The possibility of a Hawaii carbon tax has cropped up as the state debates greenhouse gas rules that are supposed to go into effect on January 1, 2012.

The recommendation of the tax was supported by four out of 10 members of a task force that was set up to advise the state Department of Health. Members supporting the measure included: Robbie Alm, executive vice president of Hawaiian Electric Co.; Jeff Mikulina, executive director of Blue Planet Foundation; Maxine Burkett, a professor at UH Manoa’s Richardson School of Law; and Makena Coffman, a professor in UH Manoa’s Department of Urban and Regional Planning.

The carbon tax was also one of three main proposals submitted to the DOH by an independent consultant paid to evaluate Hawaii’s options for reducing greenhouse gases.

Task force members opposing the measure cited concerns that a future federal carbon tax or cap and trade, could result in a double–taxation for Hawaii companies.

But whether the state has the authority to implement the tax without approval by the Legislature has come under debate.

“It’s an item we are wrestling with,” said Priscilla Ligh, a DOH environmental engineer writing the rules. “According to lawyers, we might not have authority because some sort of constitutional law that only allows the legislature to [approve] taxes.”

The measure would allow the state to tax fossil fuels, such as coal, oil and natural gas, and has been implemented in a few states, such as California, Maryland and Colorado. But it’s faced stiff resistance in others. At the federal level, attempts by President Barack Oabma to impose such a measure haven’t gotten much traction.

The state is facing a looming end of the year deadline to come up with the rules, which are required under Act 234, passed by the legislature in 2007. If it doesn’t meet the deadline, the department could be exposed to potential litigation for failure to comply with state law.

In part, the possibility of a carbon tax comes down to whether it’s structured as a fee or a tax, according to Ligh, who said she had been consulting with outside attorneys on the matter. She also said that it was unlikely to be part of any initial rules, as it would probably face challenges. DOH has the power to revise the rules later.

But others, including Mikulina, believe that the legislation does afford DOH these powers.

“In the Act, it contemplates them establishing some sort of carbon fee,” said Mikulina. “It may be semantics in terms of whether it’s a carbon tax or fee. The question may be what the money can be used for.”

It also could be a matter of how the department structured it, according to Doug Codiga, an environmental lawyer who represents Blue Planet Foundation.

“The taxing authority is reserved for the Legislature, so it would depend on how the carbon tax is structured and how broadly it was applied,” he said.

What rules, if any, will be enacted by the end of the year is also up in the air. Ligh said it was unlikely that the department would meet the deadline.

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