STAND. COM. REP. NO. 293

Honolulu, Hawaii

RE: S.B. No. 777

S.D. 1

Honorable Ronald D. Kouchi

President of the Senate

Thirty-Second State Legislature

Regular Session of 2023

State of Hawaii

Sir:

Your Committee on Agriculture and Environment, to which was referred S.B. No. 777 entitled:

"A BILL FOR AN ACT RELATING TO CESSPOOLS,"

begs leave to report as follows:

The purpose and intent of this measure is to provide a temporary income tax credit for the cost of upgrading or converting a qualified cesspool to a wastewater system or for connecting a qualified cesspool to a sewage system.

Your Committee received testimony in support of this measure from the Department of Health, University of Hawai‘i System, Department of Environmental Management of the County of Hawai‘i, Hawai‘i REALTORS, Environmental Caucus of the Democratic Party of Hawai‘i, Surfrider Foundation, and four individuals. Your Committee received comments on this measure from the Department of Taxation and Tax Foundation of Hawaii.

Your Committee finds that cesspools are a significant problem in the State and a major source of pollution in Hawaii. There are an estimated 83,000 cesspools in the State that discharge millions of gallons of untreated sewage into the soil every day, which may flow into drinking water sources, streams, and the ocean, threatening public health and the environment. Your Committee additionally finds that the State has set a mandate to convert all cesspools to a Director of Health approved wastewater system by 2050 and must be proactive with effective and purposeful legislation to meet this goal. This measure will provide financial relief to those who seek to upgrade their cesspools through a temporary income tax credit, which will offset some of the financial difficulties of cesspool conversion and incentivize upgraders to act quickly to take advantage of this credit's availability.

Your Committee has amended this measure by specifying the Department of Health as the agency responsible for the certification of qualified expenses, as requested by the Department of Taxation.

As affirmed by the record of votes of the members of your Committee on Agriculture and Environment that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 777, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 777, S.D. 1, and be referred to your Committee on Ways and Means.

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

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MIKE GABBARD, Chair