Report Title:

Fuel Tax Revenues; Fixed Guideway Mass Transit

Description:

Reserves a portion of state fuel tax revenues paid in Honolulu to pay for a fixed guideway mass transit system. Enables counties to raise county fuel tax rates and to establish an ad valorem tax on motor vehicles to fund mass transit. (SD2)

HOUSE OF REPRESENTATIVES

H.B. NO.

1645

TWENTY-THIRD LEGISLATURE, 2005

H.D. 1

STATE OF HAWAII

S.D. 2


 

A BILL FOR AN ACT

 

relating to mass transit.

 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

SECTION 1. Chapter 243, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"§243-   Mass transit planning account; established. (a) There is established, as a special account within the state highway fund established under section 248-8, a mass transit planning account, into which shall be deposited tax revenues collected and allotted pursuant to section 243-4(a) and (b); provided that the total amount deposited into the special account shall not exceed $ . No later than January 1, 2007, the director of finance shall transfer $ from the mass transit planning account to a separate account of the highway fund established pursuant to section 249-18 of each county having a population of greater than five hundred thousand residents.

(b) Upon receiving the $ under subsection (a), the county shall use the moneys to develop and finalize a mass transit work plan that includes the use of a fixed guideway mass transit system. The county council shall approve the finalized mass transit work plan through the adoption of a resolution within one year of receipt of the funds under subsection (a) to qualify for the receipt of moneys under subsection (c).

(c) Upon the adoption of a resolution by the county council finalizing the mass transit work plan and notification of the finalization from the county council, the director of finance shall transfer the remaining $ from the mass transit planning account to the separate account of the county's highway fund established pursuant to section 249-18 to execute an environmental impact statement on and establish a financial plan for a fixed guideway mass transit system. The county shall complete the environmental impact statement and the financial plan within two years of receipt of the moneys under this subsection. If the county fails to complete the environmental impact statement and the financial plan, then the county shall be liable to the State for the return of all moneys transferred pursuant to this section; provided that the legislature, by the adoption of a concurrent resolution, may extend the two-year period for good cause.

(d) Prior to utilizing the moneys provided by the State for the purposes of this section, the county shall first utilize moneys from all other available funding resources, including federal funds, to accomplish the purposes of this section.

(e) If the county council fails to adopt a finalized mass transit work plan within one year of receipt of the moneys under subsection (a), or the moneys transferred to the county under subsection (c) are in excess of the needs of the county to execute an environmental impact statement and establish a financial plan, then all remaining moneys left in the mass transit planning account and the moneys transferred to the county in excess of its needs shall be returned to the state highway fund. Upon the transfer of the moneys under subsection (c), the state director of finance may abolish the special account. Any funds remaining in the account shall lapse to the credit of the state highway fund."

SECTION 2. Chapter 249, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"§249-   Ad valorem motor vehicle tax. (a) In addition to the tax imposed under section 249-2, and except as otherwise provided in sections 249-1 to 249-13, and antique motor vehicles that shall be subject to an annual tax of $10 in lieu of the annual tax otherwise imposed by section 249-2 or this section, all vehicles and motor vehicles as defined in section 249-1, shall be subject to an annual tax, computed, except for the minimum tax provided for in section 249-13, according to the value of each vehicle at a rate determined in the same manner as provided in section 249-13(a). The tax shall become due and payable on January 1 and shall be paid before April 1, in each year. The tax shall be paid by the owner of each vehicle in the county in which the vehicle is located at the time of registration, whether the original registration or any subsequent registration, and shall be collected by the director of finance of that county; provided that if any motor vehicle is transported to another county after the payment of the tax imposed under this section, no additional tax shall be imposed on the motor vehicle for the remaining period of the year for which the tax has been paid.

(b) Each county establishing an ad valorem motor vehicle tax system in addition to the tax imposed under section 249-2 shall adopt an ordinance that establishes the tax and a process to determine the value and rate of depreciation of motor vehicles.

(c) The revenues generated by the ad valorem tax authorized under this section shall be used solely for the purposes and functions of mass transit."

SECTION 3. Section 243-4, Hawaii Revised Statutes, is amended by amending subsections (a) and (b) to read as follows:

"(a) Every distributor [shall], in addition to any other taxes provided by law, shall pay a license tax to the department of taxation for each gallon of liquid fuel refined, manufactured, produced, or compounded by the distributor and sold or used by the distributor in the State or imported by the distributor, or acquired by the distributor from persons who are not licensed distributors, and sold or used by the distributor in the State. Any person who sells or uses any liquid fuel knowing that the distributor from whom it was originally purchased has not paid and is not paying the tax thereon shall pay [such] the tax [as] that would have applied to [such] the sale or use by the distributor. The rates of tax hereby imposed are as follows:

(1) For each gallon of diesel oil, 1 cent;

(2) For each gallon of gasoline or other aviation fuel sold for use in or used for airplanes, 1 cent;

(3) For each gallon of liquid fuel other than fuel mentioned in paragraphs (1) and (2), and other than an alternative fuel, sold or used in the city and county of Honolulu, or sold in any county for ultimate use in the city and county of Honolulu, 16 cents state tax, and in addition [thereto such] to that amount, an amount to be known as the "city and county of Honolulu fuel tax"[, as shall be] levied pursuant to section 243-5; provided that of the 16 cents state tax,     cents shall be paid into the mass transit planning account within the state highway fund, established pursuant to section 243-   , and disbursed in accordance with that section into a separate account of the highway fund of a county having a population of greater than five hundred thousand residents, established pursuant to section 249-18, to:

(A) Develop and finalize a mass transit work plan;

(B) Execute an environmental impact statement; and

(C) Establish a financial plan for a fixed guideway mass transit system;

(4) For each gallon of liquid fuel other than fuel mentioned in paragraphs (1) and (2), and other than an alternative fuel, sold or used in the county of Hawaii, or sold in any county for ultimate use in the county of Hawaii, 16 cents state tax, and in addition [thereto such] to that amount, an amount to be known as the "county of Hawaii fuel tax"[, as shall be] levied pursuant to section 243-5;

(5) For each gallon of liquid fuel other than fuel mentioned in paragraphs (1) and (2), and other than an alternative fuel, sold or used in the county of Maui, or sold in any county for ultimate use in the county of Maui, 16 cents state tax, and in addition [thereto such] to that amount, an amount to be known as the "county of Maui fuel tax"[, as shall be] levied pursuant to section 243-5; and

(6) For each gallon of liquid fuel other than fuel mentioned in paragraphs (1) and (2), and other than an alternative fuel, sold or used in the county of Kauai, or sold in any county for ultimate use in the county of Kauai, 16 cents state tax, and in addition [thereto such] to that amount, an amount to be known as the "county of Kauai fuel tax"[, as shall be] levied pursuant to section 243-5.

If it is shown to the satisfaction of the department, based upon proper records and from [such] any other evidence as the department may require, that liquid fuel, other than fuel mentioned in paragraphs (1) and (2), is used for agricultural equipment that does not operate upon the public highways of the State, the user thereof may obtain a refund of all taxes thereon imposed by this section in excess of 1 cent per gallon. The department shall adopt rules to administer [such] the refunds.

(b) Every distributor of diesel oil, in addition to the tax required by subsection (a), shall pay a license tax to the department for each gallon of [such] diesel oil sold or used by the distributor for operating a motor vehicle or motor vehicles upon public highways of the State. The rates of the additional tax hereby imposed are as follows:

(1) For each gallon of diesel oil sold or used in the city and county of Honolulu, or sold in any other county for ultimate use in the city and county of Honolulu, 15 cents state tax, and in addition [thereto such] to that amount, an amount to be known as the "city and county of Honolulu fuel tax"[, as shall be] levied pursuant to section 243-5; provided that of the 15 cents state tax,     cents shall be paid into the mass transit planning account within the state highway fund established pursuant to section 243-   , and disbursed in accordance with that section into a separate account of the highway fund of a county having a population of greater than five hundred thousand residents, established pursuant to section 249-18, to:

(A) Develop and finalize a mass transit work plan;

(B) Execute an environmental impact statement; and

(C) Establish a financial plan for a fixed guideway mass transit system;

(2) For each gallon of diesel oil sold or used in the county of Hawaii, or sold in any other county for ultimate use in the county of Hawaii, 15 cents state tax, and in addition [thereto such] to that amount, an amount to be known as the "county of Hawaii fuel tax"[, as shall be] levied pursuant to section 243-5;

(3) For each gallon of diesel oil sold or used in the county of Maui, or sold in any other county for ultimate use in the county of Maui, 15 cents state tax, and in addition [thereto such] to that amount, an amount to be known as the "county of Maui fuel tax"[, as shall be] levied pursuant to section 243-5; and

(4) For each gallon of diesel oil sold or used in the county of Kauai, or sold in any other county for ultimate use in the county of Kauai, 15 cents state tax, and in addition [thereto such] to that amount, an amount to be known as the "county of Kauai fuel tax"[, as shall be] levied pursuant to section 243-5.

If any user of diesel oil furnishes a certificate, in [such] a form as the department shall prescribe, to the distributor, or the distributor who uses diesel oil signs [such] the certificate, certifying that the diesel oil is for use in operating a motor vehicle or motor vehicles in areas other than upon the public highways of the State, the tax as provided in paragraphs (1) to (4) shall not be applicable. In the event a certificate is not or cannot be furnished and the diesel oil is in fact for use for operating a motor vehicle or motor vehicles in areas other than upon public highways of the State, the user thereof may obtain a refund of all taxes thereon imposed by [the foregoing] paragraphs[.] (1) to (4). The department shall adopt rules to administer the refunding of [such] the taxes."

SECTION 4. Section 243-5, Hawaii Revised Statutes, is amended to read as follows:

"§243-5 County fuel tax. (a) The amount of the "county of Hawaii fuel tax", "city and county of Honolulu fuel tax", "county of Maui fuel tax", and "county of Kauai fuel tax", respectively, shall be determined by resolution of the county or the city council of each county adopted in the manner provided by law relating to resolutions involving the expenditure of public money. The amount fixed by the resolution may be, per gallon, one or more cents or a fraction of a cent or both, or it may be zero. The amount fixed for alternative fuels may be proportional to the energy contents of the fuels, as determined by their lower heating values, times one-half. No resolution shall be adopted until the county or the city council shall conduct a public hearing on the amount of tax proposed. Public notice of the hearing shall be given in the county at least twice within a period of thirty days immediately preceding the date of hearing. If the resolution is adopted, it shall take effect on the first day of the second month following the date of adoption of the resolution. The county or the city council shall notify the department of taxation of any county fuel tax changes within ten days after the resolution is adopted.

(b) In each county having a population of greater than five hundred thousand residents, in addition to any county fuel tax amount adopted pursuant to subsection (a), a county may also determine and adopt an amount to be assessed as a part of the respective county's fuel tax for the purposes of planning, constructing, and operating a county's mass transit system. The amount shall be adopted in accordance with the procedures established under subsection (a).

(c) Until and unless otherwise provided by resolution adopted as above provided, the amount of the "county of Hawaii fuel tax" shall be zero, the amount of the "city and county of Honolulu fuel tax" shall be 2-1/2 cents per gallon, the amount of the "county of Maui fuel tax" shall be 2 cents per gallon, and the amount of the "county of Kauai fuel tax" shall be 2 cents per gallon."

SECTION 5. Section 248-9, Hawaii Revised Statutes, is amended to read as follows:

"§248-9 State highway fund. (a) Moneys in the state highway fund may be expended for the following purposes:

(1) To pay the costs of operation, maintenance, and repair of the state highway system, including without limitation, the cost of equipment and general administrative overhead;

(2) To pay the costs of acquisition (including real property and interests therein), planning, designing, construction and reconstruction of the state highway system, and bikeways, including, without limitation, the cost of equipment and general administrative overhead; [and]

(3) To reimburse the general fund for interest on and principal of general obligation bonds issued to finance highway projects where the bonds are designated to be reimbursable out of the state highway fund[.]; and

(4) For purposes and functions of mass transit.

(b) At any time, the director of transportation may transfer from the state highway fund all or any portion of available moneys determined by the director of transportation to be in excess of one hundred thirty-five per cent of the requirements for the ensuing twelve months for the state highway fund as permitted by and in accordance with section 37-53. For purposes of the determination, the director of transportation shall take into consideration:

(1) The amount of federal funds and bond funds on deposit in, and budgeted to be expended from, the state highway fund during the period;

(2) Amounts on deposit in the state highway fund [which] that are encumbered or otherwise obligated;

(3) Budgeted amounts payable from the state highway fund during the period;

(4) Revenues anticipated to be received by and expenditures to be made from the state highway fund during the period based on existing agreements and other information for the ensuing twelve months; and

(5) Any other factors as the director of transportation shall deem appropriate."

SECTION 6. Section 249-13, Hawaii Revised Statutes, is amended to read as follows:

"§249-13 Determination of rate. (a) The council shall determine the rate and the minimum tax at which all vehicles and motor vehicles in each respective county shall be taxed as provided by section 249-2[.] or section 249-  . In making the determination[,] for the tax imposed under section 249-2, the rate and minimum tax on trucks or noncommercial motor vehicles shall be in accordance with subsection (b). The rate and minimum tax shall be established by ordinance, provided that prior to final action thereon a public hearing shall be held on the proposed rate. Public notice of the time and place of the hearing shall be given at least ten days prior to the hearing in the county. After the public hearing the council may fix the rate and the minimum tax at any amount deemed necessary, but the rate and the minimum shall not be higher than that originally proposed when the notice of public hearing was given. Any rate and minimum tax so established shall be effective as of January 1 of the year following the date of enactment of the ordinance.

(b) [The] With respect to the tax imposed under section 249-2, the rate and minimum tax for a truck or noncommercial motor vehicle shall be the same as provided for a passenger vehicle if:

(1) The truck or noncommercial motor vehicle has a net weight of six thousand five hundred pounds or less; and

(2) The owner submits proof to the director of finance that the truck or noncommercial motor vehicle is not being operated for compensation or commercial purposes.

(c) Any person who submits proof under subsection (b) to the director of finance knowing that it is false shall be guilty of a petty misdemeanor."

SECTION 7. Section 249-18, Hawaii Revised Statutes, is amended to read as follows:

"§249-18 Highway fund. All taxes collected under this chapter, except those collected pursuant to sections 249-14 and 249-14.5, shall be deposited in a fund to be known as the "highway fund" and shall be expended in the county in which the taxes are collected for the following purposes:

(1) For acquisition, designing, construction, improvement, repair, and maintenance of public roads and highways, including without restriction of the foregoing purposes, costs of new land therefor, of permanent storm drains or new bridges, as well as repairs or additions to storm drains or bridges;

(2) For installation, maintenance, and repair of street lights and power, and other charges for street lighting purposes, including replacement of old street lights, on [county maintained] county-maintained public roads and highways;

(3) For purposes and functions connected with traffic control and preservation of safety upon the public highways and streets;

(4) For payment of interest on and redemption of bonds issued to finance highway and street construction and improvements;

(5) In the case of the city and county of Honolulu, for appropriation for the police department up to the sum of $500,000. No expenditures shall be made out of this fund [which] that will jeopardize federal aid for highway construction;

(6) For purposes and functions connected with mass transit; [and] provided that for any county having a population of greater than five hundred thousand residents, the county shall establish a separate account within its highway fund into which shall be deposited the portion of state license tax revenues allotted for each gallon of fuel taxed under section 243-4(a)(3), and the portion of state license tax revenues allotted for each gallon of diesel oil taxed under section 243-4(b)(1) and transferred from the mass transit planning account established under section 243-   , to:

(A) Develop and finalize a mass transit work plan;

(B) Execute an environmental impact statement; and

(C) Establish a financial plan for a fixed guideway mass transit system.

No expenditures shall be made out of this fund that will jeopardize federal aid for highway construction; and

(7) For the acquisition, design, construction, improvement, repair, and maintenance of bikeways."

SECTION 8. There is appropriated out of the state highway fund established pursuant to section 248-8, Hawaii Revised Statutes, the sum of $ , or so much thereof as may be necessary for fiscal year 2005-2006, for deposit into the mass transit planning account established under section 243-  , Hawaii Revised Statutes.

SECTION 9. There is appropriated out of the mass transit planning account established under section 243-  , Hawaii Revised Statutes, the sum of $ , or so much thereof as may be necessary for fiscal year 2005-2006, as a grant-in-aid to the city and county of Honolulu for mass transit planning.

The sum appropriated shall be expended by the city and county of Honolulu for the purposes of this Act.

SECTION 10. There is appropriated out of the state highway fund established pursuant to section 248-8, Hawaii Revised Statutes, the sum of $ , or so much thereof as may be necessary for fiscal biennium 2005-2007, for deposit into the mass transit planning account established under section 243-  , Hawaii Revised Statutes; provided that no moneys shall be deposited into the mass transit planning account unless the city and county of Honolulu first complies with the requirements of section 243-  (b) and (c), Hawaii Revised Statutes.

SECTION 11. There is appropriated out of the mass transit planning account established under section 243-  , Hawaii Revised Statutes, the sum of $ , or so much thereof as may be necessary for fiscal biennium 2005-2007, as a grant-in-aid to the city and county of Honolulu to execute an environmental impact statement on and establish a financial plan for a fixed guideway mass transit system in accordance with section 243-  (c), Hawaii Revised Statutes.

The sum appropriated shall be expended by the city and county of Honolulu for the purposes of this Act.

SECTION 12. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 13. This Act shall take effect on July 1, 2050.