STAND. COM. REP. NO. 85

 

Honolulu, Hawaii

                  

 

RE:    S.B. No. 1703

       S.D. 1

 

 

 

Honorable Colleen Hanabusa

President of the Senate

Twenty-Fourth State Legislature

Regular Session of 2007

State of Hawaii

 

Madam:

 

     Your Committee on Energy and Environment, to which was referred S.B. No. 1703 entitled:

 

"A BILL FOR AN ACT RELATING TO ENERGY,"

 

begs leave to report as follows:

 

     The purpose of this measure is to reduce Hawaii's dependency on imported petroleum.

 

     The measure attempts to accomplish this purpose by:

 

     (1)  Levying an additional one per cent general excise tax on the gross proceeds of the sale of passenger cars and light duty trucks weighing more than five thousand pounds curb weight;

 

     (2)  Establishing a Clean Fuel Revolving Fund into which the additional one per cent tax will be deposited to provide rebates to individuals who purchase qualified alternative fuel vehicles or hybrid vehicles in Hawaii; and

 

     (3)  Providing a general excise tax exemption for amounts received from the sale of qualified alternative fuel vehicles and hybrid vehicles.

 

     Your Committee received testimony in support of this measure from the Sierra Club, Hawaii Chapter.  Your Committee received testimony in opposition to this measure from the Alliance of Automobile Manufacturers.  The Department of Taxation submitted testimony in opposition to part of this measure.  The Department of the Attorney General submitted recommendations for this measure.  The Department of Business, Economic Development, and Tourism, Hawaii Automobile Dealers Association, and the Tax Foundation submitted comments on this measure.

 

     Your Committee finds that encouraging the purchase of fuel efficient and alternative fuel vehicles is crucial to Hawaii's energy and economic security.  Your Committee further finds that the "feebate" program established in this bill may be an effective method of accomplishing this goal with a reduced fiscal impact to the State.  However, significant concerns were raised by several testifiers including the impact this measure will have on trucks used for agricultural purposes and work duty.

 

     Your Committee received a fiscal impact statement from the Department of Taxation indicating that the additional general excise tax on certain passenger cars and trucks does not have any revenue impact.  However, this general excise tax would collect an additional $6.8 million which would then be allocated to the Clean Fuel Revolving Fund.

 

     Your Committee amended this measure by changing the effective date to encourage further discussion and to enable subsequent committees to address concerns about this bill.

 

     As affirmed by the record of votes of the members of your Committee on Energy and Environment that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 1703, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 1703, S.D. 1, and be referred to the Committee on Economic Development and Taxation.

 

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

 

 

 

____________________________

RON MENOR, Chair