THE SENATE
S.B. NO.
1244
THIRTY-THIRD LEGISLATURE, 2025
STATE OF HAWAII
A BILL FOR AN ACT
relating to roads.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
SECTION 1. Section 46-16.8, Hawaii Revised Statutes, is amended to read as follows:
"§46-16.8 County surcharge on state tax. (a) Each county may establish a surcharge on state tax at the rates enumerated in sections 237-8.6 and 238-2.6. A county electing to establish this surcharge shall do so by ordinance; provided that:
(1) No ordinance shall be adopted until the county has conducted a public hearing on the proposed ordinance;
(2) The ordinance shall be adopted before December 31, 2005; and
(3) No county surcharge on state tax that may be authorized under this subsection shall be levied before January 1, 2007, or after December 31, 2022, unless extended pursuant to subsection (b).
Notice of the public hearing required under paragraph (1) shall be published in a newspaper of general circulation within the county at least twice within a period of thirty days immediately preceding the date of the hearing.
A county electing to exercise the authority granted under this subsection shall notify the director of taxation within ten days after the county has adopted a surcharge on state tax ordinance and, beginning no earlier than January 1, 2007, the director of taxation shall levy, assess, collect, and otherwise administer the county surcharge on state tax.
(b) Each county that has established a surcharge on state tax before July 1, 2015, under authority of subsection (a) may extend the surcharge until December 31, 2030, at the same rates. A county electing to extend this surcharge shall do so by ordinance; provided that:
(1) No ordinance shall be adopted until the county has conducted a public hearing on the proposed ordinance; and
(2) The ordinance shall be adopted before January 1, 2018.
A county electing to exercise the authority granted under this subsection shall notify the director of taxation within ten days after the county has adopted an ordinance extending the surcharge on state tax. The director of taxation shall levy, assess, collect, and otherwise administer the extended surcharge on state tax.
(c) Each county that has not established a surcharge pursuant to subsection (a) on state tax before July 1, 2015, may establish the surcharge at the rates enumerated in sections 237‑8.6 and 238-2.6. A county electing to establish this surcharge shall do so by ordinance; provided that:
(1) No ordinance shall be adopted until the county has conducted a public hearing on the proposed ordinance;
(2) The ordinance shall be adopted before December 31, 2023; and
(3) No county surcharge on state tax that may be authorized under this subsection shall be levied before January 1, 2019, or after December 31, 2030.
A county electing to exercise the authority granted under this subsection shall notify the director of taxation within ten days after the county has adopted a surcharge on state tax ordinance. Beginning on January 1, 2019, January 1, 2020, January 1, 2024, or January 1, 2025, as applicable pursuant to sections 237-8.6 and 238-2.6, the director of taxation shall levy, assess, collect, and otherwise administer the county surcharge on state tax.
(d) Each county that has established a surcharge on state tax before March 31, 2019, under subsection (a) or (c) may amend the surcharge ordinance to change the authorized uses of surcharge revenues, pursuant to subsection (g); provided that:
(1) No ordinance shall be amended pursuant to this section until the county has conducted a public hearing on the proposed amendment; and
(2) The ordinance shall be amended before December 31, 2023.
(e) Notice of the public hearing required under subsection (b), (c), or (d), before adoption or amendment of an ordinance establishing or extending the surcharge on state tax shall be published in a newspaper of general circulation within the county at least twice within a period of thirty days immediately preceding the date of the hearing.
(f) Each county with a population greater than five hundred thousand that adopts or extends a county surcharge on state tax ordinance pursuant to subsection (a) or (b) shall use the surcharge revenues received from the State for capital costs of a locally preferred alternative for a mass transit project; provided that revenues derived from the county surcharge on state tax shall not be used:
(1) To build or repair public roads or highways, bicycle paths, or support public transportation systems already in existence before July 12, 2005;
(2) For operating costs or maintenance costs of the mass transit project or any purpose not consistent with this subsection; or
(3) For administrative or operating, marketing, or maintenance costs, including personnel costs, of a rapid transportation authority charged with the responsibility for constructing, operating, or maintaining the mass transit project;
provided further that nothing in this section shall be construed to prohibit a county from using county funds that are not derived from a surcharge on state tax for a purpose described in paragraph (2) or (3).
(g) Each county having a population equal to or less than five hundred thousand that adopts a county surcharge on state tax ordinance pursuant to this section shall use the surcharges received from the State for:
(1) Operating or capital costs of public transportation within each county for public transportation systems, including:
(A) Public roadways or highways;
(B) [Underlined: Private roadways that are open to and used by the public;]
[Underlined: (C)] Public buses;
[[Struck through: (C)]] [Underlined: (D)] Trains;
[[Struck through: (D)]] [Underlined: (E)] Ferries;
[[Struck through: (E)]] [Underlined: (F)] Pedestrian paths or sidewalks; or
[[Struck through: (F)]] [Underlined: (G)] Bicycle paths;
(2) Expenses in complying with the Americans with Disabilities Act of 1990 with respect to paragraph (1); and
(3) Housing infrastructure costs; provided that a county that uses surcharge revenues for housing infrastructure shall not pass on those housing infrastructure costs to the developer of a housing project; provided further that this paragraph shall apply only if a county amended its surcharge ordinance pursuant to subsection (d) or adopts a county surcharge on state tax ordinance after December 31, 2022;
provided that each county having a population equal to or less than five hundred thousand that adopts a county surcharge on state tax ordinance pursuant to this section after December 31, 2022, shall use the surcharge revenues received from the State only for the purposes described in paragraph (3) for county-appropriated housing infrastructure costs.
[Underlined: (h) Each county that adopts a county surcharge on state tax ordinance pursuant to this section may use the surcharges received from the State for the maintenance of privately-owned roadways that are open to the public.]
[[Struck through: (h)]] [Underlined: (i)] As used in this section:
"Capital costs" means nonrecurring costs required to construct a transit facility or system, including debt service, costs of land acquisition and development, acquiring of rights‑of-way, planning, design, and construction, and including equipping and furnishing the facility or system. For a county with a population greater than five hundred thousand, capital costs also include non-recurring personal services and other overhead costs that are not intended to continue after completion of construction of the minimum operable segment of the locally preferred alternative for a mass transit project.
"Housing infrastructure costs" includes pedestrian paths or sidewalks on a county road near or around a public school, and water, drainage, sewer, water reuse, waste disposal, and waste treatment systems that connect to the infrastructure of the county and shall include financing costs, including any related debt service and financing agreement costs."
SECTION 2. Section 243-6, Hawaii Revised Statutes, is amended to read as follows:
"§243-6 Fuel taxes, dispositions. [Underlined: (a)] The [[Struck through: "]]city and county of Honolulu fuel tax[[Struck through: "]] shall be paid by the department of taxation into the state treasury, and shall, by the state director of finance, be paid over to the director of finance of the city and county of Honolulu for deposit into the [[Struck through: fund known as the "]]highway fund[[Struck through: "]] created by section 249-18.
[Underlined: (b)] The [[Struck through: "]]county of Kauai fuel tax[[Struck through: "]] shall be paid by the department into the state treasury, and shall, by the state director of finance, be paid over to the director of finance of the county of Kauai for deposit into the [[Struck through: fund known as the "]]highway fund[[Struck through: "]] created by section 249-18.
[Underlined: (c)] The [[Struck through: "]]county of Hawaii fuel tax[[Struck through: "]] shall be paid by the department into the state treasury, and shall, by the state director of finance, be paid over to the director of finance of the county of Hawaii for deposit into the [[Struck through: fund known as the "]]highway fund[[Struck through: "]] created by section 249-18.
[Underlined: (d)] The [[Struck through: "]]county of Maui fuel tax[[Struck through: "]] collected on account of liquid fuel sold or used on the island of Lanai or sold elsewhere for ultimate use on the island of Lanai, shall be paid by the department into the state treasury, and shall, by the state director of finance, be paid over to the director of finance of the county of Maui for deposit into the [[Struck through: fund known as the "]]highway fund[[Struck through: "]] created by section 249-18, for expenditure on the island of Lanai. The [[Struck through: "]]county of Maui fuel tax[[Struck through: "]] collected on account of liquid fuel sold or used on the island of Molokai or sold elsewhere for ultimate use on the island of Molokai, shall be paid by the department into the state treasury, and shall, by the state director of finance, be paid over to the director of finance of the county of Maui for deposit into the [[Struck through: fund known as the "]]highway fund[[Struck through: "]] created by section 249-18, for expenditure on the island of Molokai. The remainder of the [[Struck through: "]]county of Maui fuel tax[[Struck through: "]] shall be paid by the department into the state treasury, and shall, by the state director of finance, be paid over to the director of finance of the county of Maui for deposit into the [[Struck through: fund known as the "]]highway fund[[Struck through: "]] created by section 249-18.
[Underlined: (e)] Each of the [[Struck through: foregoing]] taxes [Underlined: under subsections (a) through (d)] shall be expended for the following purposes, for the island for which the tax revenue is specially indicated, or, if none, for the county for which the tax revenue is indicated:
(1) For payment of interest on and redemption of any bonds duly issued or sold on or after July 1, 1951, under chapter 47 for the financing or aiding in financing the construction of county highway tunnels, approach roads thereto, and highways. [[Struck through: Such payments]] [Underlined: Payments] of interest and principal on the bonds when due, shall be first charges on such moneys so deposited in the fund[[Struck through: .]][Underlined: ;]
(2) For acquisition, designing, construction, reconstruction, improvement, repair, and maintenance of county main and general thoroughfares, highways, and other streets, [Underlined: including private roadways that are open to and used by the public,] street lights, storm drains, and bridges, including costs of new land therefor, when expenditures for [[Struck through: the foregoing]] [Underlined: these] purposes cannot be financed under state-federal aid projects[[Struck through: .]][Underlined: ;]
(3) [Underlined: For reconstruction, improvement, repair, and maintenance of privately-owned roadways that are open to the public;]
[[Struck through: (3)]] [Underlined: (4)] In the case of the city and county of Honolulu, for payment of the city and county's share in an improvement district initiated by the city and county for an improvement listed in [[Struck through: []]paragraph[[Struck through: ]]] (2) [[Struck through: above which]] [Underlined: that] is permitted to be constructed in the city and county[[Struck through: .]][Underlined: ;]
[[Struck through: (4)]] [Underlined: (5)] For the construction of county highway tunnels, overpasses, underpasses, and bridges, where [[Struck through: such]] [Underlined: the] improvement cannot be made under state-federal aid projects[[Struck through: .]][Underlined: ;]
[[Struck through: (5)]] [Underlined: (6)] For purposes and functions connected with county traffic control and preservation of safety upon the public highways and streets[[Struck through: .]][Underlined: , including private roadways that are open to and used by the public;]
[[Struck through: (6)]] [Underlined: (7)] For purposes and functions in connection with mass transit[[Struck through: .]][Underlined: ; and]
[[Struck through: (7)]] [Underlined: (8)] For acquisition, design, construction, improvement, repair, and maintenance of bikeways.
[[Struck through: (8)]] [Underlined: (f)] No expenditure under [Underlined: subsection (e)] shall be made[[Struck through: ,]] out of the revenues paid into any [[Struck through: such]] fund[[Struck through: , which]] [Underlined: that] will jeopardize federal aid for highway construction."
SECTION 3. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.
SECTION 4. This Act shall take effect on July 1, 2025.
INTRODUCED BY:
_____________________________
Report Title:
Privately-Owned Roadways; Fuel Tax; State Tax
Description:
Allows for a percentage of general excise and fuel taxes generated by the counties to be used for maintenance of private roadways that are open to the public.
The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.