STAND. COM. REP. NO. 392

Honolulu, Hawaii

, 2019

RE: H.B. No. 1467

H.D. 1

Honorable Scott K. Saiki

Speaker, House of Representatives

Thirtieth State Legislature

Regular Session of 2019

State of Hawaii

Sir:

Your Committee on Consumer Protection & Commerce, to which was referred H.B. No. 1467 entitled:

"A BILL FOR AN ACT RELATING TO MOTOR VEHICLES,"

begs leave to report as follows:

The purpose of this measure is to:

(1) Change the assessment of the state fuel tax to the greater of a specified amount per gallon or an unspecified percentage of the wholesale price per gallon to the retailer, subject to a minimum monetary amount of tax based on the tax paid by certain retailers; and

(2) Subject biodiesel oil to the same state fuel tax rates and reporting requirements as diesel oil.

The Department of Transportation and an individual testified in support of this measure. Aloha Petroleum, Ltd., GP Energy Company LLC, Honolulu County Republican Party, Pacific Biodiesel, Pacific Biodiesel Technologies, Blue Planet Foundation, and Hawaii Petroleum Marketers Association testified in opposition. The Department of Taxation, Department of Land and Natural Resources, Department of the Attorney General, and Tax Foundation of Hawaii provided comments.

Upon careful consideration, your Committee has amended this measure by:

(1) Clarifying that if the state fuel tax based on the percentage of the wholesale price is applied, a wholesaler cannot pass on to a retailer any amount of the tax per gallon greater than the amount of tax per gallon that the wholesaler paid on the highest price per gallon sold by the wholesaler to any retailer during the taxable year;

(2) Clarifying that biodiesel should not be classified as an alternative fuel; and

(3) Changing the effective date to July 1, 2050, to facilitate further discussion.

In the event that the Committee on Finance considers this measure, your Committee respectfully requests that the Committee on Finance examine increasing the allocated portion of the state fuel tax designated for the Na Ala Hele Hawaii Statewide Trail and Access Program.

As affirmed by the record of votes of the members of your Committee on Consumer Protection & Commerce that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 1467, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 1467, H.D. 1, and be referred to your Committee on Finance.

Respectfully submitted on behalf of the members of the Committee on Consumer Protection & Commerce,

____________________________

ROY M. TAKUMI, Chair