HB 1161: DOT; Electric Vehicles; State Mileage-Based Road Usage Charge; County Mileage-Based Road Usage Charge; State Highway Fund; Highway Fund; Disposition of Funds; Appropriations

A BILL FOR AN ACT

RELATING TO TRANSPORTATION.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

     SECTION 1.  The legislature finds that as a means of addressing declining fuel tax revenues, the department of transportation supports the adoption of a per-mile road usage charge to provide fair and sustainable funding for the State's road infrastructure.  The legislature further finds that with the existing vehicle inspection program, the State and counties are well-positioned to transition to a per-mile road usage charge with low administrative costs.  In 2023, the legislature enacted a small-scale per-mile road usage charge program for electric vehicles.  Beginning on July 1, 2025, drivers of electric vehicles will be provided a choice of paying a state road usage charge at a rate of 0.8 cents per mile traveled or paying a flat fee of no more than $50 per year.  This choice will be permitted until June 30, 2028, at which time all electric vehicles will pay a state road usage charge.  The number of miles will be calculated based on an odometer reading recorded during the motor vehicle safety inspection.  Finally, the legislature required the department of transportation to develop a plan to transition all vehicles in Hawaii to a per-mile road usage charge by 2033.

     The legislature further finds that in addition to the state fuel tax, counties rely on their own motor fuel tax to fund the maintenance and repair of county roads and bridges.  Like the state fuel tax, the county fuel tax is also declining, leaving counties with less revenue to maintain their roads and bridges.  The legislature now finds that counties may wish to begin transitioning to a mileage-based road usage charge as a fair and sustainable replacement for the county motor fuel tax.  The legislature finds that permitting counties to do this will result in lower administrative costs for the state and county agencies tasked with implementing the road usage charge and create more efficiency and simplicity for the traveling public as the State begins transitioning to a fair and sustainable source of transportation funding.

     The purpose of this Act is to:

     (1)  Authorize a county to impose a mileage-based road usage charge for electric vehicles beginning July 1, 2028;

     (2)  Repeal the requirement for the department of transportation to establish county subaccounts within the state highway fund;

     (3)  Clarify the disposition of funds for the state mileage-based road usage charge;

     (4)  Beginning July 1, 2026, extend the state mileage-based road-usage charge to plug-in hybrid electric vehicles;

     (5)  Clarify the rate and calculation of the state mileage-based road usage charge;

     (6)  Specify that rental motor vehicle companies may visibly pass the costs of the mileage-based road usage charges to the consumer;

     (7)  Expand the authorized usage for the disposition of funds for the state highway fund and highway fund; and

     (8)  Appropriate funds.

     SECTION 2.  Chapter 249, Hawaii Revised Statutes, is amended by adding three new sections to be appropriately designated and to read as follows:

     "§249-A  County mileage-based road usage charge; established.  (a)  Beginning July 1, 2028, in addition to all other fees and taxes levied by this chapter, a county may impose a county mileage-based road usage charge on electric vehicles. (b)  The county mileage-based road usage charge shall be calculated by the director of finance at the rate established under section 249-B, multiplied by the number of miles traveled, less the estimated amount of paid county fuel taxes that correspond with the number of miles traveled, as shall be determined by rule.  The number of miles traveled shall be calculated as the difference between the electric vehicle's two most recent odometer readings, as noted on the vehicle's certificate of inspection issued pursuant to section 286-26(e).

     (c)  If a county establishes a mileage-based road usage charge pursuant to section 249-B, for the first registration renewal of new electric vehicles for which no certificate of inspection is required, the county mileage-based road usage charge assessed shall be $50, which shall be subtracted from the calculation of the county mileage-based road usage charge upon that vehicle's second registration renewal.

     (d)  The county mileage-based road usage charge shall be paid each year following the electric vehicle's most recent inspection together with all other taxes and fees levied by this chapter on a staggered basis as established by each county as authorized by section 286-51 to ensure that the county mileage-based road usage charge is due and payable at the same time and shall be collected together with the county registration fee.  The county mileage-based road usage charge shall be deemed delinquent if not paid with the county registration fee.

     (e)  Notwithstanding subsection (a), all electric vehicles registered in the State that qualify for an exemption under sections 249-4, 249-5.5, 249-6, and 249-6.5 shall be exempt from this section.

     (f)  Each county may adopt rules pursuant to chapter 91 for establishing and administering the county mileage-based road usage charge.

     (g)  For the purposes of this section "electric vehicle" has the same meaning as in section 249-36.

     §249-B  County mileage-based road usage charge; rate; establishment.  (a)  Each county shall establish the rate to be used to calculate the amount of that county's mileage-based road usage charge in the manner provided for by ordinances involving the expenditure of public funds; provided that until the rate is established, the county mileage-based road usage charge for that county shall be zero.  The amount of the county mileage-based road usage charge shall be comparable to the county fuel tax and no more than the estimated county fuel tax.

     (b)  No ordinance establishing the rate for a county mileage-based road usage charge shall be adopted until a public hearing on the proposed rate for the county mileage-based road usage charge has been held.  Public notice of the hearing shall be given at least twice within the thirty-day period immediately preceding the date of the hearing.  The rate for the county mileage-based road usage charge shall take effect on the first day of the second month following the adoption of an ordinance establishing a county mileage-based road usage charge.

     (c)  Each county may establish a per mile rate for a county mileage-based road usage charge that is:

     (1)  One or more cents, a fraction of a cent, or both; or

     (2)  Zero.

     (d)  If a county mileage-based road usage charge cannot be calculated because of missing, incomplete, or incorrect odometer reading information, a vehicle subject to the county mileage‑based road usage charge shall be subject to a default county mileage-based road usage charge as established by the county.

     §249-C  County mileage-based road usage charge; dispositions.  The county mileage-based road usage charge for each county shall be collected by the respective county and deposited into the respective county highway fund established pursuant to section 249-18; provided that amounts collected in the county of Maui on vehicle miles traveled on the island of Lanai shall be used solely for expenditures on the island of Lanai; provided further that the amounts collected in the county of Maui on vehicle miles traveled on the island of Molokai shall be used solely for expenditures on the island of Molokai."

     SECTION 3.  Section 248-9, Hawaii Revised Statutes, is amended to read as follows:

     "§248-9  State highway fund.  (a)  Moneys in the state highway fund may be expended for the following purposes:

     (1)  To pay the costs of operation, maintenance, and repair of the state highway system, and infrastructure and related appurtenances pursuant to section 264-142, including without limitation, the cost of equipment and general administrative overhead;

     (2)  To pay the costs of acquisition, including real property and interests therein; planning; designing; construction; and reconstruction of the state highway system and bikeways, and infrastructure and related appurtenances pursuant to section 264-142, including without limitation, the cost of equipment and general administrative overhead;

     (3)  To reimburse the general fund for interest on and principal of general obligation bonds issued to finance highway projects where the bonds are designated to be reimbursable out of the state highway fund;

     (4)  To pay the costs of construction, maintenance, and repair of county roads; provided that none of the funds expended on a county road or program shall be federal funds when expenditure would cause a violation of federal law or a federal grant agreement; [and]

     (5)  To pay the costs of establishing and maintaining a drug and alcohol toxicology testing laboratory that is intended to support the prosecution of offenses relating to operation of a motor vehicle while under the influence of an intoxicant[.];

     (6)  For the purposes and functions connected with traffic control and preservation of safety upon the public highways and streets; and

     (7)  Other measures to reduce vehicle miles traveled.

     (b)  At any time, the director of transportation may transfer from the state highway fund all or any portion of available moneys determined by the director of transportation to exceed one hundred thirty-five per cent of the requirements for the ensuing twelve months for the state highway fund as permitted by and in accordance with section 37-53.  For purposes of the determination, the director of transportation shall take into consideration:

     (1)  The amount of federal funds and bond funds on deposit in, and budgeted to be expended from, the state highway fund during the period;

     (2)  Amounts on deposit in the state highway fund that are encumbered or otherwise obligated;

     (3)  Budgeted amounts payable from the state highway fund during the period;

     (4)  Revenues anticipated to be received by and expenditures to be made from the state highway fund during the period based on existing agreements and other information for the ensuing twelve months; and

     (5)  Any other factors as the director of transportation shall deem appropriate.

     [(c)  The department of transportation shall establish county subaccounts within the state highway fund. Notwithstanding subsections (a) and (b), funds in each county subaccount shall be expended for state highway road capacity projects in the respective county.

     For purposes of this subsection, "state highway road capacity project" means construction:

     (1)  Of a new road;

     (2)  To widen or add additional lanes to an existing road; or

     (3)  That increases the number of vehicles that may be driven on an island and alleviates the level of traffic congestion on existing roads of that island,

and any planning, design, or right-of-way acquisition related to the construction.]"

     SECTION 4.  Section 249-18, Hawaii Revised Statutes, is amended to read as follows:

     "§249-18  Highway fund.  All taxes, fees, or charges collected under this chapter, except those collected pursuant to sections 249-14 and 249-14.5[,] and the state mileage-based road usage charge established under 249-36, shall be deposited in a county fund to be known as the "highway fund" and shall be expended in the county in which the taxes, fees, or charges are collected for the following purposes:

     (1)  For acquisition, designing, construction, improvement, repair, and maintenance of public roads and highways, including without restriction of the foregoing purposes, costs of new land therefor, of permanent storm drains or new bridges, as well as repairs or additions to storm drains or bridges;

     (2)  For installation, maintenance, and repair of street lights and power, and other charges for street lighting purposes, including replacement of old street lights, on county maintained public roads and highways;

     (3)  For purposes and functions connected with traffic control and preservation of safety upon the public highways and streets;

     (4)  For payment of interest on and redemption of bonds issued to finance highway and street construction and improvements;

     (5)  In the case of the city and county of Honolulu, for appropriation for the police department up to the sum of $500,000.  No expenditures shall be made out of this fund [which] that will jeopardize federal aid for highway construction;

     (6)  For purposes and functions connected with mass transit; and

     (7)  For the acquisition, design, construction, improvement, repair, and maintenance of bikeways[.] and walkways; and

     (8)  Other measures to reduce vehicle miles traveled."

     SECTION 5.  Section 249-36, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

     "(a)  [Beginning July 1, 2025, in] In addition to all other fees and taxes levied by this chapter, electric vehicles, beginning July 1, 2025, shall be subject to a state mileage‑based road usage charge.  The state mileage-based road usage charge shall be calculated by the county director of finance at the rate of 0.8 cents per mile traveled, multiplied by the number of miles traveled, less the estimated amount of paid state fuel taxes that correspond with the number of miles traveled.  The department shall adopt rules pursuant to chapter 91 to determine the method for calculating the estimated amount of paid state fuel taxes that correspond with the number of miles traveled.  The number of miles traveled shall be calculated as the difference between the vehicle's two most recent odometer readings, as noted on the vehicle's certificate of inspection pursuant to section 286-26(e).  The state mileage‑based road usage charge shall be [not] no less than $0, and, until June 30, 2028, the state mileage-based road usage charge shall be [not] no more than $50 per year.  For the first registration renewal of new motor vehicles for which no certificate of inspection is required, the state mileage-based road usage charge assessed shall be $50, and [such] the amount once paid shall be subtracted from the calculation of the state mileage-based road usage charge upon that vehicle's second registration renewal.  If the state mileage-based road usage charge cannot be calculated because of missing, incomplete, or incorrect odometer reading information:

     (1)  Until June 30, 2028, a vehicle subject to the state mileage-based road usage charge is subject to a default state mileage-based road usage charge of $50; and

     (2)  Effective July 1, 2028, a vehicle subject to the state mileage-based road usage shall be subject to a default state mileage-based road usage charge of $80."

     SECTION 6.  Section 437D-3, Hawaii Revised Statutes, is amended by amending the definition of "vehicle license recovery fees" to read as follows:

     ""Vehicle license recovery fees" includes motor vehicle weight taxes under section 249-2; fees connected with the registration of specially constructed, reconstructed, or rebuilt vehicles, special interest vehicles, or imported vehicles as referenced in section 286-41(c); license plate and emblem fees under section 249-7(b); state and county mileage-based road usage charges under sections 249-36 and 249-A; inspection fees as referenced in section 286-26; highway beautification fees as referenced in section 286-51(b)(1); and any use tax under chapter 238."

     SECTION 7.  There is appropriated out of the state highway fund the sum of $           or so much thereof as may be necessary for fiscal year 2025-2026 for the implementation of the state mileage-based road usage charge program, to be used with available federal funds; provided that moneys appropriated pursuant to this section shall not lapse at the end of the fiscal year and any unexpended or unencumbered funds as of June 30, 2026, shall lapse into the state highway fund as of that date.

     The sum appropriated shall be expended by the department of transportation for the purposes of this Act.

     SECTION 8.  There is appropriated out of the state highway fund the sum of $           or so much thereof as may be necessary for fiscal year 2025-2026 to be used with $802,400 federal funds and the sum of $           or so much thereof as may be necessary for fiscal year 2026-2027 to be used with $1,542,480 federal funds, for the continued implementation of the state mileage-based road user charge established pursuant to section 249-36, Hawaii Revised Statutes; provided that the moneys appropriated for fiscal year 2025-2026 and fiscal year 2026-2027 for the purposes of this Act shall not lapse at the end of their respective fiscal year and any unexpended or unencumbered funds as of June 30, 2028, shall lapse into the state highway fund as of that date.

     The sums appropriated shall be expended by the department of transportation for the purposes of this Act.

     SECTION 9.  In codifying the new sections added by section 2 of this Act, the revisor of statutes shall substitute appropriate section numbers for the letters used in designating and referring to the new sections in this Act.

     SECTION 10.  Statutory material to be repealed is bracketed and stricken.  New statutory material is underscored.

     SECTION 11.  This Act shall take effect on July 1, 3000.

Report Title:

DOT; Electric Vehicles; State Mileage-Based Road Usage Charge; County Mileage-Based Road Usage Charge; State Highway Fund; Highway Fund; Disposition of Funds; Appropriations

Description:

Beginning 7/1/2028, authorizes a county to impose a mileage‑based road usage charge on electric vehicles.  Provides and requires a county to establish the rate of the road usage charge.  Repeals the requirement for the Department of Transportation to establish county subaccounts within the State Highway Fund.  Clarifies the disposition of funds for state mileage-based road usage charge.  Clarifies the rate and calculation of the state mileage-based road usage charge.  Specifies that rental motor vehicle companies may visibly pass the costs of the mileage-based road usage charges to the consumer.  Expands allowable uses of the State Highway and Highway Funds.  Appropriates funds.  Effective 7/1/3000.  (SD1)

The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.

A BILL FOR AN ACT

RELATING TO TRANSPORTATION.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

     SECTION 1.  The legislature finds that as a means of addressing declining fuel tax revenues, the department of transportation supports the adoption of a per-mile road usage charge to provide fair and sustainable funding for the State's road infrastructure.  The legislature further finds that with the existing vehicle inspection program, the State and counties are well-positioned to transition to a per-mile road usage charge with low administrative costs.  In 2023, the legislature enacted a small-scale per-mile road usage charge program for electric vehicles.  Beginning on July 1, 2025, drivers of electric vehicles will be provided a choice of paying a state road usage charge at a rate of 0.8 cents per mile traveled or paying a flat fee of no more than $50 per year.  This choice will be permitted until June 30, 2028, at which time all electric vehicles will pay a state road usage charge.  The number of miles will be calculated based on an odometer reading recorded during the motor vehicle safety inspection.  Finally, the legislature required the department of transportation to develop a plan to transition all vehicles in Hawaii to a per-mile road usage charge by 2033.

     The legislature further finds that in addition to the state fuel tax, counties rely on their own motor fuel tax to fund the maintenance and repair of county roads and bridges.  Like the state fuel tax, the county fuel tax is also declining, leaving counties with less revenue to maintain their roads and bridges.  The legislature now finds that counties may wish to begin transitioning to a mileage-based road usage charge as a fair and sustainable replacement for the county motor fuel tax.  The legislature finds that permitting counties to do this will result in lower administrative costs for the state and county agencies tasked with implementing the road usage charge and create more efficiency and simplicity for the traveling public as the State begins transitioning to a fair and sustainable source of transportation funding.

     The legislature also finds that plug-in hybrid electric vehicles, which operate with minimal fuel consumption, should be transitioned to the per-mile road usage charge sooner than 2033.

     The purpose of this Act is to:

     (1)  Authorize a county to impose a mileage-based road usage charge for electric vehicles and plug-in hybrid electric vehicles beginning July 1, 2028;

     (2)  Repeal the requirement for the department of transportation to establish county subaccounts within the state highway fund;

     (3)  Clarify the disposition of funds for the state mileage-based road usage charge;

     (4)  Beginning July 1, 2026, extend the state mileage-based road-usage charge to plug-in hybrid electric vehicles;

     (5)  Clarify the rate and calculation of the state mileage-based road usage charge;

     (6)  Specify that rental motor vehicle companies may visibly pass the costs of the mileage-based road usage charges to the consumer; and

     (7)  Appropriate funds.

     SECTION 2.  Chapter 249, Hawaii Revised Statutes, is amended by adding three new sections to be appropriately designated and to read as follows:

     "§249-A  County mileage-based road usage charge; established.  (a)  Beginning July 1, 2028, in addition to all other fees and taxes levied by this chapter, a county may impose a county mileage-based road usage charge on electric vehicles and plug-in hybrid electric vehicles.

     (b)  The county mileage-based road usage charge shall be calculated by the director of finance at the rate established under section 249-B, multiplied by the number of miles traveled, less the estimated amount of paid county fuel taxes that correspond with the number of miles traveled, as shall be determined by rule.  The number of miles traveled shall be calculated as the difference between the electric vehicle's or plug-in hybrid electric vehicle's two most recent odometer readings, as noted on the vehicle's certificate of inspection issued pursuant to section 286-26(e).

     (c)  If a county establishes a mileage-based road usage charge pursuant to section 249-B, for the first registration renewal of new electric vehicles or new plug-in hybrid electric vehicles for which no certificate of inspection is required, the county mileage-based road usage charge assessed shall be $50, which shall be subtracted from the calculation of the county mileage-based road usage charge upon that vehicle's second registration renewal.

     (d)  The county mileage-based road usage charge shall be paid each year following the electric vehicle's or plug-in hybrid electric vehicle's most recent inspection together with all other taxes and fees levied by this chapter on a staggered basis as established by each county as authorized by section 286-51 to ensure that the county mileage-based road usage charge is due and payable at the same time and shall be collected together with the county registration fee.  The county mileage-based road usage charge shall be deemed delinquent if not paid with the county registration fee.

     (e)  Notwithstanding subsection (a), all electric vehicles and plug-in hybrid electric vehicles registered in the State that qualify for an exemption under sections 249-4, 249-5.5, 249-6, and 249-6.5 shall be exempt from this section.

     (f)  Each county may adopt rules pursuant to chapter 91 for establishing and administering the county mileage-based road usage charge.

     (g)  For the purposes of this section:

     "Electric vehicle" has the same meaning as in section 249-36.

     "Plug-in hybrid electric vehicle" has the same meaning as in section 249-36.

     §249-B  County mileage-based road usage charge; rate; establishment.  (a)  Each county shall establish the rate to be used to calculate the amount of that county's mileage-based road usage charge in the manner provided for by ordinances involving the expenditure of public funds; provided that until such rate is established, the county mileage-based road usage charge for that county shall be zero.

     (b)  No ordinance establishing the rate for a county mileage-based road usage charge shall be adopted until a public hearing on the proposed rate for the county mileage-based road usage charge has been held.  Public notice of the hearing shall be given at least twice within the thirty-day period immediately preceding the date of the hearing.  The rate for the county mileage-based road usage charge shall take effect on the first day of the second month following the adoption of an ordinance establishing a county mileage-based road usage charge.

     (c)  Each county may establish a per mile rate for a county mileage-based road usage charge that is:

     (1)  One or more cents, a fraction of a cent, or both; or

     (2)  Zero.

     (d)  If a county mileage-based road usage charge cannot be calculated because of missing, incomplete, or incorrect odometer reading information, a vehicle subject to the county mileage‑based road usage charge shall be subject to a default county mileage-based road usage charge as established by the county.

     §249-C  County mileage-based road usage charge; dispositions.  The county mileage-based road usage charge for each county shall be collected by the respective county and deposited into the respective county highway fund established pursuant to section 249-18; provided that amounts collected in the county of Maui on vehicle miles traveled on the island of Lanai shall be used solely for expenditures on the island of Lanai; provided further that the amounts collected in the county of Maui on vehicle miles traveled on the island of Molokai shall be used solely for expenditures on the island of Molokai."

     SECTION 3.  Section 248-9, Hawaii Revised Statutes, is amended to read as follows:

     "§248-9  State highway fund.  (a)  Moneys in the state highway fund may be expended for the following purposes:

     (1)  To pay the costs of operation, maintenance, and repair of the state highway system, including without limitation, the cost of equipment and general administrative overhead;

     (2)  To pay the costs of acquisition, including real property and interests therein; planning; designing; construction; and reconstruction of the state highway system and bikeways, including without limitation, the cost of equipment and general administrative overhead;

     (3)  To reimburse the general fund for interest on and principal of general obligation bonds issued to finance highway projects where the bonds are designated to be reimbursable out of the state highway fund;

     (4)  To pay the costs of construction, maintenance, and repair of county roads; provided that none of the funds expended on a county road or program shall be federal funds when expenditure would cause a violation of federal law or a federal grant agreement; and

     (5)  To pay the costs of establishing and maintaining a drug and alcohol toxicology testing laboratory that is intended to support the prosecution of offenses relating to operation of a motor vehicle while under the influence of an intoxicant.

     (b)  At any time, the director of transportation may transfer from the state highway fund all or any portion of available moneys determined by the director of transportation to exceed one hundred thirty-five per cent of the requirements for the ensuing twelve months for the state highway fund as permitted by and in accordance with section 37-53.  For purposes of the determination, the director of transportation shall take into consideration:

     (1)  The amount of federal funds and bond funds on deposit in, and budgeted to be expended from, the state highway fund during the period;

     (2)  Amounts on deposit in the state highway fund that are encumbered or otherwise obligated;

     (3)  Budgeted amounts payable from the state highway fund during the period;

     (4)  Revenues anticipated to be received by and expenditures to be made from the state highway fund during the period based on existing agreements and other information for the ensuing twelve months; and

     (5)  Any other factors as the director of transportation shall deem appropriate.

     [(c)  The department of transportation shall establish county subaccounts within the state highway fund. Notwithstanding subsections (a) and (b), funds in each county subaccount shall be expended for state highway road capacity projects in the respective county.

     For purposes of this subsection, "state highway road capacity project" means construction:

     (1)  Of a new road;

     (2)  To widen or add additional lanes to an existing road; or

     (3)  That increases the number of vehicles that may be driven on an island and alleviates the level of traffic congestion on existing roads of that island,

and any planning, design, or right-of-way acquisition related to the construction.]"

     SECTION 4.  Section 249-18, Hawaii Revised Statutes, is amended to read as follows:

     "§249-18  Highway fund.  All taxes, fees, or charges collected under this chapter, except those collected pursuant to sections 249-14 and 249-14.5[,] and the state mileage-based road usage charge established under 249-36, shall be deposited in a county fund to be known as the "highway fund" and shall be expended in the county in which the taxes, fees, or charges are collected for the following purposes:

     (1)  For acquisition, designing, construction, improvement, repair, and maintenance of public roads and highways, including without restriction of the foregoing purposes, costs of new land therefor, of permanent storm drains or new bridges, as well as repairs or additions to storm drains or bridges;

     (2)  For installation, maintenance, and repair of street lights and power, and other charges for street lighting purposes, including replacement of old street lights, on county maintained public roads and highways;

     (3)  For purposes and functions connected with traffic control and preservation of safety upon the public highways and streets;

     (4)  For payment of interest on and redemption of bonds issued to finance highway and street construction and improvements;

     (5)  In the case of the city and county of Honolulu, for appropriation for the police department up to the sum of $500,000.  No expenditures shall be made out of this fund [which] that will jeopardize federal aid for highway construction;

     (6)  For purposes and functions connected with mass transit; and

     (7)  For the acquisition, design, construction, improvement, repair, and maintenance of bikeways."

     SECTION 5.  Section 249-36, Hawaii Revised Statutes, is amended as follows:

     1.  By amending subsection (a) to read:

     "(a)  [Beginning July 1, 2025, in] In addition to all other fees and taxes levied by this chapter, electric vehicles, beginning July 1, 2025, and plug-in hybrid electric vehicles, beginning July 1, 2026, shall be subject to a state mileage-based road usage charge.  The state mileage-based road usage charge shall be calculated by the county director of finance at the rate of 0.8 cents per mile traveled, multiplied by the number of miles traveled, less the estimated amount of paid state fuel taxes that correspond with the number of miles traveled.  The department shall adopt rules pursuant to chapter 91 to determine the method for calculating the estimated amount of paid state fuel taxes that correspond with the number of miles traveled.  The number of miles traveled shall be calculated as the difference between the vehicle's two most recent odometer readings, as noted on the vehicle's certificate of inspection pursuant to section 286-26(e).  The state mileage-based road usage charge shall be [not] no less than $0, and, until June 30, 2028, the state mileage-based road usage charge shall be [not] no more than $50 per year.  For the first registration renewal of new motor vehicles for which no certificate of inspection is required, the state mileage-based road usage charge assessed shall be $50, and [such] the amount once paid shall be subtracted from the calculation of the state mileage-based road usage charge upon that vehicle's second registration renewal.  If the state mileage-based road usage charge cannot be calculated because of missing, incomplete, or incorrect odometer reading information:

     (1)  Until June 30, 2028, a vehicle subject to the state mileage-based road usage charge is subject to a default state mileage-based road usage charge of $50; and

     (2)  Effective July 1, 2028, a vehicle subject to the state mileage-based road usage shall be subject to a default state mileage-based road usage charge of $80."

     2.  By amending subsections (c) and (d) to read:

     "(c)  Vehicles subject to the state mileage-based road usage charge shall include all electric vehicles or plug-in hybrid electric vehicles in the State except for vehicles that qualify for any of the exemptions in sections 249-4, 249-5.5, 249-6, and 249-6.5.

     (d)  Until June 30, 2028, owners of electric vehicles and plug-in hybrid electric vehicles shall be offered a choice to pay a $50 registration surcharge in lieu of the state mileage-based road usage charge."

     3.  By amending subsection (g) to read:

     "(g)  For the purposes of this section[, "electric]:

     "Electric vehicle" means a vehicle, with three or more wheels, a gross vehicle weight rating less than or equal to ten thousand pounds, and the capability to operate legally at a speed of more than thirty-five miles per hour, that draws propulsion energy exclusively from a battery that can be recharged from an external source of electricity.

     "Plug-in hybrid electric vehicle" means a vehicle that can use batteries to power an electric motor and use another fuel, such as gasoline or diesel, to power an internal combustion engine or other propulsion source, and that may use electricity from the grid to run the vehicle some or all of the time."

     SECTION 6.  Section 437D-3, Hawaii Revised Statutes, is amended by amending the definition of "vehicle license recovery fees" to read as follows:

     ""Vehicle license recovery fees" includes motor vehicle weight taxes under section 249-2; fees connected with the registration of specially constructed, reconstructed, or rebuilt vehicles, special interest vehicles, or imported vehicles as referenced in section 286-41(c); license plate and emblem fees under section 249-7(b); state and county mileage-based road usage charges under sections 249-36 and 249-A; inspection fees as referenced in section 286-26; highway beautification fees as referenced in section 286-51(b)(1); and any use tax under chapter 238."

     SECTION 7.  There is appropriated out of the state highway fund the sum of $           or so much thereof as may be necessary for fiscal year 2025-2026 for the implementation of the state mileage-based road usage charge program, to be used with available federal funds; provided that moneys appropriated pursuant to this section shall not lapse at the end of the fiscal year and any unexpended or unencumbered funds as of June 30, 2026, shall lapse into the state highway fund as of that date.

     The sum appropriated shall be expended by the department of transportation for the purposes of this Act.

     SECTION 8.  There is appropriated out of the state highway fund the sum of $           or so much thereof as may be necessary for fiscal year 2025-2026 to be used with $802,400 federal funds and the sum of $           or so much thereof as may be necessary for fiscal year 2026-2027 to be used with $1,542,480 federal funds, for the continued implementation of the state mileage-based road user charge established pursuant to section 249-36, Hawaii Revised Statutes; provided that the moneys appropriated for fiscal year 2025-2026 and fiscal year 2026-2027 for the purposes of this Act shall not lapse at the end of their respective fiscal year and any unexpended or unencumbered funds as of June 30, 2028, shall lapse into the state highway fund as of that date.

     The sums appropriated shall be expended by the department of transportation for the purposes of this Act.

     SECTION 9.  In codifying the new sections added by section 2 of this Act, the revisor of statutes shall substitute appropriate section numbers for the letters used in designating and referring to the new sections in this Act.

     SECTION 10.  Statutory material to be repealed is bracketed and stricken.  New statutory material is underscored.

     SECTION 11.  This Act shall take effect on July 1, 3000.

Report Title:

DOT; Electric Vehicles; Plug-In Hybrid Electric Vehicle; State Mileage-Based Road Usage Charge; County Mileage-Based Road Usage Charge; State Highway Fund; Disposition of Funds; Appropriation

Description:

Beginning 7/1/2028, authorizes a county to impose a mileage-based road usage charge on electric vehicles and plug-in hybrid electric vehicles.  Provides and requires a county to establish the rate of the road usage charge.  Repeals the requirement for the Department of Transportation to establish county subaccounts within the State Highway Fund.  Clarifies the disposition of funds for state mileage-based road usage charge.  Beginning 7/1/2026, extends the state mileage-based road usage charge to plug-in hybrid electric vehicles.  Clarifies the rate and calculation of the state mileage-based road usage charge.  Specifies that rental motor vehicle companies may visibly pass the costs of the mileage-based road usage charges to the consumer.  Appropriates funds.  Effective 7/1/3000.  (HD2)

The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.

A BILL FOR AN ACT

RELATING TO TRANSPORTATION.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

     SECTION 1.  The legislature finds that as a means of addressing declining fuel tax revenues, the department of transportation supports the adoption of a per-mile road usage charge to provide fair and sustainable funding for the State's road infrastructure.  The legislature further finds that with the existing vehicle inspection program, the State and counties are well-positioned to transition to a per-mile road usage charge with low administrative costs.  In 2023, the legislature enacted a small-scale per-mile road usage charge program for electric vehicles.  Beginning on July 1, 2025, drivers of electric vehicles will be provided a choice of paying a state road usage charge at a rate of 0.8 cents per mile traveled or paying a flat fee of no more than $50 per year.  This choice will be permitted until June 30, 2028, at which time all electric vehicles will pay a state road usage charge.  The number of miles will be calculated based on an odometer reading recorded during the motor vehicle safety inspection.  Finally, the legislature required the department of transportation to develop a plan to transition all vehicles in Hawaii to a per-mile road usage charge by 2033.  The legislature further finds that in addition to the state fuel tax, counties rely on their own motor fuel tax to fund the maintenance and repair of county roads and bridges.  Like the state fuel tax, the county fuel tax is also declining, leaving counties with less revenue to maintain their roads and bridges.  The legislature now finds that counties may wish to begin transitioning to a mileage-based road usage charge as a fair and sustainable replacement for the county motor fuel tax.  The legislature finds that permitting counties to do this will result in lower administrative costs for the state and county agencies tasked with implementing the road usage charge and create more efficiency and simplicity for the traveling public as the State begins transitioning to a fair and sustainable source of transportation funding.

     The purpose of this Act is to:

     (1)  Authorize a county to impose a mileage-based road usage surcharge;

     (2)  Clarify the disposition of funds for the state mileage-based road usage charge;

     (3)  Repeal the requirement for the department of transportation to establish county subaccounts within the state highway fund;

     (4)  Establish the state mileage-based road usage charge subaccount within the state highway fund;

     (5)  Clarify the rate and calculation of the state mileage-based road usage charge; and

     (6)  Appropriate funds.

     SECTION 2.  Chapter 249, Hawaii Revised Statutes, is amended by adding three new sections to be appropriately designated and to read as follows:

     "§249-A  County mileage-based road usage charge; established.  (a)  Beginning July 1, 2028, in addition to all other fees and taxes levied by this chapter, a county may impose a county mileage-based road usage charge on electric vehicles.

     (b)  The county mileage-based road usage charge shall be calculated by the director of finance at the rate established under section 249-B, multiplied by the number of miles traveled, less the estimated amount of paid county motor fuel taxes that correspond with the number of miles traveled, as shall be determined by rule.  The number of miles traveled shall be calculated as the difference between the electric vehicle's two most recent odometer readings, as noted on the electric vehicle's certificate of inspection issued pursuant to section 286-26(e).

     (c)  If a county establishes a mileage-based road usage charge pursuant to section 249-B, for the first registration renewal of new electric vehicles for which no certificate of inspection is required, the county mileage-based road usage charge assessed shall be $50, which shall be subtracted from the calculation of the county mileage-based road usage charge upon that electric vehicle's second registration renewal.

     (d)  The county mileage-based road usage charge shall be paid each year following the electric vehicle's most recent registration together with all other taxes and fees levied by this chapter on a staggered basis as established by each county as authorized by section 286-51 to ensure that the county mileage-based road usage charge is due and payable at the same time and shall be collected together with the county registration fee. The county mileage-based road usage charge shall be deemed delinquent if not paid with the county registration fee.

     (e)  Notwithstanding subsection (a), all electric vehicles registered in the State that qualify for an exemption under sections 249-4, 249-5.5, 249-6, and 249-6.5 shall be exempt from this section.

     (f)  Each county may adopt rules pursuant to chapter 91 for establishing and administering the county mileage-based road usage charge.

     (g)  For the purposes of this section, "electric vehicle" has the same meaning as in section 249-36.

     §249-B  County mileage-based road usage charge; rate; establishment.  (a)  Each county shall establish the rate to be used to calculate the amount of that county's mileage-based road usage charge in the manner provided for by ordinances involving the expenditure of public funds; provided that until such rate is established, the county mileage-based road usage charge for each county shall be zero.

     (b)  No ordinance establishing the rate for a county mileage-based road usage charge shall be adopted until a public hearing on the proposed rate for the county mileage-based road usage charge has been held.  Public notice of the hearing shall be given at least twice within the thirty-day period immediately preceding the date of the hearing.  The rate for the county mileage-based road usage charge shall take effect on the first day of the second month following the adoption of an ordinance establishing a county mileage-based road usage charge.

     (c)  Each county may establish a per mile rate for a county mileage-based road usage charge that is:

     (1)  One or more cents, a fraction of a cent, or both; or

     (2)  Zero.

     (d)  If a county mileage-based road usage charge cannot be calculated because of missing, incomplete, or incorrect odometer reading information, a vehicle subject to the county mileage‑based road usage charge shall be subject to a default county mileage-based road usage charge as established by the county.

     §249-C  County mileage-based road usage charge; dispositions.  The county mileage-based road usage charge for each county shall be collected by the respective county and deposited into the respective county highway fund established pursuant to section 249-18; provided that amounts collected in the county of Maui on vehicle miles traveled on the island of Lanai shall be used solely for expenditures on the island of Lanai; provided further that the amounts collected in the county of Maui on vehicle miles traveled on the island of Molokai shall be used solely for expenditures on the island of Molokai."

     SECTION 3.  Section 248-9, Hawaii Revised Statutes, is amended to read as follows:

     "§248-9  State highway fund.  (a)  Moneys in the state highway fund may be expended for the following purposes:

     (1)  To pay the costs of operation, maintenance, and repair of the state highway system, including without limitation, the cost of equipment and general administrative overhead;

     (2)  To pay the costs of acquisition, including real property and interests therein; planning; designing; construction; and reconstruction of the state highway system and bikeways, including without limitation, the cost of equipment and general administrative overhead;

     (3)  To reimburse the general fund for interest on and principal of general obligation bonds issued to finance highway projects where the bonds are designated to be reimbursable out of the state highway fund;

     (4)  To pay the costs of construction, maintenance, and repair of county roads; provided that none of the funds expended on a county road or program shall be federal funds when expenditure would cause a violation of federal law or a federal grant agreement; and

     (5)  To pay the costs of establishing and maintaining a drug and alcohol toxicology testing laboratory that is intended to support the prosecution of offenses relating to operation of a motor vehicle while under the influence of an intoxicant.

     (b)  At any time, the director of transportation may transfer from the state highway fund all or any portion of available moneys determined by the director of transportation to exceed one hundred thirty-five per cent of the requirements for the ensuing twelve months for the state highway fund as permitted by and in accordance with section 37-53.  For purposes of the determination, the director of transportation shall take into consideration:

     (1)  The amount of federal funds and bond funds on deposit in, and budgeted to be expended from, the state highway fund during the period;

     (2)  Amounts on deposit in the state highway fund that are encumbered or otherwise obligated;

     (3)  Budgeted amounts payable from the state highway fund during the period;

     (4)  Revenues anticipated to be received by and expenditures to be made from the state highway fund during the period based on existing agreements and other information for the ensuing twelve months; and

     (5)  Any other factors as the director of transportation shall deem appropriate.

     [(c)  The department of transportation shall establish county subaccounts within the state highway fund. Notwithstanding subsections (a) and (b), funds in each county subaccount shall be expended for state highway road capacity projects in the respective county.

     For purposes of this subsection, "state highway road capacity project" means construction:

     (1)  Of a new road;

     (2)  To widen or add additional lanes to an existing road; or

     (3)  That increases the number of vehicles that may be driven on an island and alleviates the level of traffic congestion on existing roads of that island,

and any planning, design, or right-of-way acquisition related to the construction.]

     (c)  There is established within the state highway fund a state mileage-based road usage charge subaccount.  All fees, taxes, and charges collected by chapter 249 shall be deposited into a state mileage-based road usage subaccount under the state highway fund to be administered by the department of transportation; provided that funds may be used to pay for any expenditures in collaboration with the state mileage-based road usage charge including disbursements or reimbursements back to the vehicle owners."

     SECTION 4.  Section 249-18, Hawaii Revised Statutes, is amended to read as follows:

     "§249-18  Highway fund.  All taxes, fees, or charges collected under this chapter, except those collected pursuant to sections 249-14 and 249-14.5[,] and the state mileage-based road usage charge established under 249-36, shall be deposited in a county fund to be known as the "highway fund" and shall be expended in the county in which the taxes, fees, or charges are collected for the following purposes:

     (1)  For acquisition, designing, construction, improvement, repair, and maintenance of public roads and highways, including without restriction of the foregoing purposes, costs of new land therefor, of permanent storm drains or new bridges, as well as repairs or additions to storm drains or bridges;

     (2)  For installation, maintenance, and repair of street lights and power, and other charges for street lighting purposes, including replacement of old street lights, on county maintained public roads and highways;

     (3)  For purposes and functions connected with traffic control and preservation of safety upon the public highways and streets;

     (4)  For payment of interest on and redemption of bonds issued to finance highway and street construction and improvements;

     (5)  In the case of the city and county of Honolulu, for appropriation for the police department up to the sum of $500,000.  No expenditures shall be made out of this fund [which] that will jeopardize federal aid for highway construction;

     (6)  For purposes and functions connected with mass transit; and

     (7)  For the acquisition, design, construction, improvement, repair, and maintenance of bikeways."

     SECTION 5.  Section 249-36, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

     "(a)  Beginning July 1, 2025, in addition to all other fees and taxes levied by this chapter, electric vehicles shall be subject to a state mileage-based road usage charge.  The state mileage-based road usage charge shall be calculated by the county director of finance at the rate of 0.8 cents per mile traveled, multiplied by the number of miles traveled, less the estimated amount of paid state fuel taxes that correspond with the number of miles traveled.  The department shall adopt rules pursuant to chapter 91 to determine the method for calculating the estimated amount of paid state fuel taxes that correspond with the number of miles traveled.  The number of miles traveled shall be calculated as the difference between the vehicle's two most recent odometer readings, as noted on the vehicle's certificate of inspection pursuant to section 286-26(e).  The state mileage-based road usage charge shall be not less than $0, and, until June 30, 2028, the state mileage-based road usage charge shall be not more than $50 per year.  For the first registration renewal of new motor vehicles for which no certificate of inspection is required, the state mileage-based road usage charge assessed shall be $50, and [such] the amount once paid shall be subtracted from the calculation of the state mileage-based road usage charge upon that vehicle's second registration renewal.  If the state mileage-based road usage charge cannot be calculated because of missing, incomplete, or incorrect odometer reading information:

     (1)  Until June 30, 2028, a vehicle subject to the state mileage-based road usage charge is subject to a default state mileage-based road usage charge of $50; and

     (2)  Effective July 1, 2028, a vehicle subject to the state mileage-based road usage shall be subject to a default state mileage-based road usage charge of $80."

     SECTION 6.  Section 431:10C-103, Hawaii Revised Statutes, is amended by amending the definition of "motor vehicle" to read as follows:

     ""Motor vehicle" means any vehicle of a type required to be registered under chapter 286, including a trailer attached to [such] a vehicle, but not including motorcycles [and motor scooters]."

     SECTION 7.  Section 437D-3, Hawaii Revised Statutes, is amended by amending the definition of "vehicle license recovery fees" to read as follows:

     ""Vehicle license recovery fees" includes motor vehicle weight taxes under section 249-2; fees connected with the registration of specially constructed, reconstructed, or rebuilt vehicles, special interest vehicles, or imported vehicles as referenced in section 286-41(c); license plate and emblem fees under section 249-7(b); state and county mileage-based road usage charges under sections 249-36 and 249-A; inspection fees as referenced in section 286-26; highway beautification fees as referenced in section 286-51(b)(1); and any use tax under chapter 238."

     SECTION 8.  There is appropriated out of the state highway fund the sum of $           or so much thereof as may be necessary for fiscal year 2025-2026 for the implementation of the state mileage-based road usage charge program, to be used with available federal funds; provided that moneys appropriated pursuant to this section shall not lapse at the end of the fiscal year and any unexpended or unencumbered funds as of June 30, 2026, shall lapse into the state highway fund as of that date.

     The sum appropriated shall be expended by the department of transportation for the purposes of this Act.

     SECTION 9.  There is appropriated out of the state highway fund the sum of $           or so much thereof as may be necessary for fiscal year 2025-2026 to be used with $802,400 federal funds and the sum of $           or so much thereof as may be necessary for fiscal year 2026-2027 to be used with $1,542,480 federal funds, for the continued implementation of the state mileage-based road user charge established pursuant to section 249-36, Hawaii Revised Statutes; provided that the moneys appropriated for fiscal year 2025-2026 and fiscal year 2026-2027 for the purposes of this Act shall not lapse at the end of their respective fiscal year and any unexpended or unencumbered funds as of June 30, 2028, shall lapse into the state highway fund as of that date.

     The sums appropriated shall be expended by the department of transportation for the purposes of this Act.

     SECTION 10.  In codifying the new sections added by section 2 of this Act, the revisor of statutes shall substitute appropriate section numbers for the letters used in designating and referring to the new sections in this Act.

     SECTION 11.  Statutory material to be repealed is bracketed and stricken.  New statutory material is underscored.

     SECTION 12.  This Act shall take effect on July 1, 3000.

Report Title:

Department of Transportation; Electric Vehicles; State Mileage-Based Road Usage Charge; County Mileage-Based Road Usage Charge; State Highway Fund; Appropriation

Description:

Authorizes a county to impose a mileage-based road usage charge.  Provides and requires a county to establish the rate of the charge.  Clarifies the disposition of funds for state mileage-based road usage charge.  Repeals the requirement of the Department of Transportation to establish county subaccounts within the State Highway Fund.  Establishes the State Mileage-Based Road Usage Charge Subaccount within the State Highway Fund.  Clarifies the rate and calculation of the state mileage-based road usage charge.  Effective 7/1/3000.  (HD1)

The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.

A BILL FOR AN ACT

RELATING TO TRANSPORTATION.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

     SECTION 1.  The legislature finds that, as a means of addressing declining fuel tax revenues, the department of transportation supports the adoption of a per-mile road usage charge to provide fair and sustainable funding for the State's road infrastructure.  The legislature further finds that, with the existing vehicle inspection program, the State and counties are well-positioned to transition to a per-mile road usage charge with low administrative costs.  In 2023, the legislature enacted a small-scale per-mile road usage charge program for electric vehicles.  Beginning on July 1, 2025, drivers of electric vehicles will be provided a choice of paying a state road usage charge at a rate of 0.8 cents per mile traveled or paying a flat fee of no more than $50 per year.  This choice will be permitted until June 30, 2028, at which time all electric vehicles will pay a state road usage charge.  The number of miles will be calculated based on an odometer reading recorded during the motor vehicle safety inspection.  Finally, the legislature required the department of transportation to develop a plan to transition all vehicles in Hawaii to a per-mile road usage charge by 2033.  The legislature further finds that, in addition to the state fuel tax, counties rely on their own motor fuel tax to fund the maintenance and repair of county roads and bridges.  Like the state fuel tax, the county fuel tax is also declining, leaving counties with less revenue to maintain their roads and bridges.  The legislature now finds that counties may wish to begin transitioning to a mileage-based road usage charge as a fair and sustainable replacement for the county motor fuel tax.  The legislature finds that permitting counties to do this will result in lower administrative costs for the state and county agencies tasked with implementing the road usage charge and create more efficiency and simplicity for the traveling public as the State begins transitioning to a fair and sustainable source of transportation funding.

     The purposes of this Act are to:

     (1)  Establish a state mileage-based road usage charge subaccount within the state highway fund;

     (2)  Authorize counties to establish a county mileage-based road usage charge for electric vehicles beginning July 1, 2028;

     (3)  Establish a process for the counties to adopt a per-mile rate by ordinance;

     (4)  Clarify the use of moneys collected under the state and county road usage charges; and

     (5)  Clarify certain procedures when calculating the state and county road usage charge is not possible due to incomplete information.

     SECTION 2.  Chapter 249, Hawaii Revised Statutes, is amended by adding three new sections to be appropriately designated and to read as follows:

     "§249-A  County mileage-based road usage charge; established.  (a)  Beginning July 1, 2028, in addition to all other fees and taxes levied by this chapter, a county may impose a county mileage-based road usage charge on electric vehicles.

     (b)  The county mileage-based road usage charge shall be calculated by the director of finance at the rate established under section 249-B, multiplied by the number of miles traveled, less the estimated amount of paid county motor fuel taxes that correspond with the number of miles traveled, as shall be determined by rule.  The number of miles traveled shall be calculated as the difference between the electric vehicle's two most recent odometer readings, as noted on the electric vehicle's certificate of inspection issued pursuant to section 286-26(e).

     (c)  If a county establishes a mileage-based road usage charge pursuant to section 249-B, for the first registration renewal of new electric vehicles for which no certificate of inspection is required, the county mileage-based road usage charge assessed shall be $50, which shall be subtracted from the calculation of the county mileage-based road usage charge upon that electric vehicle's second registration renewal.

     (d)  The county mileage-based road usage charge shall be paid each year following the electric vehicle's most recent inspection together with all other taxes and fees levied by this chapter on a staggered basis as established by each county as authorized by section 286-51 to ensure that the county mileage-based road usage charge is due and payable at the same time and shall be collected together with the county registration fee. The county mileage-based road usage charge shall be deemed delinquent if not paid with the county registration fee.

     (e)  Notwithstanding subsection (a), all electric vehicles registered in the State that qualify for an exemption under sections 249-4, 249-5.5, 249-6, and 249-6.5 shall be exempt from this section.

     (f)  Each county may adopt rules pursuant to chapter 91 for establishing and administering the county mileage-based road usage charge.

     (g)  For the purposes of this section, "electric vehicle" has the same meaning as defined in section 249-36.

     §249-B  County mileage-based road usage charge; rate; establishment.  (a)  Each county shall establish the rate to be used to calculate the amount of that county's mileage-based road usage charge in the manner provided for ordinances involving the expenditure of public funds; provided that until such rate is established, the county mileage-based road usage charge for each county shall be zero.

     (b)  No ordinance establishing the rate for a county mileage-based road usage charge shall be adopted until a public hearing on the proposed rate for the county mileage-based road usage charge has been held.  Public notice of the hearing shall be given at least twice within the thirty-day period immediately preceding the date of the hearing.  The rate for the county mileage-based road usage charge shall take effect on the first day of the second month following the adoption of an ordinance establishing a county mileage-based road usage charge.

     (c)  Each county may establish a per mile rate for a county mileage-based road usage charge that is:

     (1)  One or more cents, a fraction of a cent, or both; or

     (2)  Zero.

     (d)  If a county mileage-based road usage charge cannot be calculated because of missing, incomplete, or incorrect odometer reading information, a vehicle subject to the county mileage-based road usage charge is subject to a default county mileage-based road usage charge as established by the county.

     §249-C  County mileage-based road usage charge; dispositions.  The county mileage-based road usage charge for each county shall be collected by the respective county and deposited into the respective county highway fund established pursuant to section 249-18; provided that amounts collected in the county of Maui on vehicle miles traveled on the island of Lanai shall be used solely for expenditures on the island of Lanai; provided further that the amounts collected in the county of Maui on vehicle miles traveled on the island of Molokai shall be used solely for expenditures on the island of Molokai."

     SECTION 3.  Section 248-9, Hawaii Revised Statutes, is amended to read as follows:

     "§248-9  State highway fund.  (a)  Moneys in the state highway fund may be expended for the following purposes:

     (1)  To pay the costs of operation, maintenance, and repair of the state highway system, including without limitation, the cost of equipment and general administrative overhead;

     (2)  To pay the costs of acquisition, including real property and interests therein; planning; designing; construction; and reconstruction of the state highway system and bikeways, including without limitation, the cost of equipment and general administrative overhead;

     (3)  To reimburse the general fund for interest on and principal of general obligation bonds issued to finance highway projects where the bonds are designated to be reimbursable out of the state highway fund;

     (4)  To pay the costs of construction, maintenance, and repair of county roads; provided that none of the funds expended on a county road or program shall be federal funds when expenditure would cause a violation of federal law or a federal grant agreement; [and]

     (5)  To pay the costs of establishing and maintaining a drug and alcohol toxicology testing laboratory that is intended to support the prosecution of offenses relating to operation of a motor vehicle while under the influence of an intoxicant.

     (b)  At any time, the director of transportation may transfer from the state highway fund all or any portion of available moneys determined by the director of transportation to exceed one hundred thirty-five per cent of the requirements for the ensuing twelve months for the state highway fund as permitted by and in accordance with section 37-53.  For purposes of the determination, the director of transportation shall take into consideration:

     (1)  The amount of federal funds and bond funds on deposit in, and budgeted to be expended from, the state highway fund during the period;

     (2)  Amounts on deposit in the state highway fund that are encumbered or otherwise obligated;

     (3)  Budgeted amounts payable from the state highway fund during the period;

     (4)  Revenues anticipated to be received by and expenditures to be made from the state highway fund during the period based on existing agreements and other information for the ensuing twelve months; and

     (5)  Any other factors as the director of transportation shall deem appropriate.

     [(c)  The department of transportation shall establish county subaccounts within the state highway fund. Notwithstanding subsections (a) and (b), funds in each county subaccount shall be expended for state highway road capacity projects in the respective county.

     For purposes of this subsection, "state highway road capacity project" means construction:

     (1)  Of a new road;

     (2)  To widen or add additional lanes to an existing road; or

     (3)  That increases the number of vehicles that may be driven on an island and alleviates the level of traffic congestion on existing roads of that island,

and any planning, design or right-of-way acquisition related to the construction.]

     (c)  The department of transportation shall establish a state mileage-based road usage charge subaccount within the state highway fund."

     SECTION 4.  Section 249-18, Hawaii Revised Statutes, is amended to read as follows:

     "§249-18  Highway fund.  All taxes, fees, or charges collected under this chapter, except those collected pursuant to sections 249-14 and 249-14.5[,] and the state mileage-based road usage charge established under 249-36, shall be deposited in a county fund to be known as the "highway fund" and shall be expended in the county in which the taxes, fees, or charges are collected for the following purposes:

     (1)  For acquisition, designing, construction, improvement, repair, and maintenance of public roads and highways, including without restriction of the foregoing purposes, costs of new land therefor, of permanent storm drains or new bridges, as well as repairs or additions to storm drains or bridges;

     (2)  For installation, maintenance, and repair of street lights and power, and other charges for street lighting purposes, including replacement of old street lights, on county maintained public roads and highways;

     (3)  For purposes and functions connected with traffic control and preservation of safety upon the public highways and streets;

     (4)  For payment of interest on and redemption of bonds issued to finance highway and street construction and improvements;

     (5)  In the case of the city and county of Honolulu, for appropriation for the police department up to the sum of $500,000.  No expenditures shall be made out of this fund [which] that will jeopardize federal aid for highway construction;

     (6)  For purposes and functions connected with mass transit; and

     (7)  For the acquisition, design, construction, improvement, repair, and maintenance of bikeways."

     SECTION 5.  Section 249-36, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

     "(a)  Beginning July 1, 2025, in addition to all other fees and taxes levied by this chapter, electric vehicles shall be subject to a state mileage-based road usage charge.  The state mileage-based road usage charge shall be calculated by the county director of finance at the rate of 0.8 cents per mile traveled, multiplied by the number of miles traveled, less the estimated amount of paid state fuel taxes that correspond with the number of miles traveled.  The department shall adopt rules pursuant to chapter 91 to determine the method for calculating the estimated amount of paid state fuel taxes that correspond with the number of miles traveled.  The number of miles traveled shall be calculated as the difference between the vehicle's two most recent odometer readings, as noted on the vehicle's certificate of inspection pursuant to section 286-26(e).  The state mileage-based road usage charge shall be not less than $0, and, until June 30, 2028, the state mileage-based road usage charge shall be not more than $50 per year.  For the first registration renewal of new motor vehicles for which no certificate of inspection is required, the state mileage-based road usage charge assessed shall be $50, and [such] the amount once paid shall be subtracted from the calculation of the state mileage-based road usage charge upon that vehicle's second registration renewal.  If the state mileage-based road usage charge cannot be calculated because of missing, incomplete, or incorrect odometer reading information:

     (1)  Until June 30, 2028, a vehicle subject to the state mileage-based road usage charge is subject to a default state mileage-based road usage charge of $50; and

     (2)  Effective July 1, 2028, a vehicle subject to the state mileage-based road usage shall be subject to a default state mileage-based road usage charge of $80.

There is established within the state highway fund a state mileage-based road usage charge subaccount.  All fees, taxes, and charges collected by this chapter shall be deposited into a state mileage-based road usage subaccount under the state highway fund to be administered by the department of transportation; provided that funds can be used to pay for any expenditures in collaboration with the state mileage-based road usage charge including disbursements or reimbursements back to the vehicle owners."

     SECTION 6.  Section 431:10C-103, Hawaii Revised Statutes, is amended by amending the definition of "motor vehicle" to read as follows:

     ""Motor vehicle" means any vehicle of a type required to be registered under chapter 286, including a trailer attached to [such] a vehicle, but not including motorcycles [and motor scooters]."

     SECTION 7.  Section 437D-3, Hawaii Revised Statutes, is amended by amending the definition of "vehicle license recovery fees" to read as follows:

     ""Vehicle license recovery fees" includes motor vehicle weight taxes under section 249-2; fees connected with the registration of specially constructed, reconstructed, or rebuilt vehicles, special interest vehicles, or imported vehicles as referenced in section 286-41(c); license plate and emblem fees under section 249-7(b); state and county mileage-based road usage charges under sections 249-36 and 249-A; inspection fees as referenced in section 286-26; highway beautification fees as referenced in section 286-51(b)(1); and any use tax under chapter 238."

     SECTION 8.  There is appropriated out of the state highway fund the sum of $1,700,000 or so much thereof as may be necessary for fiscal year 2024-2025 to be used with available federal funds, for the implementation of the state mileage-based road usage charge program; provided that the moneys appropriated for fiscal year 2024-2025 for the purposes of this Act shall not lapse at the end of the fiscal year; provided further that all moneys appropriated for fiscal year 2024-2025 that are unexpended or unemcumbered as of June 30, 2026, shall lapse into the state highway fund.

     The sum appropriated shall be expended by the department of transportation for the purposes of this Act.

     SECTION 9.  There is appropriated out of the state highway fund the sum of $200,600 or so much thereof as may be necessary for fiscal year 2025-2026 to be used with $802,400 federal funds and the sum of $385,620 or so much thereof as may be necessary for fiscal year 2026-2027 to be used with $1,542,480 federal funds, for the continued implementation of the state mileage-based road user charge established pursuant to section 249-36, Hawaii Revised Statutes; provided that the moneys appropriated for fiscal year 2025-2026 and fiscal year 2026-2027 for the purposes of this Act shall not lapse at the end of their respective fiscal year; provided further that all moneys appropriated for fiscal year 2025-2026 and fiscal year 2026-2027 that are unexpended or unencumbered as of June 30, 2028, shall lapse into the state highway fund.

     The sums appropriated shall be expended by the department of transportation for the purposes of this Act.

     SECTION 10.  In codifying the new sections added by section 2 of this Act, the revisor of statutes shall substitute appropriate section numbers for the letters used in designating and referring to the new sections in this Act.

     SECTION 11.  Statutory material to be repealed is bracketed and stricken.  New statutory material is underscored.

     SECTION 12.  This Act shall take effect upon its approval.

Report Title:

Department of Transportation; Electric Vehicles; State Mileage-Based Road Usage Charge; County Mileage-Based Road Usage Charge

Description:

Provides authority for a county to impose a mileage-based road usage charge.  Provides for disposition of funds of county mileage-based road usage charge.  Clarifies the disposition of funds of state mileage-based road usage charge.  Repeals the maximum amount a driver will pay in a state mileage-based road usage charge on June 30, 2028.  Establishes a default state mileage-based road usage charge rate when missing, incomplete, or incorrect odometer reading information that will prevent the state mileage-based road usage charge from being calculated.  Establishes a state mileage-based road usage charge subaccount to allow for the disbursements or reimbursements back to vehicle owners.

The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.

STAND. COM. REP. NO. 1829

Honolulu, Hawaii

RE:    H.B. No. 1161

       H.D. 2

       S.D. 1

Honorable Ronald D. Kouchi

President of the Senate

Thirty-Third State Legislature

Regular Session of 2025

State of Hawaii

Sir:

     Your Committee on Ways and Means, to which was referred H.B. No. 1161, H.D. 2, S.D. 1, entitled:

"A BILL FOR AN ACT RELATING TO TRANSPORTATION,"

begs leave to report as follows:

     The purpose and intent of this measure is to support the adoption of state and county mileage-based road usage charges.

     More specifically, the measure:

     (1)  Authorizes the counties to impose a mileage-based road usage charge for electric vehicles, beginning July 1, 2028;

     (2)  Repeals the requirement that the Department of Transportation establish county subaccounts within the state highway fund;

     (3)  Clarifies the disposition of funds from the state mileage-based road usage charge;

     (4)  Clarifies the calculation and rate of the state mileage‑based road usage charge;

     (5)  Expands the authorized uses of the state highway fund and highway fund; and

     (6)  Appropriates moneys for the implementation of the state mileage-based road usage charge.

     Your Committee received written comments in support of this measure from the Hawaii State Energy Office, Department of Transportation, Maui County Council, Hawaii State Association of Counties, County of Kauai, City and County of Honolulu Department of Customer Services, Oahu Metropolitan Planning Organization, and Ulupono Initiative.

     Your Committee received written comments in opposition to this measure from two individuals.

     Your Committee received written comments on this measure from The Hertz Corporation; Hawaii Electric Vehicle Association; Avis Budget Car Rental, LLC; Alliance for Automotive Innovation; Tax Foundation of Hawaii; Enterprise Mobility; Servco Pacific Inc.; and one individual.

     Your Committee finds that shifting away from traditional fuel taxes and toward mileage-based road usage charges, as supported by this measure, will help ensure the financial sustainability of Hawaii's transportation system as the use of electric vehicles in the State increases.

     Your Committee requests, if a Committee on Conference is convened on this measure, that the Committee on Conference consider the following amendments, requested by the Department of Transportation:

     (1)  Delete page 3, lines 6-7 of the measure, specifically paragraph (4), which refers to the extension of the state mileage-based road usage charge to plug-in hybrid electric vehicles;

     (2)  Amend page 5, line 15 to page 6, line 2, to read as follows:

     "§249-B  County mileage-based road usage charge; rate; establishment.  (a)  Each county shall establish the rate to be used to calculate the amount of that county's mileage-based road usage charge in the manner provided for by ordinances involving the expenditure of public funds; provided that until such rate is established, the county mileage-based road usage charge for that county shall be zero.  The rate of the county road usage charge shall be no greater than the equivalent per-mile amount paid in county motor fuel tax by the average motor fuel-powered, light‑duty vehicle in the county in the twelve months following the last increase in the county motor fuel tax rate."

     (3)  Delete section 7 of the measure (page 15, lines 1-11); and

     (4)  Amend section 8 of the measure (page 15, line 12 to page 16, line 5) to read as follows:

"SECTION 8.  There is appropriated out of the state highway fund the sum of $5,332,800 or so much thereof as may be necessary for fiscal year 2025-2026 to be used with available federal funds and the sum of $3,175,600 or so much thereof as may be necessary for fiscal year 2026-2027 to be used with federal funds, for the continued implementation of the state mileage-based road usage charge established pursuant to section 249-36, Hawaii Revised Statutes; provided that the appropriations made for the purposes of this Act shall not lapse at the end of the fiscal biennium for which the appropriations are made; provided further that all moneys from the appropriation unencumbered as of June 30, 2028, shall lapse to the state highway fund.

     The sums appropriated shall be expended by the department of transportation for the purposes of this Act."

     As affirmed by the record of votes of the members of your Committee on Ways and Means that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 1161, H.D. 2, S.D. 1, and recommends that it pass Third Reading.

Respectfully submitted on behalf of the members of the Committee on Ways and Means,

STAND. COM. REP. NO. 1315

Honolulu, Hawaii

RE:    H.B. No. 1161

       H.D. 2

       S.D. 1

Honorable Ronald D. Kouchi

President of the Senate

Thirty-Third State Legislature

Regular Session of 2025

State of Hawaii

Sir:

     Your Committees on Transportation and Culture and the Arts and Energy and Intergovernmental Affairs, to which was referred H.B. No. 1161, H.D. 2, entitled:

"A BILL FOR AN ACT RELATING TO TRANSPORTATION,"

beg leave to report as follows:

     The purpose and intent of this measure is to:

     (1)  Beginning July 1, 2028, authorize a county to impose a mileage-based road usage charge on electric vehicles and plug-in hybrid electric vehicles;

     (2)  Provide and require a county to establish the rate of the road usage charge;

     (3)  Repeal the requirement for the Department of Transportation to establish county subaccounts within the State Highway Fund;

     (4)  Clarify the disposition of funds for the state mileage‑based road usage charge;

     (5)  Beginning July 1, 2026, extend the state mileage-based road usage charge to plug-in hybrid electric vehicles;

     (6)  Clarify the rate and calculation of the state mileage-based road usage charge;

     (7)  Specify that rental motor vehicle companies may visibly pass the costs of the mileage-based road usage charges to the consumer; and

     (8)  Appropriate funds.

     Your Committees received testimony in support of this measure from the Department of Transportation, Hawaiʻi State Energy Office, Hawaiʻi State Association of Counties, Office of the Mayor of the County of Kauaʻi, Department of Customer Services of the City and County of Honolulu, one member of the Kauaʻi County Council, one member of the Maui County Council, Oahu Metropolitan Planning Organization, Ulupono Initiative, and one individual.

     Your Committees received testimony in opposition to this measure from the Libertarian Party of Hawaii and two individuals.

     Your Committees received comments on this measure from the Tax Foundation of Hawaii; Alliance for Automotive Innovation; Avis Budget Car Rental, LLC., Enterprise Mobility; Hertz Corporation; and Servco Pacific Inc.

     Your Committees find that as electric vehicle usage increases, the State and counties face declining fuel tax revenues.  Your Committees further find that in addition to the state fuel tax, the counties rely on their own fuel taxes to fund necessary maintenance of roads and bridges in each county's jurisdiction.  Your Committees believe that authorizing the counties to transition to a mileage-based road usage charge from a motor fuel tax will result in lower administrative costs for state and county agencies tasked with implementing the road usage charge and create more efficiency and simplicity for the traveling public as the State begins transitioning to a fair and sustainable source of transportation funding.

     Accordingly, your Committees have amended this measure by:

     (1)  Deleting language that would have included plug-in hybrid vehicles in the county mileage-road usage charge;

     (2)  Clarifying that the county mileage-based road usage charge shall be comparable to the county fuel tax and no more than the estimated county fuel tax;

     (3)  Inserting language that allows the State Highway Fund to be used for:

          (A)  Infrastructure and related appurtenances for ground transportation facilities;

          (B)  The purposes and functions connected with traffic control and preservation of safety upon the public highways and streets; and

          (C)  Other measures to reduce vehicle miles traveled;

     (4)  Inserting language that allows the Highway Fund to be used for:

          (A)  The acquisition, design, construction, improvement, repair, and maintenance of walkways; and

          (B)  Other measures to reduce vehicle miles traveled;

     (5)  Amending section 1 to reflect its amended purpose; and

     (6)  Making technical, nonsubstantive amendments for the purposes of clarity and consistency.

     As affirmed by the records of votes of the members of your Committees on Transportation and Culture and the Arts and Energy and Intergovernmental Affairs that are attached to this report, your Committees are in accord with the intent and purpose of H.B. No. 1161, H.D. 2, as amended herein, and recommend that it pass Second Reading in the form attached hereto as H.B. No. 1161, H.D. 2, S.D. 1, and be referred to your Committee on Ways and Means.

Respectfully submitted on behalf of the members of the Committees on Transportation and Culture and the Arts and Energy and Intergovernmental Affairs,

STAND. COM. REP. NO.  934

Honolulu, Hawaii

                , 2025

RE:   H.B. No. 1161

      H.D. 2

Honorable Nadine K. Nakamura

Speaker, House of Representatives

Thirty-Third State Legislature

Regular Session of 2025

State of Hawaii

Madame:

     Your Committee on Finance, to which was referred H.B. No. 1161, H.D. 2, entitled:

"A BILL FOR AN ACT RELATING TO TRANSPORTATION,"

begs leave to report as follows:

     The purpose of this measure is to:

     (1)  Beginning July 1, 2028, authorize a county to impose a mileage-based road usage charge for electric vehicles and plug-in hybrid electric vehicles;

     (2)  Repeal the requirement for the Department of Transportation to establish county subaccounts within the State Highway Fund;

     (3)  Clarify the disposition of funds for the state mileage-based road usage charge;

     (4)  Beginning July 1, 2026, extend the state mileage-based road-usage charge to plug-in hybrid electric vehicles;

     (5)  Clarify the rate and calculation of the state mileage-based road usage charge;

     (6)  Specify that rental motor vehicle companies may visibly pass on the costs of the mileage-based road usage charges to the consumer; and

     (7)  Appropriate funds for the State Mileage-based Road Usage Charge Program and continued implementation of the state mileage-based road user charge.

     Your Committee received testimony in support of this measure from the Hawaiʻi State Energy Office; one member of the Kauaʻi County Council; two members of the Maui County Council; and Department of Customer Services of the City and County of Honolulu.  Your Committee received comments on this measure from the Department of Transportation; Office of the Mayor of the County of Kauaʻi; Office of the Mayor of the County of Maui; one member of the Hawaiʻi County Council; Hawaii Electric Vehicle Association; Alliance for Automotive Innovation; Oahu Metropolitan Planning Organization; Ulupono Initiative; Avis Budget Group; Enterprise Mobility; Servco Pacific Inc.; Tax Foundation of Hawaii; Hertz Corporation; and one individual.

     As affirmed by the record of votes of the members of your Committee on Finance that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 1161, H.D. 2, and recommends that it pass Third Reading.

Respectfully submitted on behalf of the members of the Committee on Finance,

STAND. COM. REP. NO.  614

Honolulu, Hawaii

                , 2025

RE:   H.B. No. 1161

      H.D. 2

Honorable Nadine K. Nakamura

Speaker, House of Representatives

Thirty-Third State Legislature

Regular Session of 2025

State of Hawaii

Madame:

     Your Committee on Consumer Protection & Commerce, to which was referred H.B. No. 1161, H.D. 1, entitled:

"A BILL FOR AN ACT RELATING TO TRANSPORTATION,"

begs leave to report as follows:

     The purpose of this measure is to:

     (1)  Beginning July 1, 2028, authorize counties to impose a county mileage-based road usage charge for electric vehicles;

     (2)  Clarify the collection and disposition of funds from the state and county mileage-based road usage charges, including the establishment of a State Mileage-Based Road Usage Charge Subaccount;

     (3)  Clarify the rate for the state mileage-based road usage charge in the event the odometer information is missing, incomplete, or incorrect;

     (4)  Subject motor scooters to motor vehicle insurance requirements;

     (5)  Specify that rental motor vehicle companies may visibly pass to the consumer the costs of the state and county mileage-based road usage charges; and

     (6)  Appropriate funds.

     Your Committee received testimony in support of this measure from the Department of Transportation; Hawaiʻi State Energy Office; Department of Customer Services of the City and County of Honolulu; Office of the Mayor of the County of Kauaʻi; one member of the Hawaiʻi County Council; two members of the Maui County Council; Ulupono Initiative; Oahu Metropolitan Planning Organization; and one individual.  Your Committee received comments on this measure from the Department of Commerce and Consumer Affairs; Hawaii Electric Vehicle Association; Tax Foundation of Hawaii; Alliance for Automotive Innovation; and Hawaii Food Industry Association.

     Your Committee finds that the increasing popularity of electric vehicles has presented opportunities and challenges for Hawaii's transportation infrastructure.  The State's fuel tax revenue, which funds necessary road maintenance and infrastructure, is declining as more of the State's residents adopt electric vehicles.  To address the loss of fuel tax revenue, Act 222, Session Laws of Hawaii 2023, enacted a mileage-based road usage charge on electric vehicles to establish a fair and sustainable means of funding for the maintenance and improvement of roadways owned and maintained by the State.  Your Committee further finds that the counties are facing a similar decline in county fuel tax revenue, leading to a shortfall in funding for the maintenance of county road infrastructure.  This measure is intended to establish a mileage-based road usage charge on the county level to ensure that county roads and bridges are safe and accessible as Hawaii begins transitioning to a fair and sustainable source of transportation funding.

     Your Committee also finds that plug-in hybrid electric vehicles, like electric vehicles, contribute to the declining fuel tax revenue since plug-in hybrid electric vehicles operate with minimal fuel consumption.  Consequently, your Committee believes that plug-in hybrid electric vehicles should be subject to the state mileage-based road usage charge sooner than 2033, when the Department of Transportation is tasked with submitting a plan for transitioning all passenger vehicles and light-duty trucks to the state mileage-based road usage charge.

     Accordingly, your Committee has amended this measure by:

     (1)  Extending the authorization for county mileage-based road usage charges to plug-in hybrid electric vehicles;

     (2)  Defining "plug-in hybrid electric vehicle";

     (3)  Clarifying that the county mileage-based road usage charge is to be paid each year following an electric vehicle's or a plug-in hybrid electric vehicle's most recent inspection, rather than registration;

     (4)  Deleting the creation of the State Mileage-Based Road Usage Charge Subaccount;

     (5)  Beginning July 1, 2026, extending the state mileage-based road usage charge to plug-in hybrid electric vehicles;

     (6)  Deleting language that subjected motor scooters to the State's motor vehicle insurance requirements; and

     (7)  Making technical, nonsubstantive amendments for the purposes of clarity, consistency, and style.

     As affirmed by the record of votes of the members of your Committee on Consumer Protection & Commerce that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 1161, H.D. 1, as amended herein, and recommends that it be referred to your Committee on Finance in the form attached hereto as H.B. No. 1161, H.D. 2.

Respectfully submitted on behalf of the members of the Committee on Consumer Protection & Commerce,

STAND. COM. REP. NO.  117

Honolulu, Hawaii

                , 2025

RE:   H.B. No. 1161

      H.D. 1

Honorable Nadine K. Nakamura

Speaker, House of Representatives

Thirty-Third State Legislature

Regular Session of 2025

State of Hawaii

Madame:

     Your Committee on Transportation, to which was referred H.B. No. 1161 entitled:

"A BILL FOR AN ACT RELATING TO TRANSPORTATION,"

begs leave to report as follows:

     The purpose of this measure is to:

     (1)  Establish a State Mileage-Based Road Usage Charge Subaccount within the State Highway Fund;

     (2)  Authorize counties to establish a county mileage-based road usage charge for electric vehicles beginning July 1, 2028;

     (3)  Establish a process for the counties to adopt a per-mile rate by ordinance;

     (4)  Clarify the use of monies collected under the state and county road usage charges;

     (5)  Set a default state and county road usage charge when the charge cannot be calculated due to incomplete information; and

     (6)  Appropriate funds.

     Your Committee received testimony in support of this measure from the Department of Transportation; one member of the Maui County Council; and Department of Customer Services of the City and County of Honolulu.  Your Committee received testimony in opposition to this measure from two individuals.  Your Committee received comments on this measure from the Tax Foundation of Hawaii and Alliance for Automotive Innovation.

     Your Committee finds that in 2023, the Legislature enacted a small-scale per-mile road usage charge program for electric vehicles.  This measure would build off the success of the 2023 program and allow, among other things, the counties to begin transitioning to a mileage-based road usage charge as a replacement for the county motor fuel tax.

     Your Committee has amended this measure by:

     (1)  Clarifying that the county mileage-based road usage charge is paid each year following the most recent registration, rather than inspection;

     (2)  Changing the appropriations to unspecified amounts;

     (3)  Updating the fiscal year for the appropriation for the implementation of the State Mileage-Based Road Usage Charge Program;

     (4)  Changing the effective date to July 1, 3000, to encourage further discussion; and

     (5)  Making technical, nonsubstantive amendments for the purposes of clarity, consistency, and style.

     Your Committee respectfully requests your Committee on Finance, should it deliberate on this measure, to consider the following appropriation amounts:

     (1)  $1,700,000 for the implementation of the State Mileage-Based Road Usage Charge Program; and

     (2)  $200,600 for fiscal year 2025-2026 and $1,542,480 for fiscal year 2026-2027 for the continued implementation of the State Mileage-Based Road Usage Charge.

     As affirmed by the record of votes of the members of your Committee on Transportation that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 1161, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 1161, H.D. 1, and be referred to your Committee on Consumer Protection & Commerce.

Respectfully submitted on behalf of the members of the Committee on Transportation,