SB1703 SD1

SECTION 1. The legislature finds that Hawaii is dependent on imported petroleum for over ninety per cent of its transportation energy needs. This dependency on imported oil leaves the State extremely vulnerable to a foreign oil embargo, a disruption in supply, or other types of energy emergencies. Hawaii's energy security can be increased by diversifying its transportation fuel requirements so that the State will be more reliant on alternative fuels and efficient vehicles. Imposing an additional tax on motor vehicles that weigh more and proportionately consume more petroleum fuel will assist in addressing the State's energy security problems.

The purpose of this Act is to:

(1) Levy 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) Establish 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) Provide a general excise tax exemption for amounts received from the sale of qualified alternative fuel vehicles and hybrid vehicles.

SECTION 2. Chapter 36, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"§36- Clean fuel revolving fund. (a) There is established in the state treasury the clean fuel revolving fund, into which shall be deposited:

(1) All revenues received from the collection of taxes levied under section 237- ; and

(2) Appropriations made by the legislature to the fund.

(b) The revolving fund shall be used to provide a rebate to a buyer who purchases a qualified alternative fuel vehicle or hybrid vehicle, as defined under section 237- , in the State.

(c) The fund shall be repealed when there is no longer any funding available for rebates from the additional tax levied under section 237- . The rebate on qualified alternative fuel vehicles and hybrid vehicles shall be repealed when the fund is repealed. Any additional revenue that is collected from the additional tax levied under section 237- after the fund has been repealed shall be transferred to the general fund.

(d) The director of finance shall develop and implement a plan to distribute rebates from the fund by December 31, 2008. The department shall adopt rules in accordance with chapter 91 to carry out the purposes of this section."

SECTION 3. Chapter 237, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"§237- Sale of passenger cars and light-duty trucks. (a) In addition to the tax levied under section 237-13(2)(A) and other sections of this chapter, 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 not be subject to this section. Upon every sale of a passenger car or light duty truck weighing over five thousand pounds curb weight, there shall be assessed, levied, and collected a tax equivalent to one per cent of the gross proceeds of sales of passenger cars and light duty trucks.

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

(b) For purposes of this section:

"Alternative fuel" means the same as defined under section 243-1.

"Hybrid vehicle" means any motor vehicle that draws its power from an internal combustion or heat engine using combustible fuel and a rechargeable energy storage system.

"Light duty truck" means any motor vehicle with a curb weight of five thousand pounds or less and which has a basic vehicle frontal area of forty-five square feet or less, which is:

(1) Designed primarily for purposes of transportation of property or is a derivation of such a vehicle;

(2) Designed primarily for transportation of persons and has a capacity of more than twelve persons; or

(3) Available with special features enabling off-street or off-highway operation and use.

"Passenger car" means the same as defined under section 286-2.

"Qualified alternative fueled vehicle" means a motor vehicle that weighs less than ten thousand pounds curb weight, and:

(1) Obtains seventeen miles per gallon when operating on alternative fuel, for light duty trucks; or

(2) Obtains twenty-two miles per gallon when operating on alternative fuel, for passenger cars.

"Vehicle" means a new passenger car of light duty truck purchased in Hawaii."

SECTION 4. Section 237-24.75, Hawaii Revised Statutes, is amended to read as follows:

"[[]§237-24.75[]] Additional exemptions. In addition to the amounts exempt under section 237-24, this chapter shall not apply to [~~amounts~~]:

(1) Amounts received as a beverage container deposit collected under chapter 342G, part VIII[.]; and

(2) Amounts received from the sale of qualified alternative fuel vehicles or hybrid vehicles, as defined under section 237- , in the State."

SECTION 5. Section 237-31, Hawaii Revised Statutes, is amended to read as follows:

"§237‑31 Remittances. All remittances of taxes imposed by this chapter shall be made by money, bank draft, check, cashier's check, money order, or certificate of deposit to the office of the department of taxation to which the return was transmitted. The department shall issue its receipts therefor to the taxpayer and shall pay the moneys into the state treasury as a state realization, to be kept and accounted for as provided by law; provided that:

(1) The sum from all general excise tax revenues realized by the State that represents the difference between $90,000,000 and the proceeds from the sale of any general obligation bonds authorized for that fiscal year for the purposes of the state educational facilities improvement special fund shall be deposited in the state treasury in each fiscal year to the credit of the state educational facilities improvement special fund for public school capital improvement program needs; [~~and~~]

(2) A sum, not to exceed $5,000,000, from all general excise tax revenues realized by the State shall be deposited in the state treasury in each fiscal year to the credit of the compound interest bond reserve fund[.]; and

(3) A sum from all general excise tax revenues realized by the State under section 237- shall be deposited in the state treasury in each fiscal year to the clean fuel revolving fund for rebates to buyers for purchases of qualified alternative fuel vehicles and hybrid vehicles."

SECTION 6. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 7. Amendments made to section 237-31, Hawaii Revised Statutes in section 5 of this Act shall not be repealed in accordance with section 4, Act 304, Session Laws of Hawaii 2006.

SECTION 8. This Act shall take effect on July 1, 2020; provided that sections 3, 4, and 5 shall take effect on January 1, 2009, and shall apply to gross income and gross proceeds received after December 31, 2008.

THE SENATE	S.B. NO.	1703
TWENTY-FOURTH LEGISLATURE, 2007		S.D. 1
STATE OF HAWAII