STAND. COM. REP. NO. 1057

Honolulu, Hawaii

RE: S.B. No. 777

S.D. 2

Honorable Ronald D. Kouchi

President of the Senate

Thirty-Second State Legislature

Regular Session of 2023

State of Hawaii

Sir:

Your Committee on Ways and Means, to which was referred S.B. No. 777, S.D. 1, entitled:

"A BILL FOR AN ACT RELATING TO CESSPOOLS,"

begs leave to report as follows:

The purpose and intent of this measure is to establish a financial incentive to reduce the number of cesspools in the State.

More specifically, this measure establishes a temporary income tax credit for the cost of upgrading or converting a qualified cesspool to a wastewater system approved by the Director of Health, or connecting to a sewerage system.

Your Committee received written comments in support of this measure from the Department of Health, State of Hawaii Climate Change Mitigation and Adaptation Commission, University of Hawaii, Environmental Caucus of the Democratic Party of Hawaii, Hawaii Association of REALTORS, and two individuals.

Your Committee received written comments on this measure from the Department of Taxation and Tax Foundation of Hawaii.

Your Committee finds that cesspools are a major source of pollution to Hawaii's waters. Your Committee also finds that there are approximately eighty-three thousand cesspools in the State, discharging millions of gallons of untreated sewage into the groundwater every day. The sewage-polluted groundwater flows into drinking water sources, streams, and the ocean, harming public health and the environment, including beaches and coral reefs. Your Committee believes that cesspools should be phased out to eliminate threats to drinking water and recreational waters.

Your Committee has amended this measure by:

(1) Making a technical amendment to clarify the certification of expenses used to claim the tax credit; and

(2) Changing the effective date to July 1, 2050, to facilitate further discussion on the measure.

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 S.B. No. 777, S.D. 1, as amended herein, and recommends that it pass Third Reading in the form attached hereto as S.B. No. 777, S.D. 2.

Respectfully submitted on behalf of the members of the Committee on Ways and Means,

________________________________

DONOVAN M. DELA CRUZ, Chair