HB2521 HSCR32-04

 

STAND. COM. REP. NO. 32-04

Honolulu, Hawaii

, 2004

RE: H.B. No. 2521

 

 

 

Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-Second State Legislature

Regular Session of 2004

State of Hawaii

Sir:

Your Committee on Energy and Environmental Protection, to which was referred H.B. No. 2521 entitled:

"A BILL FOR AN ACT RELATING TO TAXATION OF ALTERNATIVE FUELS,"

begs leave to report as follows:

The purpose of this bill is to suspend the State's portion of the fuel tax on alternative fuels for a period of five years to encourage the development and use of alternative fuels.

The Department of Transportation, Department of Business, Economic Development, and Tourism, the City Energy Coordinator of the City and County of Honolulu, and the Gas Company testified in support of this bill. The Department of Taxation and Tax Foundation of Hawaii commented on this measure.

The production and use of alternative fuels should be encouraged for social and economic benefits to the State, in part because Hawaii is vulnerable to disruptions in oil supply and a significant portion of motor fuel expenditures (an estimated $679 million in 1995) leaves the State. Locally produced alternative fuels contribute to the growth of the State's economy, since monies spent on alternative fuels would remain in the State. Diversification of Hawaii's energy supply has long been an important part of the State's energy policy. Furthermore, the use of alternative fuels also helps protect the environment and promote public health by lowering emissions that gasoline and diesel produce. Your Committee has learned that state taxes collected from alternative fuels (all from biodiesel) for the year 2003 totaled $22,482. The Department of Taxation testified that the maximum revenue loss as a result of a moratorium on the alternative fuel tax for the calendar year 2004 would be less than $50,000.

As affirmed by the record of votes of the members of your Committee on Energy and Environmental Protection that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 2521 and recommends that it pass Second Reading and be referred to the Committee on Transportation.

 

Respectfully submitted on behalf of the members of the Committee on Energy and Environmental Protection,

 

		____________________________ HERMINA M. MORITA, Chair