GOVERNOR LINGLE CALLS ON LEGISLATURE TO EXTEND GENERAL EXCISE TAX EMEPTION ON ETHANOL GASOLINE

For Immediate Release: December 29, 2006

Governor Linda Lingle today urged state legislators to extend the general excise tax exemption on gasoline blended with ethanol. 

The general excise tax on ethanol-blended fuels was suspended in April 2006 when new rules went into effect requiring at least 85 percent of motor fuel sold in the state contain at least 10 percent ethanol.  The suspension was meant to encourage the use of alternative, renewable fuels.

The suspension will expire on December 31, which could add approximately 11 cents to every gallon of gasoline sold at the start of the new year.

Anticipating the impact to Hawai`i consumers, this past legislative session the Lingle-Aiona Administration proposed extending the general excise tax exemption on ethanol-blended fuels through December 31, 2009.  The Legislature did not approve the Governor’s proposal. 

“Had the Legislature approved our proposal to extend the general excise tax exemption, Hawai`i consumers would have an additional three years of reduced costs for ethanol-blended fuels, rather than having to pay more at the pump starting January 1,” said Governor Lingle.  “I encourage legislators to recognize the impact to consumers as well as the need to continue to provide incentives to use alternative fuels by extending the general excise tax exemption when they reconvene in January.”

The Administration introduced two bills (HB2308 and SB2271) containing the proposed extension in the 2006 legislative session.  The bills made it out of the House and Senate Energy committees, House Agriculture Committee, and Senate Commerce Committee, but died in the House Finance Committee and Senate Ways and Means Committee, neither of which scheduled a hearing on the measures. 

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For more information, contact:
Lenny Klompus
Senior Advisor – Communications
Phone: 586-7708

Russell Pang
Chief of Media Relations
Phone: 586-0043