Report Title:

Food and Energy Security Program Establishment; Gasoline Tax; Alcohol Fuels; Exemption; Repeal; Sunset Clause

 

Description:

Establishes the food security special fund. Establishes the Hawaii economic development task force to address Hawaii's energy and food security needs. Revises the tax collected on each barrel of petroleum product sold by a distributor. Allocates portions of the taxes collected to various funds, including the general fund. Repeals the sunset date of the general excise tax exemption on gross income or proceeds from the sale of alcohol fuels. Effective date 7/1/2020. (SD1)

 


HOUSE OF REPRESENTATIVES

H.B. NO.

1271

TWENTY-FIFTH LEGISLATURE, 2009

H.D. 3

STATE OF HAWAII

S.D. 1

 

 

 

 

 

A BILL FOR AN ACT


 

 

RELATING TO GOVERNMENT.

 

 

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

 


PART I

SECTION 1. The purpose of this Act is to:

(1) Promote economic development for local food and energy businesses by establishing necessary funding, guidance, and infrastructure;

(2) Ensure Hawaii is energy and food self-sufficient and sustainable to the maximum extent feasible; and

(3) Raise general funds during fiscally challenging times.

Hawaii is at a crossroads. As the most geographically isolated state in the country, we are dangerously dependent on imports for basic food and energy needs. We import about eighty-five per cent of our food and ninety-five per cent of our energy. It has been estimated that Hawaii exported $8,600,000,000 for food and oil in 2008, and every dollar exported is a lost opportunity to support and invest in local business. Our dependence on imports also exposes residents and businesses to volatile food and energy costs as oil prices fluctuate.

In addition, the mass consumption of fossil fuels, driven by our dependence on food and energy imports, contributes to global warming and the deterioration of the environment, imposing potentially major but unknown costs and other impacts on Hawaii's people.

Although Hawaii is home to renewable energy resources like solar, wind, ocean, and geothermal, we as a community have not taken advantage of alternative energy and energy efficiency solutions to make our State more energy independent. As an example, despite year-round sunshine, only thirty per cent of Hawaii's residents have solar water heaters.

Similarly, many acres of highly productive agricultural lands are not being farmed. Currently, Hawaii has a fresh supply of produce for no more than ten days. Ninety per cent of the beef, sixty-seven per cent of fresh vegetables, sixty-five per cent of fresh fruits, and seventy per cent of milk consumed in this state are imported. While Hawaii may never produce one hundred per cent of its food, the risks and costs to society by this dependence on imported food cannot be ignored.

Like energy, producing local food would reduce Hawaii's demand for fossil fuels, keep money in our community, and decrease the vulnerability to food supply disruptions caused by natural disasters or worldwide economic events.

Now is the time for bold action to squarely address Hawaii's energy and food requirements. It will require long‑term commitment, dedication, and investment by government, the private sector, and Hawaii's people to dramatically shift our present course of importing food and energy toward a more energy independent and agriculturally sustainable society. As a State and as a people, we must decide whether we will continue to be dependent on external sources for our basic needs, or whether we will build, invest in, and develop the capacity to become food and energy independent.

The legislature finds that it is in the best interests of Hawaii's people to build the capacity we need to become energy and food self-sufficient. As discussed in the Hawaii 2050 Sustainability Plan and Hawaii Clean Energy Initiative, Hawaii has all the necessary assets to significantly improve sustainability and independence over the next twenty years if appropriate personnel resources and sustainable funding are used wisely. To succeed, the State must ensure that our long-term strategy is well-resourced, coordinated, and focused.

This Act creates a Hawaii economic development task force to accelerate and support public and private efforts to make Hawaii energy and food self-sufficient, consistent with the Hawaii 2050 Sustainability Plan, the Hawaii Clean Energy Initiative, and other government and community planning efforts. The Hawaii economic development task force shall set priorities for government agencies, determine how funds shall be allocated, develop an overall road map to achieve the purpose of this Act, and identify the economic development, workforce, and consumer education issues relating to the production of food and energy.

The legislature intends that the Hawaii economic development task force take an interdisciplinary approach to seek the most efficient and effective pathways for interagency coordination. The Hawaii economic development task force shall work collaboratively with all levels of government and the private and nonprofit sectors to address water, land, regulatory, and natural resource issues intertwined with food and fuel production. Such an approach ensures that energy and food policy development is integrated within the overall economic, social, environmental, and cultural aspects of society. With an understanding of these overlapping goals and resources, our State can maximize the opportunities to ensure food and energy security for generations to come.

The legislature finds that undertaking this important task of energy and food security requires substantial financial resources. An investment and long-term commitment by the State must be made. To that end, this Act also increases the per-barrel tax on petroleum products under the environmental response, energy, and food security tax, formerly known as the environmental response tax.

PART II

SECTION 2. Chapter 141, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"141‑   Food security special fund; establishment. (a) There is established within the state treasury the food security special fund.

(b) The following shall be deposited into the special fund:

(1) The portion of the environmental response, energy, and food security tax specified under section 243-3.5;

(2) Any appropriation by the legislature into the special fund;

(3) Any grant or donation made to the special fund; and

(4) Any interest earned on the balance of the special fund.

(c) Subject to legislative appropriation, moneys in the special fund may be expended by the department of agriculture for the following:

(1) The awarding of grants to farmers for agricultural production or processing activity;

(2) The acquisition of real property for agricultural production or processing activity;

(3) The improvement of real property, irrigation systems, and transportation networks necessary to promote agricultural production or processing activity;

(4) The purchase of equipment necessary for agricultural production or processing activity;

(5) The conduct of research on and testing of agricultural products and markets;

(6) The promotion and marketing of agricultural products grown or raised in the state; and

(7) Any other activity intended to increase agricultural production or processing that may lead to reduced importation of food, fodder, or feed from outside the state."

SECTION 3. Section 128D-2, Hawaii Revised Statutes, is amended to read as follows:

"128D-2 Environmental response revolving fund; uses. (a) There is created within the state treasury an environmental response revolving fund, which shall consist of moneys appropriated to the fund by the legislature, moneys paid to the fund as a result of departmental compliance proceedings, moneys paid to the fund pursuant to court-ordered awards or judgments, moneys paid to the fund in court-approved or out-of-court settlements, all interest attributable to investment of money deposited in the fund, moneys [generated by] deposited in the fund from the environmental response, energy, and food security tax [established in] pursuant to section 243-3.5, and moneys allotted to the fund from other sources[; provided that when the total balance of the fund exceeds $20,000,000, the department of health shall notify the department of taxation of this fact in writing within ten days. The department of taxation then shall notify all distributors liable for collecting the tax imposed by section 243-3.5 of this fact in writing, and the imposition of the tax shall be discontinued beginning the first day of the second month following the month in which notice is given to the department of taxation. If the total balance of the fund thereafter declines to less than $3,000,000, the department of health shall notify the department of taxation which then shall notify all distributors liable for collecting the tax imposed by section 243-3.5 of this fact in writing, and the imposition of the tax shall be reinstated beginning the first day of the second month following the month in which notice is given to the department of taxation].

(b) Moneys from the fund shall be expended by the department for response actions and preparedness, including removal and remedial actions, consistent with this chapter; provided that the revenues generated by the ["environmental response tax" and] environmental response, energy, and food security tax deposited into the environmental response revolving fund:

(1) Shall [also] be used:

(A) For oil spill planning, prevention, preparedness, education, research, training, removal, and remediation; and

(B) For direct support for county used oil recycling programs; and

[(C) For deposit into the energy security special fund, established under section 201-12.8, as may be appropriated by the legislature; and]

(2) May also be used to support environmental protection and natural resource protection programs, including but not limited to energy conservation and alternative energy development, and to address concerns related to air quality, global warming, clean water, polluted runoff, solid and hazardous waste, drinking water, and underground storage tanks, including support for the underground storage tank program of the department and funding for the acquisition by the State of a soil remediation site and facility."

SECTION 4. Section 243-3.5, Hawaii Revised Statutes, is amended as follows:

1. By amending its title and subsection (a) to read:

"243-3.5 Environmental response, energy, and food security tax; uses. (a) In addition to any other taxes provided by law, subject to the exemptions set forth in section 243-7, there is hereby imposed [at times provided in section 128D-2] a state environmental response, energy, and food security tax of [5 cents] $       on each barrel or fractional part of a barrel of petroleum product sold by a distributor to any retail dealer or end user, other than a refiner, of petroleum product; provided that:

(1)       cents of the tax on each barrel shall be [used pursuant to section 128D-2 to address concerns relating to drinking water.] deposited into the environmental response revolving fund established under section 128D-2;

(2)       cents of the tax on each barrel shall be deposited into the energy security special fund established under section 201-12.8;

(3)       cents of the tax on each barrel shall be deposited into the energy systems development special fund established under section 304A-2169;

(4)       cents of the tax on each barrel shall be deposited into the food security special fund established under section 141-  ; and

(5)       cents of the tax on each barrel shall be deposited into the general fund.

The tax imposed by this subsection shall be paid by the distributor of the petroleum product."

2. By amending subsection (c) to read:

"(c) Notwithstanding section 248-8 to the contrary, the environmental response, energy, and food security tax collected under this section shall be paid over to the director of finance for deposit [into the environmental response revolving fund established by section 128D-2.] as provided in subsection (a)."

PART III

SECTION 5. (a) There is established the Hawaii economic development task force within the department of business, economic development, and tourism for administrative purposes. The purpose of the Hawaii economic development task force shall be to facilitate the accelerated adoption and completion of renewable energy projects, energy efficiency programs, agricultural infrastructure and development, and other measures to meet the purposes of this Act. The Hawaii economic development task force shall develop and maintain a broad overview of energy and food security issues that apply an interdisciplinary approach to ensure that Hawaii's energy and food policy and program development is integrated within the overall economic, social, environmental, and cultural aspects of society. The Hawaii economic development task force shall:

(1) Identify and review each state and county agency's policy objectives, mandates, organizational structure, and resources to address energy and food security issues;

(2) Identify all federal and private funds available to the State and counties to address energy and food security issues;

(3) Identify effective measures for interagency cooperation, coordinate efforts with the counties, and bolster public and private sector partnerships to achieve the objective of energy and food security;

(4) Identify existing programs and agreements addressing energy and food security that may be enhanced through legislation;

(5) Investigate alternative institutional mechanisms to promote the efficient execution and implementation of a multi-year strategy to achieve energy and food security;

(6) Investigate the streamlining of administrative processes to accelerate and achieve energy and food security;

(7) Provide an appropriate forum for all affected or interested parties to address energy and food security issues;

(8) Recommend appropriate legislation resulting from its findings to improve, accelerate, and achieve the objective of energy and food security;

(9) Review whether:

(A) The apportionment of the environmental response, energy, and food security tax among the funds listed under section 243-3.5, Hawaii Revised Statutes, is appropriate;

(B) The apportionment should be changed; and

(C) Any additional special, trust, or revolving fund should receive a share of the tax;

and

(10) Perform any other function necessary to effectuate the purposes of this part.

(b) The Hawaii economic development task force shall consist of the following members:

(1) The director of business, economic development, and tourism or the director's designee;

(2) The chairperson of the board of agriculture or the chairperson's designee;

(3) The director of the office of planning or the director's designee;

(4) The chairperson of the board of land and natural resources or the chairperson's designee;

(5) The dean of the University of Hawaii college of tropical agriculture and human resources or the dean's designee;

(6) The speaker of the house of representatives or the speaker's designee;

(7) The president of the senate or the president's designee; and

(8) A representative from each county economic development board.

(c) The Hawaii economic development task force's members shall serve without compensation but shall be reimbursed for expenses, including travel expenses, necessary for the performance of their duties.

(d) In the performance of its duties, the Hawaii economic development task force shall consult with appropriate private, nonprofit, community, and government stakeholders.

(e) The department of business, economic development, and tourism may contract with the University of Hawaii for any services to support the work of the Hawaii economic development task force.

(f) The Hawaii economic development task force shall submit a report of its findings and recommendations, including any proposed legislation, to the legislature no later than twenty days prior to the convening of the regular session of 2010.

The task force also shall submit a follow-up report to the legislature no later than twenty days prior to the convening of the regular session of 2011. The report shall include a description of the activities funded by the environmental response, energy, and food security tax, progress made toward energy and food self-sufficiency, and additional action necessary to achieve energy and food self-sufficiency.

(g) The Hawaii economic development task force shall cease to exist on June 30, 2011.

SECTION 6. 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 2009-2010 and the same sum or so much thereof as may be necessary for fiscal year 2010-2011 for the purpose of supporting the work of the Hawaii economic development task force. The appropriation shall be made from the portion of the environmental response, energy, and food security tax that is deposited into the general fund.

The sum appropriated shall be expended by the department of business, economic development, and tourism for the purposes of this part.

PART IV

SECTION 7. Act 209, Session Laws of Hawaii 2007, is amended by amending section 6 to read as follows:

"SECTION 6. This Act shall take effect on July 1, 2007[; provided that section 2 of this Act shall be repealed on June 30, 2009]."

PART V

SECTION 8. This Act does not affect rights and duties that matured, penalties that were incurred, and proceedings that were begun, before its effective date.

SECTION 9. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 10. This Act shall take effect on July 1, 2020.