors Hawaii in support. Solid Waste Task Force of Hawaii Environmental Change Agents in support. Surfrider Foundation in support. Zero Waste Kauai in support. And 14 individuals in support, with one individual in opposition.

Is there anyone else here who would like to provide testimony on this measure? Seeing none. Chair, do you have any questions? Okay. We're going to move on to House Bill 2602, relating to a sustainable tourism infrastructure.

Establishes a sustainable tourism infrastructure matching grant program within the Department of Business, Economic Development, and Tourism to support one time capital investments that advance manageable sustainability and climate resilience outcomes within the state's visitor industry.

Requires annual reports to look Legislature, appropriates funds. First to testify, we have HTA, Caroline Anderson, in support. We have Chamber of Commerce Hawaii, Sherry Menor, in support in person. Hi. Thank you. Hawaii Bicycling League, Eduardo Hernandez, in support.

Good morning, Chair, Vice Chair, Members of the Committee. Thank you for the opportunity to testify. I stand on my written testimony. I would just like to highlight that when this committee or other committees consider the related intersections of tourism, energy, sustainability, climate, that when we fail to use the word bicycle in there or consider bicycle.

A bicycle is the most cost effective solution that we have for so many issues, from transportation to health to recreation to tourism. And so I respectfully ask that you consider the ways that a bicycle can be part of tourism infrastructure as you consider this bill. Thank you.

Thank you. And that's essentially all we have in terms of testimony. Is there anyone else who wishes to provide testimony on this matter? Seeing none. Chair, do you have any questions?

Sure. Quickly, for Bicycling. Sorry. Does any language in the bill or this section of statute preclude bicycling infrastructure from being used?

It doesn't specifically call it out. And it calls out for the people who, the types of entities that would be eligible are sort of your more traditional tourism infrastructure. So we wanted to bring that to your attention because of what's happening in transportation now.

What's happening with the Navahine settlement, how we're really working as a state to get to reduce vehicle miles traveled. That we really want to think about the ways that a bicycle can be included in this. And I bring to your attention.

We just recently had a conversation with the bike share operator on the Big Island. They have a fleet of 24 bicycles, electric bicycles that are currently mothballed. And they could use assistance to fund the deployment of these bicycles. But, you know, they're sort of not able to at this point.

So we would love to see electrification of our bike share come to this island. We haven't seen that yet. Many other cities and destinations that have bike share, part of their fleet is electric. It allows people to go further. Just creates more flexibility in the system. So would really like to consider that bike share be specifically mentioned so that DBEDT recognizes that bicycling is part of our economy.

Thank you.

Thank you.

Any additional questions? No. We will be moving on to House Bill 2334 HD1, relating to transportation environmental review. Authorizes the Department of Transportation to assume responsibilities under the National Environmental Policy act of 1969 for highway projects. As well as, railroad public transportation or multimodal projects within the state.

Allowing streamlined environmental reviews, provides a limited waiver of sovereign immunity to comply with federal requirements. First, to testify in this measure, we have Department of Transportation Ed Sniffin in support on Zoom.

Aloha, Chair Lowen, Vice Chair Perruso. Tammy Lee, Deputy Director for the Department of Transportation. We stand on our recent testimony. Providing strong support for this measure. Thank you.

We also have testimony from two individuals in support. Is there anyone else wishing to testify on this measure? Seeing none. Chair, do you have any questions?

I do not.

Okay. Then we will move on to the final measure.

House Bill 2451, HD 1, relating to transportation. Beginning January 1, 2027, requires each county to implement fare free access to its public transportation systems. Establishes a fare free public transportation tax and dividend special fund.

Increases the environmental response, energy, and food security tax on petroleum products to fund fare free public transportation, effective 7-1-3000. First to testify on this measure, we have the Department of Transportation, Ed Sniffen, in support on Zoom.

DOT stands on its written testimony in support.

Thank you. Department of Taxation, Gary Suganuma, with comments in person.

We'll stand on, Department of Taxation will stand on our written testimony.

Thank you. Attorney General Kacyn Fujii, comments on Zoom.

Good morning. Deputy Attorney General Kacyn Fujii. We have provided our written comments, and I'm available for any questions you have.

Thank you. Hawaii State Energy Office with comments in person.

Aloha. Jon Chin, Hawaii State Energy Office. We'll stand on our written testimony.

Thank you. We have testimony in support from OMPO. And Tax Foundation of Hawaii, Tom Yamachika, with comments on Zoom.

Aloha and good morning. Colleen Teramae on behalf of Tam Yamachika. The Tax Foundation of Hawaii stands on its written comments. Mahalo.

Thank you. Next we have Hawaii Appleseed Center for Law and Economic Justice, Abbey Seitz, in support.

Aloha, Chair, Vice Chair. My name is Abbey Seitz testifying on behalf of Hawaii Appleseed in strong support of this measure. Free transit is one of the most effective ways to increase ridership, reduce household transportation costs, and also improve access to employment and essential services, especially for low income workers.

This legislation we believe could have a transformative change here in Hawaii, leading to not only more people taking the bus, but also improving the lives of existing riders. Recent data from the Honolulu bus shows that 3/4 of riders have a household income of below 60,000.

So the elimination of fares would need more money for housing, groceries, and medical care for the tens of thousands of our island residents who rely on transit every day. Thank you so much for the opportunity to testify.

Thank you. We have Hawaii State Youth Commission in support on Zoom. Not present. Hawaii Public Health Institute in support on Zoom.

Good morning, Chair, Vice Chair, and Members of the Committee. My name is Patti Hatzistavrakis, and I am the Active Transportation Specialist with Hawaii Public Health Institute. The Hawaii Public Health Institute and the Healthy Eating and Active Living Statewide Coalition support this measure and stand on our comments. Public transportation is more than a mobility option.

It is an essential public service for many residents in Hawaii who do not have access to personal transportation. Providing fare free transit for all supports equal access to jobs, education, health care, and community resources. Fare free transit also supports Hawaii's goals to reduce greenhouse gas emissions, roadway congestion, and transportation costs.

We already have proof that this can work. Maui offers free youth transit, and Hawaii County's fare free system has more than doubled its ridership in the last few years. We hope to see a future where all community members have fare free public transit access. And we ask that you pass this measure. And I thank you for the opportunity to testify.

Thank you. We have the Hawaii Bicycling League, Eduardo Hernandez.

Yep. We stand on our written testimony, with the one exception. I titled it incorrectly, as I was reporting to the Transportation Committee, and of course I meant to title it for this committee. Thank you.

Thank you so much. We have testimony in support from the Green Party of Hawaii, Susan Emery. Our Children's Trust, Doorae Shin, in support on Zoom. Not present. Greenpeace Hawaii, Dave Mulinix, in support on Zoom.

Good morning. Dave Mulinix, Greenpeace Hawaii. Excuse me. Sorry about that. A little cold. To some, free bus passes might be seen as a giveaway. We have to be careful not to see this as a giveaway. What we're actually really talking about here is an investment in our future.

We're in a growing climate crisis, headed for a cliff. If we don't avert course pretty quickly, we'll reach unrecoverable tipping points. So we have to dramatically lower our emissions as quickly as possible. Free bus passes will dramatically reduce the number of vehicles on our roads, dramatically lowering our emissions.

We invested $12 billion on the rail with the goal of lowering emissions. The bus takes in about $43 million in fares annually. Compared to $12 billion, $43 million investment is a mere drop in the bucket. If we had given free bus passes instead of doing the rail, we'd already have taken thousands of cars off the road.

And we'd be much further along in reducing our carbon emissions and making our 2045 zero emission goals. This is just good common sense. One of the wisest investments we could do to protect the future of our children, our grandchildren.

Mahalo for having the foresight to hear this essential legislation, and please pass this legislation. Mahalo nui loa for your ongoing commitment to protect our environment. Thank you.

Thank you. We have 350 Hawaii, Sherry Pollack, in support. Environmental Caucus of the Democratic Party of Hawaii in support. Climate Protectors Hawaii in support. Energy Justice Network, Mike Ewall, on Zoom in support.

Yes. Hi, good morning again, Chair, Vice Chair, and Members of the Committee. Mike Ewall with Energy Justice Network in strong support of this bill.

The Navahine settlement led to an energy security and waste reduction plan from HDOT that falls horribly short in supporting a myriad of false solutions that rely on combustion technologies, burning different fuels which still have climate, environmental and public health impacts. Getting people out of vehicles is a far better approach.

It's one of the best things in the plan is doing this sort of thing. It's best done by making public transportation not just free but also safe, clean, and easily understandable, on time, available at the convenient times and frequencies, and reaching the right locations. This bill does the right thing by taxing bads like gasoline and supporting goods for all.

Unlike the other, there's a similar bill that's only for keiki free ride, which is great. But if all taxpayers or actually gasoline buyers are paying for this, then it's good that it benefits everyone. Pricing structures like this work well in other sectors like waste reduction as well as, and we'd love to see this pass. So please vote yes.

Thank you. We also have testimony from Kingdom of the Hawaiian Islands and Ohana Unity Party, Shelby Pikachu Billionaire, in support on Zoom.

Hello, guys. Pikachu Shelby Billionaire. I support this bill 100%. You've seen on social media. I'm glad there's a lot of support coming through because I catch the bus to see you guys. If I gotta testify, I gotta catch the bus. It's 3.25 one way, 3.25 backs.

If you can go a round trip, that's 6.50. I can get a McDonald's five dollar chicken meal deal and get lunch for five dollars cheaper. So if you support this bill, like the other testifier say, which I feel like it's going to go through. And I'm going to get more economy.

The constituents who have more extra income so they can be in housing, infrastructure. Like the other testifier say, we're going to save on the economy, the bills and emissions. I don't catch the rail, I catch the bus because the rail doesn't go to Waianae and I can't see you guys because it doesn't go to the Capitol as well. So please support and pass this bill. Aloha.

Thank you. Last to testify we have Jonathan Lott in support in person. Not present. We have in addition to those who testified already, we have 50 individuals in support, eight opposed, and two with comments. Is there anyone else who wishes to testify on this measure? Please come forward.

Yes, my name is Roger Morton, and I'm the Director of Transportation Services for the city. Like to, my testimony must be late, but it was put in, and we're going to stand on our written testimony. I have some comments too. You know, we do have, we support this bill in principle.

1-1-27 is a little early to implement because we, you know, our estimate is we would probably generate somewhere between 12 to 20 million additional riders. We have 500 buses. It takes us three years to buy a bus. And the, you know, the complex part of running a transit system, just we want to go into this.

We don't want to create a situation where all of a sudden we have overloaded buses. So one issue would be to look at that date. I know that there are several other measures in the Legislature. The keiki ride free, as one of the testifiers mentioned. There's another bill to try a DOT pilot program.

We're fully in support of those programs, and we're fully in support of the principle of this. But I think just from a technical and a logistical point of view, we would urge that you slow down a little bit in terms of the effective date. Thank you. And I stand on my testimony. Happy to answer any questions.

Thank you. Thank you for joining us. If there's no one else who would like to provide testimony on this measure, Members, are there any questions? Chair.

City and County. Sorry, I appreciate your late testimony. Can you just explain further? Since we didn't have your testimony to read prior, do you mind going into a little depth about what your concerns are?

Sure. Well, first, I mean we are, not counting the Handi-Van, we're about a $400 million enterprise right now. The bill puts in $45 million for to replace the revenue. Our revenue is really about 50. But we're also concerned over the long term commitment on the part of the State Legislature.

We would like to see something in a statute that was that provided for an incremental increase because we all know the costs are going to go up every year. And so that's one issue is that you know that the bill doesn't fully replace the revenue that we now have and that we would like to see a more durable source of funding.

When there's a downturn in the economy, that's when we really need public transit the most and that's when we would be worried that we would all of a sudden see it. And that would be a seismic shock for the city if we were doing that.

As I mentioned, we do expect that with fare free that we will have an expansion, and that's what we're all about. I have lots of capacity on many bus routes, but not all. We have capacity on Skyline. But I think that we would need to review our bus expansion plans if we did that.

If we do this, I think that there's an importance of some type of access control. And what I mean by that is that to change the bus from a contractual arrangement between the rider and the bus operator makes it, turns it into an entitlement program.

And that has had negative consequences in some other cities in terms of just the ability to follow the code of conduct and follow the other rules that are important to keep safety and security foremost in our thing. Because that's what people really need to ride good public transportation. They need to feel safe, they need to feel secure.

I think there's ways around that, don't get me wrong, but I think that those would be important steps in doing it. We have another issue for us is we don't have enough bus operators. We're just like school bus right now that we need... We're short of about 60 bus operators out of 1,000. And to put the, to, you know, each time to sort of ramp up.

We're trying our best to ramp up, but like the school bus people, we just have a hard time doing that. And that's why I consider more incremental approach really to let's, you know, the keiki ride free. I think that we're 100% in support of that and the other measures that have been taken right now. So those are my comments.

Thank you, I appreciate it.

Thank you.

Members, other questions?

I got a quick one for you. Can you expand a little bit about the negative consequences of free ridership in other jurisdictions?

I can only tell you anecdotally among the managers that I've talked to, Kansas City has. But the only system that I know that has gone free has been Kansas City. There are some smaller ones, there's some European examples. But in the US that's about the only one that I know of.

It's, you know, it's a tough business to just control the security on a system already. And it just seems that when it goes free it becomes an entitlement and it becomes more difficult to just to enforce the rules of that. The arrangement we have now basically is a contractual arrangement between that and that's... I don't know why, but it just is a, it seems to be an easier thing to control for the bus operator particularly.

Sure, understood. Thank you.

I have a follow up question. So couldn't you just control access by issuing free passes?

Absolutely. All we're saying is we need to have some mechanism like a HOLO card or something like that that retains that relationship of this for that.

Or... Okay. Understood, thank you.

But I mean, roads are free.

Pardon me?

Roads are free.

Roads are free?

I mean they're taxpayer funded like this would be. But they are... There's not a pay to use and therefore people behave well. But yet, I mean we still mostly enforce the rules. I just not, I mean I hear City and County's concerns that this might be premature and to be able to expand in time, etc.

To address safety concerns and all of that would take some time. But the idea that free ridership means because people need to pay and then they behave as an expectation. I'm not sure that I understand the reasoning there.

I don't think that we are, we're not opposed to free. We're just saying that there's some type of access control, whether it's a pass of some kind or something like that that retains. We have our university students ride with our fare less and we have other groups we just implemented. Our city workforce rides free now with stunning increases.

5500 trips before to 22,000 last month. About 200 city workers that use the system to more than 1100. So we know that there's big impacts, and we're very supportive of free. We just want to make sure that we do it in a way that works. And both primarily on the logistical side of let's not overload our transit system too quickly.

Got it. Okay, thank you.

One more follow up on that. Can we just kind of be blunt and just... Are you out sing like the homeless might overpopulate the bus? I know in Hawaii County that's been a small issue. I don't know if you have, is that, is that where you're going with that?

I'm going for behavior. I'm not going for, you know, categorizing people. We're going, we're going for trying to make sure that... I mean when you look at, at public transportation, you know, on Skyline we run, we run the system.

Half the trains don't have anybody, any employee on them. And we don't have issues. On a bus system, we have issues today with bad behavior. And that's really all we are trying to look toward is find a way that we can as best we can.

And there's not many places in society where there's, you got 60-70 people in a vehicle without any so called state support for it. So it's just an issue where we want to make sure that we do the best we possibly can to provide a safe, secure environment.

Sorry. Have you looked at other countries where public transit is much more broadly used, and do they have like enforcement officers on buses? Or what's the...

Well, you don't have to go to other countries. There's many systems in us that have enforcement officers on them. We have enforcement officers for our Skyline system. We don't have sky, we don't have enforcement officers.

And in many cases, like in Portland, Oregon for example, they have teams of two people, one being a social service provider, the other one being an enforcer that are frequently on the vehicles. I don't feel we have the need for that here at this point and want to keep it that way.

Okay. All right, thank you.

Thank you.

Thank you. Seeing no further questions. We're going to recess and then come back for decision making.

All right, we are back for decision making on the 9:30am agenda, the Committee on Energy and Environmental Protection. First up, we have House Bill 2241, relating to renewable energy. This looks at the Renewable Energy Technology Income Tax Credit.

So for this we're going to clarify what we talked about during Q and A. Just that the income threshold and the cap should apply to the same subset. So basically for the third party finance systems, we will not be lifting the cap on those, which is what is mistakenly in the current bill. We're going to also add a second... We're going to add for the income... Sorry, I'll be right there. Here we are.

We're going to have that income threshold be 250 per single, and we will add in filing jointly threshold. I think we'll put at 350 for now, and we're going to wait to hear from DOTAX some numbers of, you know, what the impacts of that might be. And we're going to leave the refundability language in there for now.

But note in the committee report that we should consider whether the tax credit should be refundable. Actually, you know what, I'm changing my mind. We're gonna put in the bill that the refundable, the refundability does not apply to the third party, the third parties claiming the tax credit. So that's for, you know, when they are doing leases, etc. So that the solar companies that installing them can claim a tax credit against existing tax liability but not beyond that.

And we will defect the date to the year 3000. And then probably some technical amendments, clarify a definition for third party or whatever the right term is to refer to these companies that claim the tax credit for the lease systems that are on other individuals' homes. And move this forward. Members, any discussion? Seeing none. Vice Chair.

On House Bill 2241, Chair's recommendation is pass with amendments. Chair and Vice Chair voting aye. [Roll Call] Chair, your recommendation has been adopted.

Thank you. And then for House Bill 2316, relating to lead materials and water infrastructure, we are going to move this forward as is. A clean date. Members, any discussion? Seeing none. Vice Chair.

On House Bill 2316, we're passing unamended. Chair's recommendation is to pass unamended. Chair and Vice Chair voting aye. Noting the excused absence of Representative Quinlan if and until the situation changes. Are there any nos or reservations? Seeing none. Chair, your recommendation has been adopted

Thank you.

And for House Bill 1566, we're going to make some technical amendments for clarity, consistency, and style, and defect the date to the year 3000, and move this forward. Members, any discussion? Seeing none. Vice Chair.

On House Bill 1566, Chair's recommendation is to pass with amendments. Chair and Vice Chair voting aye. Are there any noes or reservations? Seeing none. Chair, your recommendation has been adopted.

Thank you. And for House Bill 1926, relating to Red Hill. We will move this forward as is. Members, any discussion? Seeing none. Vice Chair, please take the vote.

On House Bill 1926, HD 1. Chair's recommendation is to pass unamended. Chair and Vice Chair voting aye. Are there any noes or reservations? Seeing none. Chair, your recommendation has been adopted.

Thank you. And then House Bill 1673, relating to landfill units.

For now, we're going to defer decision making to Thursday, February 17th, at the end of the 9:45am agenda here in Room 325 to talk to the author of the bill and just try to figure out if there's a way to move forward while addressing the concerns. House Bill 1948, relating to single use plastics. We will move this forward as is. Members, any discussion? Seeing none. Vice Chair.

On House Bill 1948, HD 1. The Chair's recommendation is to pass unamended. Chair and Vice Chair voting aye. Are there any noes or reservations? Seeing none. Chair, your recommendation has been adopted.

On House Bill 2602, relating to a sustainable tourism infrastructure. We will amend this to include suggestion of the Hawaii Cycling League, but we will include cycling infrastructure and micro mobility infrastructure as well. And that is all. Members, any discussion? Seeing none. Vice Chair.

On House Bill 2602, HD 1. Chair's recommendation is to pass with amendments. Chair and Vice Chair voting aye. Are there any noes or reservations? Seeing none. Chair, your recommendation has been adopted.

And for House Bill 2334, relating to transportation environmental review. We will move this forward as is. Members, any discussion? Seeing none. Vice Chair.

On House Bill 2334, HD 1. Chair's recommendation is to pass unamended. Chair and Vice Chair voting aye. Are there any noes or reservations? Seeing none. Chair, your recommendation has been adopted.

And for House Bill 2451. Just noting the concerns raised for this hearing by City and County of Honolulu about maybe this is taking too big a bite at once and preferring the more phased approach of the keiki ride free program that's in House Bill 1879. We're going to defer this bill. And with that, we are adjourned.

We're going to defect the date on this and move this forward to continue the conversation about, this is really relating not so much to customer bills, but just to what information is made available in PUC filings regarding how HECO makes some of their assumptions regarding the cost of power purchase agreements, etc. So I think it's a valuable discussion to continue. So defective dates and move this forward. Members, any discussion? Seeing none. Vice Chair.

House Bill 2243. Chair's recommendation is pass with amendments. Chair and Vice Chair voting aye. Are there any noes or reservations? Seeing none. Chair, your recommendation has been adopted.

Right. And now we are adjourned. Thank you.