HomeMy WebLinkAboutREP FC 180 12/02/1997 1996-1998 REPORT OF THE
COMMITTEE ON FINANCE
DATE: December 2, 1997 Re: Comm. No. 595/Res. No. 192
PLACE: Councilroom
TIME: 10:50 A.M.
Chair and Members
Hawaii County Council
Hilo, Hawaii 96720
Your Committee on Finance, to which was referred Resolution No. 192, reports as follows:
Resolution No. 192, transmitted by Chief Engineer Donna Fay K. Kiyosaki, via Communication
No. 595, dated November 20, 1997, adopts a proposed Special Tax Fuel Program which extends
the existing fuel tax rate of 8.8 cents for diesel on-highway, gasoline on-highway and others, and
6.8 cents for LPG on-highway until June 30, 2001. The projected annual revenue generated by
this fuel tax proposal is $2.5 million.
The first fuel tax imposed upon Hawaii counties for the sale of gasoline and other liquid fuel was
established in 1955 at 1 cent per gallon by Section 243-5 of the Hawaii Revised Statutes. The
section states, the amount of each County's fuel tax shall be determined by resolution and
adopted by the Council in the manner provided by law relating to expenditures of public money.
The amount fixed maybe, per gallon, one or more cents or a fraction of a cent or both, or it may
be zero.
In 1977, the Council increased the fuel tax to 5 cents per gallon. Sequentially, the Council
adopted Resolution No. 397-88 which increased the tax by an additional 3.8 cents per gallon.
Resolution No. 397-88 was also instrumental in creating the Fuel Tax Increase Expenditure Plan
that provided for the expenditure of anticipated annual revenues. The revenues were to be used
for road improvement projects over a ten year period delineated in five increments. This
measure also established a district apportionment formula, to be updated biannually, based upon
a percentage derived from each district's percentage of vehicle weight tax and road miles.
Most recently, Resolution No. 351-91 amended the original Fuel Tax Expenditure Plan by
providing for revenues more than the monthly projected amount to be available for allotment to
circle-island or round-the-island roadways, and allowing the Chief Engineer to apply
appropriations toward the hiring of consultants for the prosecution of a particular project. It also
modified the biannual update requirement of the distribution formula to biennial.
In addition to creating a Special Fuel Tax Program, Resolution No. 192 also proposes to extend
the existing fuel tax rate, establish a new revenue distribution system to better account for
inequities, and addresses other categories of work as follows: Bridge Inspection, repair and
replacement; FHWA Street Resurfacing, Repair, Improvement; Local Street Resurfacing,
Repair, Improvement; Highway Safety Improvements; and New Construction.
FC REPORT No. 180
Except for projects in the Local Street Resurfacing, Repair, Improvement category, funds may
be used as a local source of funds for projects included in the Statewide Transportation
Improvement Program (STIP). The STIP is a Federal Highway Administration (FHWA)
mandated expenditure plan based on the State's long range transportation plan. By participating
in the STIP, the County has an opportunity to receive a portion of the State Department of
Transportation's annual $120 million allocation of highway federal aid. By leveraging fuel
taxes to its maximum, the County can finance more than $8 million in construction projects and
services annually. Without federal aid, fuel taxes will not be able to support the County's
highway maintenance and improvement program.
A second draft of Resolution No. 192 was submitted clarifying the adoption date of the proposed
program to be consistent with the lapsing of the current fuel tax program.
Members of Your Committee expressed concerns with the proposed Special Fuel Tax Program
termination date of June 30, 2001. An amendment to extend the termination date to June 30,
2008, was approved; thus, providing continuity into the next administration.
Your Committee on Finance is in accord with the purpose and intent of Resolution No. 192,
Draft 2, as amended to Draft 3, and recommends its adoption.
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ny., Nom w&E Ex Respectfully submitted
CHUNG X
LEITHEAD-TOOn x COMMITTEE ON FINANCE
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SAIVTAIVGELO X ~ jy~ , Z, ti ~
SMITH X 6
TYLER x AARON S.Y. CHUM CHAIR
YACOxc X FC REPORT O. 180
ARAKAKI, EO.M. X ADOPTED: tgkj L 6 19~