Report Title:

Environmental Protection; Motor Vehicles; Greenhouse Gases

 

Description:

Establishes the Hawaii clean vehicle incentive program to encourage consumers to purchase motor vehicles with low greenhouse gas emissions.  Creates special fund to receive surcharges and fund rebates.

 


HOUSE OF REPRESENTATIVES

H.B. NO.

2102

TWENTY-FOURTH LEGISLATURE, 2008

 

STATE OF HAWAII

 

 

 

 

 

 

A BILL FOR AN ACT


 

 

relating to environmental protection.

 

 

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

 


     SECTION 1.  The legislature finds that:

     (1)  Undertaking action to reduce greenhouse gas emissions will likely create long-term economic benefits to the State's economy;

     (2)  While substantial progress has been made in reducing smog-forming emissions from new motor vehicles, there remain disparities in the amount of allowable emissions of criteria pollutants among the identified categories of exhaust emissions standards for passenger vehicles;

     (3)  Monetary incentives can encourage automobile buyers to purchase cleaner vehicles and encourage manufacturers to offer more low-emitting vehicle choices to Hawaii consumers;

     (4)  One-time rebates on the purchase of new motor vehicles that emit low amounts of greenhouse gases are a reasonable and appropriate method to incentivize the purchase of these vehicles;

     (5)  One-time surcharges on the purchase of new motor vehicles that emit high amounts of greenhouse gases are a reasonable and appropriate method to disincentivize the purchase of and internalize the environmental cost to the public of these vehicles;

     (6)  The creation of a clean vehicle incentive program to reduce greenhouse gas emissions from motor vehicles is a market-based mechanism that does not create any new regulatory standard under the law; and

     (7)  The impact of global warming poses a serious threat to the economic well-being, public health natural resources, and environment of Hawaii.

     The purpose of this Act is to establish a market-based clean vehicle incentive program consisting of one-time rebates and one-time surcharges on the purchase of new motor vehicles to mitigate against emissions of greenhouse gases from motor vehicles.  The program is to be self-financing and is not intended to increase expenditures from or reduce revenues into the general fund.

     SECTION 2.  The Hawaii Revised Statutes is amended by adding a new chapter to be appropriately designated and to read as follows:

"Chapter

HAWAII CLEAN VEHICLE INCENTIVE PROGRAM

     §   -1  Definitions.  For purposes of this chapter:

     "Authorized emergency vehicle" shall have the same meaning as defined in section 291C-1.

     "Carbon dioxide equivalent" means a metric, as determined by the council, used to compare or identify the emissions from various greenhouse gases based upon their global warming potential derived by multiplying the tons of the gas by the associated global warming potential.

     "Contributory pollutant" means an air toxic pollutant or contaminant, including, but not limited to, black carbon, carbon monoxide, and nitrous oxide that the council has determined contributes to global warming.

     "Council" means the environmental council.

     "Criteria air pollutant" means an air pollutant for which the United States Environmental Protection Agency has issued primary or secondary national air quality standards pursuant to Sections 108 and 109 of the federal Clean Air Act (42 U.S.C. Secs. 7408 and 7409), including carbon monoxide, lead, nitrogen oxides, ozone, particulate matter, and sulfur dioxide.

     "Dealer" means any person licensed under chapter 437.

     "Department" means the department of health.

     "Director" means the director of health.

     "Fund" means the clean vehicle incentive special fund.

     "Greenhouse gas factor" means the dollar value, as determined by the council, that is assigned to carbon dioxide equivalent emissions per mile from a motor vehicle.  At the discretion of the council, this may be expressed in dollars divided by grams of carbon dioxide equivalent per mile ($/g CO2 -eq/mi).

     "Greenhouse gases" means carbon dioxide, hydrofluorocarbons, methane, oxides of nitrogen, perfluorocarbons, and sulfur hexafluoride, and any other gases that the council determines contribute significantly to global warming.

     "Motor vehicle" or "vehicle" means a light- or medium-duty passenger vehicle with a gross vehicle weight rating of ten thousand pounds or less, as determined by the council.

     "New motor vehicle" shall have the same meaning as defined in section 437-1.1.

     "Program" means the clean vehicle incentive program established pursuant to this chapter.

     "Retail sale" means a retail sale of a new motor vehicle.

     "Zero band" means that portion of a linear scale of rebates and surcharges in which vehicles are assigned neither a rebate nor a surcharge.

     §   -2  Rebate eligibility and payment.  (a)  Any resident of the State who purchases a qualified new motor vehicle at a retail sale in the State shall receive a clean vehicle rebate for the purchase after June 30, 2010, of a new motor vehicle of model year 2011 or later, determined by the council to be eligible for a rebate in the amount assigned by the director pursuant to rules adopted under this chapter.

     (b)  The dealer shall clearly indicate the amount of the rebate owed to the new motor vehicle owner on the purchase receipt and contract or lease agreement, as applicable.

     (c)  To receive the rebate, the motor vehicle owner shall file a claim on a form prescribed by the director through the dealer at the time of purchase.

     (d)  The dealer shall facilitate and accept rebate claims from new motor vehicle owners and shall submit rebate claims to the department, in a time, place, and manner determined by the department.  Each rebate claim shall be accompanied by proof of vehicle purchase from the dealer.  The proof of purchase shall include, at a minimum:

     (1)  The date when the vehicle was purchased;

     (2)  The year, make, and model of the vehicle purchased;

     (3)  The vehicle identification number of the vehicle; and

     (4)  The price paid for the vehicle.

     (e)  The department shall pay the rebate to the eligible new motor vehicle owner through electronic funds transfer if requested by the owner.

     (f)  The department shall make every reasonable effort to pay the rebate to the eligible new motor vehicle owner within sixty days of receiving the rebate claim form.  No interest shall be paid on any rebate made pursuant to this article.

     §   -3  Surcharge.  (a)  Except as otherwise provided for in this chapter, a person who becomes a motor vehicle owner by purchasing at a retail sale, after June 30, 2010, a new motor vehicle of model year 2011 or later, determined by the council to be subject to an emissions surcharge, shall pay the emissions surcharge in the amount determined by the director pursuant to rules adopted under this chapter.

     (b)  Dealers shall collect from the new motor vehicle owners the emissions surcharge at the time of retail sale.

     (c)  Dealers shall clearly indicate the amount of the emissions surcharge paid by the new motor vehicle owner on the purchase receipt and contract, or lease agreement as applicable.

     (d)  All emissions surcharges collected by a dealer shall be owed to the State and be due and payable to the department in a time, place, and manner prescribed by the director.

     §   -4  Rules.  (a)  No later than July 1, 2009, the director, in consultation with the council and any other state agencies that the director determines are appropriate, and after at least two public workshops, shall adopt rules under chapter 91 to create and implement a clean vehicle incentive program that achieves the maximum feasible and cost-effective reduction of greenhouse gas emissions from motor vehicles.

     (b)  The director shall establish by rule a schedule of one-time clean vehicle rebates and one-time emissions surcharges for all new motor vehicles not otherwise excluded in this chapter.

     (c)  The schedule of rebates and surcharges shall take effect July 1, 2010, and shall apply to motor vehicles with the 2011 model year and each model year thereafter.

     §   -5  Calculation of rebate and surcharge.  (a)  The director shall calculate, using a linear scale, the rebate or surcharge to be applied to any motor vehicle subject to the program based on the vehicle's emissions of greenhouse gases, compared to the greenhouse gas emissions of all motor vehicles of the same model year that are subject to the program.

     (b)  For purposes of calculating the rebate or surcharge, the council shall determine the difference between a motor vehicle's emissions of greenhouse gases, as determined by the council,  and the average emissions of greenhouse gases of all vehicles subject to the program, for a given model year.  The difference identified for each vehicle based on emissions of greenhouse gases shall be multiplied by a greenhouse gases factor to determine the amount of the rebate or surcharge attributed to emissions of greenhouse gases.

     (c)  The amount determined pursuant to subsection (b) may be adjusted to account for one or both of the following, but no adjustments pursuant to this section shall affect the rebate or surcharge by a factor larger than twenty per cent:

     (1)  Emissions of contributory pollutants as determined by the council; or

     (2)  Emissions of criteria air pollutants.

     (d)  Based on the council's calculations made pursuant to subsections (b) and (c), the director shall assign a rebate or surcharge to every motor vehicle subject to this program that reflects its relative emissions of greenhouse gases and, at the discretion of the director, its relative emissions of contributory pollutants or criteria air pollutants, compared to all vehicles for the same model year that are subject to the program; provided that:

     (1)  The director shall establish a zero band that includes the midpoint of the linear scale and includes not less than twenty per cent, nor more than twenty-five per cent, of the fleet of a given model year.  Motor vehicles that fall within the zero band shall not be assigned a rebate or a surcharge;

          (A)  The zero band shall be designed, placed, and adjusted along the linear scale to ensure that vehicle buyers continue to have a variety of choices among multiple vehicle types, including light-duty trucks, that are not assigned a surcharge; and

          (B)  The director shall consider sales-weighted data in determining the placement of the zero band and the schedule of rebates and surcharges;

     (2)  The maximum rebate and surcharge shall not be less than $2,250 nor more than $2,500, and no surcharge shall exceed the amount of the general excise tax applicable to the purchase price of the motor vehicle;

     (3)  No rebate or surcharge shall be less than $100.  Motor vehicles that would otherwise be assigned a rebate or surcharge of less than $100 shall be placed in the zero band; and

     (4)  The director may round up or down the assigned rebate and surcharge amounts to the nearest $25 for each motor vehicle.

     (e)  When setting the schedule of rebates and surcharges for motor vehicles of a given model year, the director shall consider previous years' sales data and projected sales of motor vehicles to ensure that the program will incentivize reductions in greenhouse gas emissions and be self-financing.

     §   -6  Schedule of rebates and surcharges.  (a)  The schedule of rebates and surcharges shall be designed to ensure that the program will be self-financing and will generate adequate revenues to:

     (1)  Fund the cost of all rebates and surcharge refunds associated with the program;

     (2)  Fund all administrative costs associated with the program; and

     (3)  Provide for a reserve within the program equal to approximately fifteen per cent of the estimated rebates to ensure the account, to the extent possible, will have a positive balance at the end of each fiscal year.

     (b)  If the director determines that the amount of the reserve specified in subsection (a)(3) is either excessive or inadequate at the fifteen per cent level to meet the requirements of subsection (a)(1) and (2), it may reduce or increase the size of the reserve as needed to satisfy those requirements.

     (c)  The schedule of rebates and surcharges may be adjusted not more than once per model year to meet the requirements of this chapter.  Any adjustments pursuant to this section shall become operative on the first day of the first month that commences at least ninety days after the director formally adopts the adjustment to the schedule.

     (d)  The director shall make annual or biennial adjustments to the schedule of surcharges and rebates, and the placement of the zero band, based on recent and anticipated changes in motor vehicle sales to ensure that the program continues to generate adequate revenues to meet the requirements of subsection (a).

     §   -7  Applicability.  (a)  The schedule of rebates and surcharges, as adjusted annually or biennially, shall take effect no earlier than July 1 of each subsequent year, and be applied to new motor vehicles of the next model year accordingly.  The director may make adjustments biennially only if the director determines that:

     (1)  The program will remain self-financing and is not in jeopardy of running a deficit; and

     (2)  It is in the best interest of achieving the goals of the program to not make adjustments more often than once every two years.

     (b)  In the first year of the program, the director may delay implementation of the rebate eligibility for up to sixty days after the surcharges initially take effect to ensure that adequate funds are available to fund the program's rebates.

     §   -8  Effect of taxes.  The rebates and surcharges adopted by the director shall be assigned to the price of the motor vehicle after applicable taxes have been added.  State general excise taxes shall not have an effect on the assigned rebate or surcharge.

     §   -9  Motor vehicles purchased outside the State.  (a)  Any person who purchases a new motor vehicle outside of the State that would otherwise have been subject to an emissions surcharge shall pay the surcharge to the department of transportation at the time of the motor vehicle's initial registration in the State.  The director and department of transportation and county agencies having responsibility for motor vehicle registration shall cooperate to develop procedures to implement this chapter.

     (b)  Motor vehicles purchased outside of the State shall not be eligible for a rebate.

     §   -10  New motor vehicle leases.  (a)  Any state resident who leases from a dealer a new motor vehicle, otherwise subject to an emissions surcharge, for a term of one year or more, shall be assessed and shall pay the surcharge upon execution of the lease.

     (b)  Any state resident who leases from a dealer a new motor vehicle, otherwise subject to a rebate, for a term of one year or more shall qualify for and receive the rebate pursuant to this chapter.

     §   -11  Public information.  (a)  Not later than May 1, 2010, the director shall make available to the public the schedule of rebates and surcharges applicable in the fiscal year following their publication.  The updated schedule shall be made available to the public at the time when it is updated.

     (b)  The director:

     (1)  Shall disseminate information to dealers and consumers about the program;

     (2)  Shall notify licensed dealers about relevant details of the program, including identifying, to the extent feasible, motor vehicles that are exempt from the program, and providing reasonable assistance to help motor vehicle dealers carry out the program; and

     (3)  Shall establish a public education campaign to inform and encourage the public to purchase cleaner motor vehicles.

     (c)  Dealers shall be required to clearly display the amount of the assigned rebate or surcharge for each new motor vehicle available for sale at the dealership, including a description of the limit on the surcharge based on the general excise tax on the purchase price of the motor vehicle pursuant to this chapter.

     §   -12  Exemptions.  (a)  Notwithstanding any other provision of this chapter, a new motor vehicle owner shall be refunded the surcharge that would otherwise be applicable for:

     (1)  Emergency vehicles purchased by any county or county agency;

     (2)  Motor vehicles designed or modified specifically for the purpose of transporting disabled persons;

     (3)  Vans that are purchased for use in public or private fleets to be used primarily for the purpose of vanpools; and

     (4)  Motor vehicles purchased or leased by very low income residents of the State, as defined by the director.

     (b)  Notwithstanding any other provision of this chapter, motor vehicles shall be exempt from this chapter if:

     (1)  The motor vehicle's primary exhaust is identified as a chemical that causes cancer; or

     (2)  The motor vehicle is not subject to a state-mandated inspection and maintenance program.

     (c)  If a motor vehicle is not identified as an exempt vehicle by the director pursuant to this section, but the purchaser of the vehicle believes that the motor vehicle qualifies for an exemption pursuant to this section, the purchaser shall pay the surcharge at the time of sale, and shall submit an application to the department within ninety days after payment of the surcharge to determine whether the vehicle qualifies for the exemption.  The department shall notify the applicant within sixty days of receipt of the application whether an exemption will be granted.  If the director determines that the motor vehicle qualifies for an exemption from the surcharge, the department shall reimburse the applicant for the amount of the surcharge from the account.

     (d)  The department shall prepare and make available to dealers and the public, an application for use by motor vehicle purchasers seeking reimbursement for a surcharge paid for an exempt vehicle.  The application shall provide the opportunity for the purchaser to demonstrate that a vehicle or vehicle purchaser, as applicable, qualifies for an exemption, specify the period of time within which the purchaser must apply for reimbursement, and provide reasonable means for the applicant to challenge the director's finding if it determines that a vehicle does not qualify for an exemption.

     §   -13  Clean vehicle incentive special fund.  There is established in the state treasury the clean vehicle incentive special fund.  All emissions surcharges collected pursuant to this chapter shall be deposited into the special fund.  Moneys in the fund are continuously appropriated without regard to fiscal year and shall be used only for:

     (1)  Clean vehicle rebates;

     (2)  Refunds of emissions surcharges as allowed for in this chapter;

     (3)  Reimbursing the department and the council for the administrative costs incurred pursuant to this chapter; and

     (4)  Reimbursing the department of transportation for costs incurred for each county pursuant to this chapter.

     §   -14  Data collection.  The council may regularly collect from motor vehicle manufacturers adequate data to calculate a vehicle's emissions of greenhouse gases to carry out this chapter.

     §   -15  Alternative fuel vehicles.  The director, in consultation with the council, shall determine a manner to account for vehicles that run on an alternative fuel as defined in section 243-1.  The director shall consider upstream emissions and may develop procedures to allow for a refund of a surcharge if a council-approved after-market alternative fuel conversion device is installed on the vehicle within six months of original purchase.

     §   -16  Reporting.  Not later than January 1, 2013, and every three years thereafter, the director, in consultation with the council, shall provide the legislature with a report that includes:

     (1)  A description of the effectiveness of the program in reducing emissions of greenhouse gases from motor vehicles;

     (2)  An identification of any adjustments made to the schedule of rebates and surcharges and the reasons for the adjustments; and

     (3)  Recommendation of any changes needed to enhance the effectiveness of the program in meeting the goals of the program."

     SECTION 3.  There is appropriated out of the general revenues of the State of Hawaii the sum of $        or so much thereof as may be necessary for fiscal year 2008-2009 for the establishment of the Hawaii clean vehicle incentive program.

     The sum appropriated shall be expended by the department of health for the purposes of this Act.

     SECTION 4.  This Act shall take effect on July 1, 2009.

 

INTRODUCED BY:

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