STAND. COM. REP. 991

Honolulu, Hawaii

, 2003

RE: S.B. No. 1239

S.D. 1

H.D. 1

 

 

 

Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-Second State Legislature

Regular Session of 2003

State of Hawaii

Sir:

Your Committees on Energy and Environmental Protection and Transportation, to which was referred S.B. No. 1239, S.D. 1, entitled:

"A BILL FOR AN ACT RELATING TO ENERGY,"

beg leave to report as follows:

The purpose of this bill is to encourage the use of biodiesel fuel as an important source of renewable energy. This bill:

(1) Establishes the Biodiesel Fuel Revolving Fund to enable the State to purchase biodiesel fuel for use in government motor vehicles;

(2) Encourages the use of biodiesel in the marine industry by:

(a) Allowing the delivery of biodiesel fuel to all harbors; and

(b) Allowing the installation of biodiesel fuel pumps to all state harbors;

(3) Exempting biodiesel fuel from the fuel tax law; and

(4) Prohibiting the disposal of grease or grease traps in any landfill.

Pacific Biodiesel, Inc., testified in support of this measure. The Department of the Attorney General, Department of Taxation (DOTAX), Department of Budget and Finance, and Tax Foundation of Hawaii offered comments. The Department of Health and the Department of Accounting and General Services opposed this bill.

Your Committees have amended this bill by:

(1) Deleting the prohibition on disposing grease or grease traps in landfills. The inclusion of this provision violates the subject-title requirement of Article III, section 14 of the State Constitution;

(2) Deleting the Biodiesel Fuel Revolving Fund due to uncertainty over the availability and application of alternative fuel vehicle acquisition credits;

(3) Deleting the exemption of biodiesel fuel from the fuel tax law and inserting provisions from H.B. No. 1539, H.D. 1, which reduces the fuel taxes for ethanol, methanol, biodiesel, and other alternative fuels, except for liquefied petroleum gas. As stated earlier in House Standing Committee Report No. 94, the tax loss to the Department of Transportation's Highway Fund should be minimal. DOTAX testified that the expected loss of revenue would be approximately $435 and not $23,104 as had been earlier estimated;

(4) Establishing a preference in public contracts for the use of biofuels which shall be equal to the per gallon fuel tax rates for alternative fuels. These provisions were taken from H.B. No. 1405, H.D. 1; and

(5) Making technical, nonsubstantive amendments for purposes of consistency and clarity.

As affirmed by the records of votes of the members of your Committees on Energy and Environmental Protection and Transportation that are attached to this report, your Committees are in accord with the intent and purpose of S.B. No. 1239, S.D. 1, as amended herein, and recommend that it pass Second Reading in the form attached hereto as S.B. No. 1239, S.D. 1, H.D. 1, and be referred to the Committee on Judiciary.

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

 

____________________________

JOSEPH M. SOUKI, Chair

____________________________

HERMINA M. MORITA, Chair