Senator J. Kalani English
State Capitol, Room 205
Honolulu, Hawai'i 96813
Contact: Richard Rapoza
(808) 586-6259
Cell (808) 392-0780

NEWS RELEASE
April 10, 2007

SENATE REVIVES GE TAX EXEMPTION ON GASOLINE SALES

HONOLULU – Senator J. Kalani English (District 6 - Hana, East and Upcountry Maui, Moloka'i, Lana'i and Kaho'olawe) today introduced a floor amendment to House Bill 1757 that would reinstate the General Excise Tax exemption on the sale of gasoline and fuels containing ethanol. The bill also increases the gasoline license tax by one cent, with funds collected going to the state highway fund.

"We are reviving the general excise tax exemption on gasoline and alcohol fuels in order to offer some relief to consumers," says English. "I hope the oil companies realize that we want to see these savings passed on to Hawai'i's drivers. We will be watching that very closely."

"Of course, we will also need the cooperation of the House when the bill moves into conference," adds English. "But I am hopeful that they appreciate the importance of helping Hawai'i consumers, and that they will work with us to pass the bill."

Senator Ron Menor, who requested the amendment and has been a key supporter of the exemption, says the savings to consumers could be substantial. "The exemption could reduce taxes by as much as ten cents per gallon, which would translate to over $30 million in savings to consumers," he says. "This is part of the legislature's on-going effort to provide relief to consumers from high gas prices in this state, and Hawai'i's families deserve our support.."

By including the tax exemption on fuels containing ethanol, the bill supports Hawai'i's commitment to alternative fuels, according to English. "Converting to renewable energy sources requires an on-going commitment," he says. "Exempting ethanol fuels from the GE tax encourages the use of biofuels, which is the direction our state needs to move in."

The general excise tax exemption and the one-cent increase in the gasoline license tax also have the support of Senator Roz Baker (District 5 - South and West Maui, Kapalua, Ka'anapali, Lahaina, Ma'alaea, Kihei, Wailea, Makena), who chairs the Senate Ways and Means Committee. "It is a good trade-off," says Baker. "The exemption will reduce the price of gasoline by ten to thirteen cents, and add one cent per gallon to the highway special fund. That extra penny could add as much as $14 million per year to the highway fund. Our highways need attention and vital improvements. If we had that $14 million a year ago, we might not have seen the conditions that led to the closing of the road at Waimea Bay. Multiply that by the number of critical sites around the state, and you see how important that extra penny can be."

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