By Henry Curtis
For many years the State has offered ethanol subsidies to promote a possible future local ethanol industry, which has simply failed to materialize. At the same time the State has failed to offer the same opportunities for the existing and dynamic local biodiesel industry. That dichotomy is likely to continue.
The State Legislature passed SB 349 SD2 HD2 CD1 during the 2015 Legislative Session.
"Hawaii is vulnerable to soaring prices or disruptions of its energy imports, which can hinder, cripple, or even devastate the State's economy and the well-being of its inhabitants. As the most isolated land mass on earth, Hawaii imports nearly ninety per cent of its energy and almost one hundred per cent of its transportation resources. The legislature finds that it is critical for Hawaii to ensure greater energy security by becoming more self-sufficient in its energy supply."
“The purpose of this Act is to: (1) Establish a renewable fuels production tax credit to achieve greater energy security for Hawaii; and (2) Repeal the ethanol facility tax credit.”
"'Qualifying renewable fuels' means fuels produced within the State from renewable feedstocks at a production facility located within the State."
"Information shall be provided to the department of taxation and the department of business, economic development, and tourism ...shall include information on the taxpayer, facility location, facility production capacity, anticipated production start date, and taxpayer's contact information. Notwithstanding any other law to the contrary, this taxpayer and facility information shall be available for public inspection and dissemination under chapter 92F."
Governor David Ige has placed eight bills on his potential veto list. One of them is S.B. 349.
The Department of Business, Economic Development & Tourism (DBEDT) filed testimony on February 3, 2015.
“The Department also defers to the Attorney General on the legal aspects, especially concerning the definition of ‘renewable fuels,’ which may be in conflict with the commerce clause of the US Constitution.”
The U.S. Constitution, Article 1, Section 8, includes the commerce clause.
Congress is given the power “to regulate commerce with foreign nations, and among the several states, and with the Indian tribes.”
The interpretation of the commerce clause has changed over time. In essence the provision preempts states from regulating trade between states or giving preferential treatment to production in one state. Hawai`i can't say, we want renewable fuel and if it is produced in Hawai`i as opposed to Montana, then it will get a special tax credit.
Because Hawai`i is so far away from other states there is another way of approaching the issue.
Currently State energy policy places no emphasis whatsoever on greenhouse gas emissions.
But legislation could be passed which would rank fuels by their lifecycle greenhouse gas emissions. The Public Utilities Commission, the Department of Transportation and other governmental agencies could have been directed to favor or prioritize fuels based on their lifecycle greenhouse gas emissions on a per unit of electricity produced or mile driven basis.
Instead SB 349 focused on location.
"’Qualifying renewable fuels’ means fuels produced within the State from renewable feedstocks at a production facility located within the State.”
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