Bill Text: HI HB1459 | 2019 | Regular Session | Introduced
Bill Title: Relating To Taxation.
Spectrum: Partisan Bill (Democrat 13-0)
Status: (Introduced - Dead) 2019-01-28 - Referred to EEP, FIN, referral sheet 6 [HB1459 Detail]
Download: Hawaii-2019-HB1459-Introduced.html
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HOUSE OF REPRESENTATIVES |
H.B. NO. |
1459 |
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THIRTIETH LEGISLATURE, 2019 |
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STATE OF HAWAII |
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A BILL FOR AN ACT
RELATING TO TAXATION
BE IT
ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
SECTION 1. The legislature finds that climate change is the most pressing issue of our time. Transportation-generated greenhouse gas emissions are a significant contributor to climate change. The state climate change commission has stated that the most effective single means of reducing greenhouse gas emissions is to "put a price on carbon". The concept of "carbon pricing" is supported by various local and state entities and, as of the end of 2018, fifty-one carbon pricing initiatives have been implemented or scheduled for implementation worldwide.
The legislature further finds that the best means of carbon pricing for the State is a use-based tax on all carbon dioxide-emitting fuels, such as oil, gas, and coal. The department of taxation already implements various fuel-based taxes, and a state carbon emissions tax can be implemented by amending the environmental response, energy, and food security tax and repealing the state fuel tax. A carbon emissions tax could be assessed and collected for each fuel based on the carbon dioxide-emitting content of that fuel.
According to the department of taxation, the total tax collected from fuel-based taxes in fiscal year 2017-2018 was $201.8 million. Of this, $83.5 million was distributed to the state highway fund and $86.9 million to the counties' highway funds. Another $27 million was distributed to the environmental response funds, $1.7 million to the state boating fund, and $2.6 million to the airport fund. On the consumption side, the largest amount of taxable fuel consumed was gasoline, at 466.0 million gallons, and the next largest amount was aviation fuel, at 263.2 million gallons, which together accounted for 79.2 per cent of the total amount of taxable fuel consumed in the last fiscal year.
To maintain the same level of state revenue - essentially, to be revenue neutral - $114.8 million needs to be generated from a tax based on carbon dioxide emissions. Carbon emissions taxes are usually calculated as a value per ton of carbon dioxide equivalent emissions. Here, a tax of $6.25 per ton of carbon dioxide equivalent emissions will be needed to maintain the current level of revenue. This tax equates to 5.56 cents per gallon of gasoline, much less than the current state gasoline tax of 16 cents per gallon. The county fuel taxes, which are used by the counties for their respective highway needs, would remain unaffected.
The purpose of this Act is to:
(1) Replace the environmental response, energy, and food security tax with a carbon emission tax on the sale of all fuels with carbon content; and
(2) Repeal the state fuel tax.
This Act is intended to be revenue neutral with the existing fuel taxes.
SECTION 2. Chapter 243, Hawaii Revised Statutes, is amended by amending its title to read as follows:
"CHAPTER 243
CARBON EMISSIONS AND FUEL TAX LAW"
SECTION 3. Section 243-3.5, Hawaii Revised Statutes, is amended to read as follows:
"§243-3.5 [Environmental response,
energy, and food security tax; uses.] Carbon emissions tax. (a) In addition to any other taxes provided by
law, subject to the exemptions set forth in section 243-7, there is hereby
imposed a state [environmental response, energy, and food security tax on
each barrel or fractional part of a barrel of petroleum product sold by a
distributor to any retail dealer or end user of petroleum product, other than a
refiner. The tax shall be $1.05 on each
barrel or fractional part of a barrel of petroleum product that is not aviation
fuel; provided that of] carbon emissions tax of $6.25 per ton of
carbon dioxide equivalent emissions on all fossil fuels sold by
a distributor to any retail dealer or end user of the fuel, other than a
refiner. The tax shall be paid by
the distributor of the fuel. The
tax shall be as follows:
(1) Propane: $0.0360 per gallon;
(2) Butane: $0.0420 per gallon;
(3) Butane/propane mix: $0.0388 per gallon;
(4) Home heating and diesel fuel (distillate): $0.0635 per gallon;
(5) Kerosene: $0.0610 per gallon;
(6) Coal (all types): $13.1301 per short ton;
(7) Natural gas: $0.3320 per thousand cubic feet;
(8) Gasoline: $0.0556 per gallon;
(9) Residual heating fuel (businesses only): $0.0737 per gallon;
(10) Jet fuel: $0.0598 per gallon;
(11) Aviation gas: $0.0522 per gallon;
(12) Flared natural gas: $0.3422 per thousand cubic feet;
(13) Petroleum coke: $0.0919 per gallon;
(14) Other petroleum and miscellaneous fuels: $0.0626 per gallon;
(15) Asphalt and road oil: $0.0747 per gallon;
(16) Lubricants: $0.0670 per gallon;
(17) Petrochemical feedstocks: $0.0701 per gallon;
(18) Special naphthas (solvents): $0.0569 per gallon;
(19) Waxes: $0.0598 per gallon;
(20) Anthracite: $16.1167 per short ton;
(21) Bituminous: $13.9800 per short ton;
(22) Subbituminous: $10.5344 per short ton;
(23) Lignite: $7.9141 per short ton;
(24) Coke: $17.6892 per short ton;
(25) Municipal solid waste: $16.3605 per short ton;
(26) Tire-derived fuel: $17.4633 per short ton;
(27) Waste oil: $2.6195 per barrel; and
(28) All other fuels: $6.25 per ton of carbon dioxide equivalent
emissions;
provided that the department of taxation shall recommend
updates to the tax per fuel annually, based on the United States Energy
Information Administration's determination of carbon dioxide emissions per
energy source, and submit proposed legislation to the legislature no later than
twenty days prior to the convening of each regular session of the legislature with
updates to the tax rates.
(b) Of the tax collected pursuant to this [subsection:]
section:
(1) [5 cents of the tax on each barrel] $1,290,000
shall be deposited into the environmental response revolving fund established
under section 128D-2;
(2) [15 cents of the tax on each barrel] $3,872,000
shall be deposited into the energy security special fund established under
section 201-12.8;
(3) [10 cents of the tax on each barrel] $2,582,000
shall be deposited into the energy systems development special fund established
under section 304A-2169.1; and
(4) [15 cents of the tax on each barrel] $3,872,000
shall be deposited into the agricultural development and food security special fund
established under section 141-10.
[The tax imposed by this
subsection shall be paid by the distributor of the petroleum product.
(b) In addition to subsection (a), the tax shall
also be imposed on each one million British thermal units of fossil fuel sold
by a distributor to any retail dealer or end user, other than a refiner, of
fossil fuel. The tax shall be 19 cents
on each one million British thermal units of fossil fuel; provided that of the
tax collected pursuant to this subsection:
(1) 4.8 per cent of the tax on each one million
British thermal units shall be deposited into the environmental response
revolving fund established under section 128D-2;
(2) 14.3 per cent of the tax on each one
million British thermal units shall be deposited into the energy security
special fund established under section 201-12.8;
(3) 9.5 per cent of the tax on each one million
British thermal units shall be deposited into the energy systems development
special fund established under section 304A-2169.1; and
(4) 14.3 per cent of the tax on each one
million British thermal units shall be deposited into the agricultural
development and food security special fund established under section 141-10.
The tax imposed by this
subsection shall be paid by the distributor of the fossil fuel.]
(c)
The tax imposed under subsection [(b)] (a) shall
not apply to coal used to fulfill a signed power purchase agreement between an
independent power producer and an electric utility that is in effect [as of]
between June 30, 2015[. An],
and September 1, 2022. Until September
1, 2022, an independent power producer shall be permitted to pass the tax
imposed under subsection [(b)] (a) on to an electric utility[. In], in which case, the electric
utility may recover the cost of the tax through an appropriate surcharge to the
end user that is approved by the public utilities commission.
(d) A gas utility shall be allowed to recover the
cost of the tax imposed under subsection [(b)] (a) as part of its
fuel cost in its fuel adjustment charge without further approval by the public
utilities commission.
(e)
Each distributor subject to the tax imposed by [subsection (a) or (b)]
this section, on or before the last day of each calendar month, shall
file with the director, on forms prescribed, prepared, and furnished by the
director, a return statement of the tax under this section for which the
distributor is liable for the preceding month.
The form and payment of the tax shall be transmitted to the department
of taxation in the appropriate district.
(f) [Notwithstanding section 248-8 to the
contrary, the environmental response, energy, and food security] The
tax collected under this section shall be paid over to the director of finance
for deposit as provided in subsection [(a) or] (b)[, as the case may be.]
and section 248-8.
(g)
Every distributor shall keep in the State and preserve for five years a
record in a form as the department of taxation shall prescribe showing the
total number of [barrels, and the fractional part of barrels, of petroleum
product or the total number of one million British thermal units of fossil
fuel, as the case may be,] units of carbon dioxide emitting fuels
sold by the distributor during any calendar month. The record shall show any other data and
figures relevant to the enforcement and administration of this chapter as the
department may require.
(h) No tax shall be collected in respect to any liquid fuel, including diesel oil and liquefied petroleum gas, shown to the satisfaction of the department to have been sold for use in and actually delivered to, or sold in, the county of Kalawao.
[(h)]
(i) For the purposes of this
section:
["Barrel" may be
converted to million British thermal units, using the United States Department
of Energy, Energy Information Administration annual energy review or annual
energy outlook.]
"Fossil fuel" means a
hydrocarbon deposit, such as coal, natural gas, or liquefied natural gas, derived
from the accumulated remains of ancient plants or animals and used for fuel[;
provided that the term specifically does not include petroleum product].
"Unit" means the unit of measurement customarily used for the specific fossil fuel."
SECTION 4. Section 243-4, Hawaii Revised Statutes, is amended to read as follows:
"§243-4
[License] County fuel taxes. (a)
Every distributor shall, in addition to any other taxes provided by law,
pay a [license] county fuel tax to the department of taxation for
each gallon of liquid fuel refined, manufactured, produced, or compounded by
the distributor and sold or used by the distributor in the State or imported by
the distributor, or acquired by the distributor from persons who are not
licensed distributors, and sold or used by the distributor in the State. Any person who sells or uses any liquid fuel,
knowing that the distributor from whom it was originally purchased has not paid
and is not paying the tax thereon, shall pay [such] the tax as
would have applied to [such] the sale or use by the
distributor. The rates of tax imposed
are as follows:
[(1) For each gallon
of diesel oil, 1 cent;
(2) For each gallon
of gasoline or other aviation fuel sold for use in or used for airplanes, 1 cent;
(3) For each gallon
of naphtha sold for use in a power-generating facility, 2 cents;
(4)] (1) For each gallon of liquid fuel, [other than
fuel mentioned in paragraphs (1), (2), and (3), and] other than an
alternative fuel, sold or used in the city and county of Honolulu, or sold in
any county for ultimate use in the city and county of Honolulu, [16 cents
state tax, and in addition thereto] an amount, to be known as the
"city and county of Honolulu fuel tax", as shall be levied pursuant
to section 243-5;
[(5)] (2) For
each gallon of liquid fuel, [other than fuel mentioned in paragraphs (1),
(2), and (3), and] other than an alternative fuel, sold or used in the
county of Hawaii, or sold in any county for ultimate use in the county of
Hawaii, [16 cents state tax, and in addition thereto] an amount, to be
known as the "county of Hawaii fuel tax", as shall be levied pursuant
to section 243-5;
[(6)] (3) For each gallon of liquid fuel, [other than
fuel mentioned in paragraphs (1), (2), and (3), and] other than an
alternative fuel, sold or used in the county of Maui, or sold in any county for
ultimate use in the county of Maui, [16 cents state tax, and in addition
thereto] an amount, to be known as the "county of Maui fuel tax",
as shall be levied pursuant to section 243-5; and
[(7)] (4) For each gallon of
liquid fuel, [other than fuel mentioned in paragraphs (1), (2), and (3), and]
other than an alternative fuel, sold or used in the county of Kauai, or sold in
any county for ultimate use in the county of Kauai, [16 cents state tax, and
in addition thereto] an amount, to be known as the "county of Kauai
fuel tax", as shall be levied pursuant to section 243-5.
If it is shown to the satisfaction
of the department, based upon proper records and from any other evidence as the
department may require, that liquid fuel[, other than fuel mentioned in
paragraphs (1), (2), and (3),] is used for agricultural equipment that does
not operate upon the public highways of the State, the user thereof may obtain
a refund of all taxes thereon imposed by this section in excess of 1 cent per
gallon. The department shall adopt rules
to administer such refunds.
As used
in this subsection, "liquid fuel" does not include diesel oil, gasoline
or other aviation fuel sold for use in or used for airplanes, or naphtha sold
for use in a power-generating facility.
(b)
Every distributor of diesel oil, in addition to the tax required by subsection
(a), shall pay a [license] county fuel tax to the department for
each gallon of diesel oil sold or used by the distributor for operating a motor
vehicle or motor vehicles upon public highways of the State. The rates of the additional tax imposed are
as follows:
(1) For each gallon of
diesel oil sold or used in the city and county of Honolulu, or sold in any
other county for ultimate use in the city and county of Honolulu, [15 cents
state tax, and in addition thereto] an amount, to be known as the
"city and county of Honolulu fuel tax", as shall be levied pursuant
to section 243-5;
(2) For each gallon of
diesel oil sold or used in the county of Hawaii, or sold in any other county
for ultimate use in the county of Hawaii, [15 cents state tax, and in
addition thereto] an amount, to be known as the "county of Hawaii fuel
tax", as shall be levied pursuant to section 243-5;
(3) For each gallon of
diesel oil sold or used in the county of Maui, or sold in any other county for
ultimate use in the county of Maui, [15 cents state tax, and in addition
thereto] an amount, to be known as the "county of Maui fuel tax",
as shall be levied pursuant to section 243-5; and
(4) For each gallon of
diesel oil sold or used in the county of Kauai, or sold in any other county for
ultimate use in the county of Kauai, [15 cents state tax, and in addition
thereto] an amount, to be known as the "county of Kauai fuel
tax", as shall be levied pursuant to section 243-5.
If any user of diesel oil furnishes a certificate, in a form that the department shall prescribe, to the distributor or if the distributor who uses diesel oil signs the certificate, certifying that the diesel oil is for use in operating a motor vehicle or motor vehicles in areas other than upon the public highways of the State, the tax as provided in paragraphs (1) to (4) shall not be applicable. If a certificate is not or cannot be furnished and the diesel oil is in fact for use for operating a motor vehicle or motor vehicles in areas other than upon public highways of the State, the user thereof may obtain a refund of all taxes thereon imposed by the foregoing paragraphs. The department shall adopt rules to administer the refunding of such taxes.
(c)
The tax shall not be collected in respect to any benzol, benzene,
toluol, xylol, or alternative fuel sold for use other than for operating
internal combustion engines. [With
respect to these products, other than alternative fuels, the department, by
rule, shall provide for the reporting and payment of the tax and for the
keeping of records in such a manner as to collect, for each gallon of each
product sold for use in internal combustion engines for the generation of
power, or so used, the same tax or taxes as apply to each gallon of diesel
oil. With respect to alternative fuels,
the only tax collected shall be that provided in paragraphs (1), (2), and (3)
of this subsection. This subsection
shall not apply to aviation fuel sold for use in or used for airplanes.
(1) Every distributor
of any alternative fuel for operation of an internal combustion engine shall
pay a license tax to the department of one-quarter of 1 cent for each gallon of
alternative fuel sold or used by the distributor;
(2) Every
distributor, in addition to the tax required under paragraph (1) of this
subsection, shall pay a license tax to the department for each gallon of
alternative fuel sold or used by the distributor for operating a motor vehicle
or motor vehicles upon the public highways of the State at a rate proportional
to that of the rates applicable to diesel oil in subsection (b), rounded to the
nearest one-tenth of a cent, as follows:
(A) Ethanol,
0.145 times the rate for diesel;
(B) Methanol,
0.11 times the rate for diesel;
(C) Biodiesel,
0.25 times the rate for diesel;
(D) Liquefied
petroleum gas, 0.33 times the rate for diesel; and
(E) For
other alternative fuels, the rate shall be based on the energy content of the
fuels as compared to diesel fuel, using a lower heating value of one hundred thirty
thousand British thermal units per gallon as a standard for diesel, so that the
tax rate, on an energy content basis, is equal to one-quarter the rate for
diesel fuel.
The taxes so paid shall be
paid into the state treasury and deposited in special funds or paid over in the
same manner as provided in subsection (b) in respect of the tax on diesel oil;
(3) If any user of
alternative fuel furnishes to the distributor a certificate, in a form that the
department shall prescribe or if the distributor who uses alternative fuel signs
the certificate, certifying that the alternative fuel is for use in operating a
motor vehicle or motor vehicles in areas other than upon the public highways of
the State, the tax as provided by paragraphs (1) and (2) of this subsection
shall not be applicable; provided that no certificate shall be required if the
alternative fuel is used for fuel and heating purposes in the home. If a certificate is not or cannot be
furnished and the alternative fuel is in fact used for operating an internal
combustion engine or operating a motor vehicle or motor vehicles in areas other
than upon the public highways of the State, the user thereof may obtain a
refund of all taxes thereon imposed by the foregoing paragraphs. The department shall adopt rules to administer
the refunding of these taxes.]
(d) No tax shall be collected in respect to any liquid fuel, including diesel oil and liquefied petroleum gas, shown to the satisfaction of the department to have been sold for use in and actually delivered to, or sold in, the county of Kalawao."
SECTION 5. Section 243-5, Hawaii Revised Statutes, is amended by amending its title to read as follows:
"§243-5
County fuel tax[.]; amount."
SECTION 6. Section 261-5, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:
"§261-5 Disposition of airport revenue fund.
(a) Except for:
(1) All
proceeds from the passenger facility charge and deposited in the passenger
facility charge special fund; and
(2) All
proceeds from the rental motor vehicle customer facility charge and deposited
in the rental motor vehicle customer facility charge special fund,
all
moneys received by the department from rents, fees, and other charges collected
pursuant to this chapter, as well as all [aviation fuel] taxes or gasoline
or other aviation fuel sold for use in or used for airplanes paid pursuant
to section [243-4(a)(2),] 243-3.5(a), shall be paid into the
airport revenue fund created by section 248-8.
All moneys paid into the airport revenue
fund shall be appropriated, applied, or expended by the department for any
purpose within the jurisdiction, powers, duties, and functions of the department
related to the statewide system of airports, including, without limitation, the
costs of operation, maintenance, and repair of the statewide system of airports
and reserves therefor, and acquisitions (including real property and interests
therein), constructions, additions, expansions, improvements, renewals,
replacements, reconstruction, engineering, investigation, and planning for the
statewide system of airports, all or any of which in the judgment of the
department are necessary to the performance of its duties or functions. The department shall generate sufficient
revenues from its airport properties to meet all of the expenditures of the
statewide system of airports and to comply with section 39‑61; provided
that as long as sufficient revenues are generated to meet [such] the
expenditures, the director of transportation [may], in the director's
discretion, may grant a rebate of the aviation fuel taxes paid into the
airport revenue fund during a fiscal year pursuant to sections [243-4(a)(2)]
243‑3.5(a) and 248-8 to any person who has paid airport use
charges or landing fees during [such] that fiscal year. [Such] The rebate may be
granted during the next succeeding fiscal year but shall not exceed one-half
cent per gallon per person, and shall be computed on the total number of
gallons for which the tax was paid by [such] the person, for [such] the
fiscal year."
SECTION 7. Sections 128D-2, 141-10, 201-12.8, 304A-2169.1, Hawaii Revised Statutes, are amended by substituting the term "carbon emissions tax", or similar term, wherever the word "environmental response, energy, and food security tax", or similar term, appears, as the context requires.
SECTION 8. Sections 243-8, 243-12, 243-13, and 243-14, Hawaii Revised Statutes, are amended by substituting the word "county fuel tax", or similar term, wherever the word "license tax", or similar term, appears, as the context requires.
SECTION 9. Section 235-110.6, Hawaii Revised Statutes, is repealed.
["§235-110.6 Fuel tax credit for commercial fishers. (a)
Each principal operator of a commercial fishing vessel who files an
individual or corporate net income tax return for a taxable year may claim an
income tax credit under this section against the Hawaii state individual or
corporate net income tax.
(b) The tax credit shall be an amount equal to
the fuel taxes imposed under section 243-4(a) and paid by the principal
operator during the taxable year.
(c) The tax credit claimed under this section by
the principal operator shall be deductible from the principal operator's
individual or corporate income tax liability, if any, for the tax year in which
the credit is properly claimed; provided that a husband and wife filing
separate returns for a taxable year for which a joint return could have been
made by them shall claim only the tax credit to which they would have been
entitled had a joint return been filed. If the tax credit claimed by the
principal operator under this section exceeds the amount of the income tax
payments due from the principal operator, the excess of credit over payments
due shall be refunded to the principal operator from the state highway fund;
provided that the tax credit properly claimed by a principal operator who has
no income tax liability shall be paid to the principal operator from the state
highway fund; and provided further no refunds or payments on account of the tax
credit allowed by this section shall be made for amounts less than $1.
(d) The director of taxation shall prepare such
forms as may be necessary to claim a credit under this section, may require
proof of the claim for the tax credit, and may adopt rules pursuant to chapter
91.
(e) All of the provisions relating to assessments
and refunds under this chapter and under section 231-23(c)(1) shall apply to
the tax credit under this section.
(f) Claims for the tax credit under this section,
including any amended claims thereof, shall be filed on or before the end of
the twelfth month following the taxable year for which the credit may be
claimed.
(g) As used in this section:
(1) "Commercial fishing vessel" means
any water vessel which is used to catch or process fish or transport fish
loaded on the high seas.
(2) "Principal operator" means any
individual or corporate resident taxpayer who derives at least fifty-one per
cent of the taxpayer's gross annual income from commercial fishing operations."]
SECTION 10. This Act does not affect rights and duties that matured, penalties that were incurred, and proceedings that were begun before its effective date.
SECTION 11. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.
SECTION 12. This Act shall take effect upon its approval; provided that section 9 shall apply to taxable years beginning after December 31, 2018.
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INTRODUCED BY: |
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Report Title:
Taxation; Carbon Emissions Tax; License Tax
Description:
Replaces the environmental response, energy, and food security tax with a carbon emissions tax. Repeals state fuel taxes under the fuel tax law.
The summary description
of legislation appearing on this page is for informational purposes only and is
not legislation or evidence of legislative intent.
