THE SENATE

S.C.R. NO.

84

TWENTY-FIRST LEGISLATURE, 2002

 

STATE OF HAWAII

 
   


SENATE CONCURRENT

RESOLUTION

 

requesting the Auditor to audit the Department of Business, Economic Development, and Tourism's use of petroleum violation escrow funds.

 

WHEREAS, beginning in 1983, additional funds became available to the states as a result of alleged oil company violations of the federal oil pricing controls in place from 1973 to 1981. These funds are known as petroleum violation escrow funds or oil-overcharge funds; and

WHEREAS, petroleum violation escrow funds must be used to provide indirect restitution to energy consumers through a variety of energy-related programs. Each state determines how it wishes to allocate the funds across eligible programs. The states may use these funds and the interest earned on them to finance State Energy Program activities; and

WHEREAS, the U.S. Department of Energy's State Energy Program provides funding to states to design and carry out their own energy efficiency and renewable energy programs. The results from this program are directly linked to a large number of diverse and innovative projects in local communities across the United States and its territories. The outcome of this U.S. Department of Energy funding is a rapid and inventive deployment of new energy efficiency and renewable energy technologies; and

WHEREAS, the State Energy Program originated as the State Energy Conservation Program during the energy crisis of the early 1970s. Events during that period increased the nation's awareness of its dependence on foreign oil and of the need to lessen this dependence. Congress responded with legislation that established a broad range of conservation programs, provided support for the development of new and more efficient sources of energy, and established the U.S. Department of Energy to lead and administer the effort; and

WHEREAS, in 1983, the State Energy Conservation Program experienced further growth when it was allocated funds under the Warner Amendment (P.L. 95-105). These new moneys came from refunds collected by the federal government from oil companies that had overcharged for petroleum and petroleum products. Passed on to the states as petroleum violation escrow funds, the new moneys stimulated the states to expand programs and create new ones to get consumers to develop more efficient energy habits. As a result, state and federal program officials began to collaborate in designing and implementing energy conservation programs; and

WHEREAS, the State Energy Program is subject to regulations regarding the types of projects that can be done. Some projects are prohibited, depending on the source of funds. Other regulations limit the amount of money that can be spent to administer the programs. States are prohibited from using State Energy Program financial assistance to:

(1) Build mass-transit systems or exclusive bus lanes, or for the construction or repair of buildings or structures;

(2) Purchase land, buildings, or structures, or any interest therein;

(3) Subsidize fares for public transportation;

(4) Subsidize utility rate demonstrations or state tax credits for energy conservation or renewable energy measures; and

(5) Conduct, or purchase equipment to conduct research, development, or demonstration of energy efficiency or renewable energy techniques and technologies not commercially available. However, demonstrations of commercially available energy efficiency or renewable energy techniques and technologies are permitted;

and

WHEREAS, petroleum violation escrow funds allocated to the State Energy Program are treated as appropriated funds and are subject to program requirements. They are not, however, subject to the cost-sharing requirement or the twenty per cent limitation on equipment purchases under the State Energy Program; and

WHEREAS, it has been alleged by a concerned citizen that the Department of Business, Economic Development, and Tourism's Energy, Resources, and Technology Division is misusing petroleum violation escrow funds and, consequently, violating its federal grant application by paying personnel costs to staff the Strategic Technology Industry Development Branch; and

WHEREAS, the primary mission of the Strategic Technology Industry Development Branch is to improve and diversify Hawaii's economy by developing technology areas such as telecommunications, energy technologies, environmental control and management, telemedicine, and other areas with potential for development within Hawaii and export to the growth areas of the Asia-Pacific region; now, therefore,

BE IT RESOLVED by the Senate of the Twenty-first Legislature of the State of Hawaii, Regular Session of 2002, the House of Representatives concurring, that the Auditor is requested to audit the Department of Business, Economic Development, and Tourism's use of petroleum violation escrow funds; and

BE IT FURTHER RESOLVED that the Auditor is requested to submit its findings and recommendations to the Legislature not less than twenty days prior to the convening of the Regular Session of 2003; and

BE IT FURTHER RESOLVED that certified copies of this Concurrent Resolution be transmitted to the Auditor; the Secretary of Energy; the Governor; and the Director of Business, Economic Development, and Tourism.

 

 

 

OFFERED BY:

_____________________________

Report Title:

Petroleum Violation Escrow Funds; DBEDT; Audit