HB1888

SECTION 1. Hawaii depends on imported petroleum for over ninety per cent of its transportation energy needs, leaving the State extremely vulnerable to an oil embargo, supply disruption or other energy emergency. Hawaii's energy security can be increased by diversifying Hawaii's transportation fuel needs so that the State will be more reliant on alternative fuels and efficient vehicles.

The legislature finds that imposing an additional tax on vehicles that weigh more, and proportionally consume more petroleum fuel, will benefit all citizens of Hawaii and address energy security problems that will adversely affect the State.

The purpose of this Act, among other things, is to:

(1) Impose a one per cent tax on the sale of passenger cars and light-duty trucks weighing more than five thousand pounds curb weight;

(2) Allocate the additional tax revenue received into a clean fuel fund that will be made available as a rebate on qualified alternative fuel vehicles and hybrid vehicles purchased in the State;

(3) Require the state director of finance to develop and implement a plan to distribute the clean fuel fund by December 31, 2008; and

(4) Exempts certain qualified vehicles from the tax.

SECTION 2. Chapter 239, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read follows:

"§239- Clean fuel. (a) In addition to the tax levied in section 239-13(2)(A), there shall be an additional tax levied on the gross proceeds of sales of passenger cars and light-duty trucks; provided that insofar as the sale of tangible personal property is a wholesale sale under section 237-4(a)(8)(B), the sale shall be subject to section 237-13.3.

Upon every sale of a passenger car or light-duty truck weighing over five thousand pounds curb weight there is likewise hereby levied, in addition to the tax levied in section 239‑13(2)(A), a tax equivalent to one per cent of the gross proceeds of sales of the passenger car or light-duty truck.

Vehicles weighing over five thousand pounds curb weight that do not satisfy the qualified alternative fuel vehicle requirement, but are capable of operating on an alternative fuel, will not be subject to the additional general excise tax.

(b) The tax levied in subsection (a) that is in addition to the tax levied in section 239-13(2)(A) shall be collected and deposited into the clean fuel fund that is established to provide a rebate on the purchase, within the State, of a qualified alternative fuel vehicle or hybrid vehicle. The director of finance is authorized and shall develop and implement a plan to distribute the clean fuel fund by December 31, 2008.

The clean fuel fund will expire when there are no funds available for rebates from the additional tax levied on passenger cars and light-duty trucks that weigh over five thousand pounds. The rebate on qualified alternative fuel vehicles and hybrid vehicles will concurrently expire when the clean fuel fund expires.

Any additional revenue that is generated from the additional tax levied on passenger cars and light-duty trucks after the clean fuel fund has expired will be allocated to the general fund.

"Alternative fuel" shall have the same meaning as that term in defined under section 243-1.

"Hybrid vehicle" is a vehicle that draws its power for driving the vehicle from both an internal combustion engine or heat engine using combustible fuel and a rechargeable energy storage system.

"Passenger car" shall have the same meaning as that term is defined under section 286-2.

"Pickup truck" shall have the same meaning as that term is defined under 40 CFR 86.1803-01.

"Qualified alternative fuel vehicle" means a vehicle that:

(1) Weighs less than ten thousand pounds curb weight, that operates on an alternative fuel; and

(2) For light-duty trucks, when operating on an alternative fuel, obtains seventeen miles per gallon; or

(3) For passenger cars, when operating on an alternative fuel, obtains twenty-two miles per gallon.

"Vehicle" means a new passenger car or light-duty truck purchased in the State."

SECTION 3. Section 237-24, Hawaii Revised Statutes, is amended to read as follows:

"§237-24 Amounts not taxable. This chapter shall not apply to the following amounts:

(1) Amounts received under life insurance policies and contracts paid by reason of the death of the insured;

(2) Amounts received (other than amounts paid by reason of death of the insured) under life insurance, endowment, or annuity contracts, either during the term or at maturity or upon surrender of the contract;

(3) Amounts received under any accident insurance or health insurance policy or contract or under workers' compensation acts or employers' liability acts, as compensation for personal injuries, death, or sickness, including also the amount of any damages or other compensation received, whether as a result of action or by private agreement between the parties on account of the personal injuries, death, or sickness;

(4) The value of all property of every kind and sort acquired by gift, bequest, or devise, and the value of all property acquired by descent or inheritance;

(5) Amounts received by any person as compensatory damages for any tort injury to the person, or to the person's character reputation, or received as compensatory damages for any tort injury to or destruction of property, whether as the result of action or by private agreement between the parties [(]; provided that amounts received as punitive damages for tort injury or breach of contract injury shall be included in gross income[)];

(6) Amounts received as salaries or wages for services rendered by an employee to an employer;

(7) Amounts received as alimony and other similar payments and settlements;

(8) Amounts collected by distributors as fuel taxes on "liquid fuel" imposed by chapter 243, and the amounts collected by such distributors as a fuel tax imposed by any Act of the Congress of the United States;

(9) Taxes on liquor imposed by chapter 244D on dealers holding permits under that chapter;

(10) The amounts of taxes on cigarettes and tobacco products imposed by chapter 245 on wholesalers or dealers holding licenses under that chapter and selling the products at wholesale;

(11) Federal excise taxes imposed on articles sold at retail and collected from the purchasers thereof and paid to the federal government by the retailer;

(12) The amounts of federal taxes under chapter 37 of the Internal Revenue Code, or similar federal taxes, imposed on sugar manufactured in the State, paid by the manufacturer to the federal government;

(13) An amount up to, but not in excess of, $2,000 a year of gross income received by any blind, deaf, or totally disabled person engaging, or continuing, in any business, trade, activity, occupation, or calling within the State; a corporation all of whose outstanding shares are owned by an individual or individuals who are blind, deaf, or totally disabled; a general, limited, or limited liability partnership, all of whose partners are blind, deaf, or totally disabled; or a limited liability company, all of whose members are blind, deaf, or totally disabled;

(14) Amounts received by a producer of sugarcane from the manufacturer to whom the producer sells the sugarcane, where:

(A) The producer is an independent cane farmer, so classed by the Secretary of Agriculture under the Sugar Act of 1948 (61 Stat. 922, Chapter 519) as the Act may be amended or supplemented;

(B) The value or gross proceeds of sale of the sugar, and other products manufactured from the sugarcane, is included in the measure of the tax levied on the manufacturer under section 237‑13(1) or (2);

(C) The producer's gross proceeds of sales are dependent upon the actual value of the products manufactured therefrom or the average value of all similar products manufactured by the manufacturer; and

(D) The producer's gross proceeds of sales are reduced by reason of the tax on the value or sale of the manufactured products;

(15) Money paid by the State or eleemosynary child-placing organizations to foster parents for their care of children in foster homes; [~~and~~]

(16) Amounts received by a cooperative housing corporation from its shareholders in reimbursement of funds paid by such corporation for lease rental, real property taxes, and other expenses of operating and maintaining the cooperative land and improvements; provided that such a cooperative corporation is a corporation:

(A) Having one and only one class of stock outstanding;

(B) Each of the stockholders of which is entitled solely by reason of the stockholder's ownership of stock in the corporation, to occupy for dwelling purposes a house, or an apartment in a building owned or leased by the corporation; and

(C) No stockholder of which is entitled (either conditionally or unconditionally) to receive any distribution not out of earnings and profits of the corporation except in a complete or partial liquidation of the corporation[.]; and

(17) Amounts received from the sale of a vehicle that is a qualified alternative fuel vehicle or hybrid vehicle as defined in section 239- , and is registered to a business in the State or is an emergency or police vehicle; provided that:

(A) The exemption shall not apply to the purchase of a qualified alternative fuel vehicle or hybrid vehicle if there is another credit available under this chapter for which the vehicle qualifies; and

(B) A taxpayer may, in connection with the purchase of a qualified alternative fuel vehicle or hybrid vehicle, transfer any credit allowable to any person who is in the trade or business of selling new qualified alternative fuel vehicles or hybrid vehicles, but only if such person clearly discloses to such taxpayer the amount of any credit allowable with respect to such vehicle."

SECTION 4. In codifying the new sections added by section 2 of this Act, the revisor of statutes shall substitute appropriate section numbers for the letters used in designating the new sections in this Act.

SECTION 5. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 6. This Act shall take effect upon its approval.

INTRODUCED BY:	_____________________________

HOUSE OF REPRESENTATIVES	H.B. NO.	1888
TWENTY-FOURTH LEGISLATURE, 2007
STATE OF HAWAII