HB2038

SECTION 1. The legislature finds that climate change is a global issue that threatens Hawaii's coastlines, natural resources, and the wellbeing of residents. A significant portion of Hawaii's greenhouse gas emissions originates from gasoline "superusers", defined as the top ten per cent of drivers in terms of gasoline consumption, with each individual using at least 1,270 gallons of gasoline annually.

The legislature further finds that in Hawaii, about 6.8 per cent of drivers, or approximately sixty-five thousand individuals, are gasoline superusers. On average, each gasoline superuser drives more than forty thousand miles annually. Altogether, Hawaii gasoline superusers consume approximately 117,000,000 gallons of gasoline in a year, making up about one-quarter of the State's total annual gasoline usage.

The legislature additionally finds that the financial barriers to the adoption of clean transportation alternatives are disproportionately high for lower-income individuals. This disparity risks creating an uneven path toward clean transportation, where environmental and economic benefits accrue primarily to those with greater resources. The legislature believes that it is vital to address this inequity to ensure that the shift toward a cleaner transportation system is inclusive and accessible to all members of society.

The legislature also finds that reducing greenhouse gas emissions from transportation is essential to mitigate climate change and protect the State's environment, economy, and wellbeing of residents. It is in the public interest to provide financial assistance to encourage residents to adopt cleaner transportation alternatives, including but not limited to electric vehicles, more fuel-efficient vehicles, personal or electric bicycles, public transportation passes, and charging equipment, especially for those in low- and moderate-income communities who may face affordability barriers.

The purpose of this Act is to establish a clean transportation alternatives incentive program that returns funds to eligible residents of the State who meet a certain income threshold or are gasoline superusers, based on their prior fuel usage, for any qualifying purchase that supports clean mobility, while promoting climate justice and resource efficiency.

SECTION 2. Chapter 225P, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"§225P- Clean transportation alternatives incentive program; established. (a) There is established within the department of transportation a clean transportation alternatives incentive program to provide financial incentives through:

(1) An income-based incentive subsidy for residents whose income does not exceed $150,000 per year who relinquish or replace a gasoline-powered vehicle; and

(2) A gasoline superuser subsidy for residents who are verified gasoline superusers and who relinquish or replace a gasoline-powered vehicle.

(b) To qualify for an income-based incentive pursuant to subsection (a), an applicant shall submit proof of:

(1) A household federal adjusted gross income not exceeding $150,000;

(2) Hawaii residency; and

(3) Purchase of a qualifying clean transportation alternative within ninety days of relinquishing a gasoline-powered vehicle.

(c) The income-based incentive shall be $4,000 per gasoline-powered vehicle traded in for an applicant who has submitted the necessary documentation as required pursuant to subsection (b) and is approved by the department of transportation.

(d) To qualify for the gasoline superuser incentive, an applicant shall submit proof of:

(1) Annual gasoline consumption exceeding 1,270 gallons, using registration and mileage records;

(2) Hawaii residency; and

(3) Purchase of a qualifying clean transportation alternative within ninety days of relinquishing a gasoline-powered vehicle.

(e) When an applicant relinquishes a gasoline-powered vehicle, the dealer receiving the vehicle shall calculate the applicant's average annual gasoline use for the vehicle based on registration records and the following formula:

(1) Current odometer reading minus the odometer reading at time of purchase, which shall equal the total miles driven;

(2) The total miles driven divided by the federal Environmental Protection Agency miles per gallon rating, which shall equal the total gallons; and

(3) The total gallons divided by the number of years owned by the applicant, which shall equal the average annual gallons.

(f) The gasoline superuser incentive shall be awarded to an applicant who has submitted the necessary documentation as required pursuant to subsection (d) and is approved by the department of transportation. The amount of the award shall be calculated based on the average annual gallons, as determined by subsection (e)(3) multiplied by $7.00 per-gallon gasoline incentive rate.

The department of transportation shall establish the per-gallon rate to achieve the greatest possible emissions reductions for each dollar of state funds spent.

(g) Incentive funds may be paid as a voucher, or any other form as determined by the department of transportation, to be used by the recipient for any eligible purpose.

(h) No applicant shall receive more than one incentive allowed under this section within a five year period, to begin on the day following the disbursement of the incentive.

(i) The department of transportation shall adopt rules pursuant to chapter 91 necessary to carry out this section. The rules adopted pursuant to this section shall address, at minimum:

(1) Approving eligible expenditures;

(2) Verifying eligibility, income limits, and qualifying purchases;

(3) Acceptable documentation and procedures for distribution of the incentive; and

(4) Setting tiers or higher rates for low- or moderate-income households, as defined by current state or federal guidelines.

(j) As used in this section:

"Clean transportation alternative" includes but is not limited to:

(1) Purchase or lease of an electric vehicle or plug-in hybrid;

(2) Purchase of a new or used vehicle achieving at least twenty per cent better fuel economy than the vehicle replaced;

(3) Purchase of a bicycle, electric bicycle, or personal micro-mobility device;

(4) Purchase of a bus or public transit pass or card valid for six months or longer; or

(5) Purchase and installment of electric vehicle or bicycle charging equipment.

"Gasoline superuser" means an individual whose verified average annual gasoline consumption exceeds 1,270 gallons per year or who is within the top ten per cent of statewide drivers by fuel use, as determined by the department of transportation."

SECTION 3. There is appropriated out of the general revenues of the State of Hawaii the sum of $60,000,000 or so much thereof as may be necessary for fiscal year 2026-2027 for the department of transportation to implement and administer the clean transportation alternatives incentive program established pursuant to section 225P- , Hawaii Revised Statutes; provided that the department may expend up to $6,000,000 for administrative expenses directly related to the program.

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

SECTION 4. New statutory material is underscored.

SECTION 5. This Act shall take effect on July 1, 2026, and shall be repealed on .

INTRODUCED BY:	_____________________________

HOUSE OF REPRESENTATIVES	H.B. NO.	2038
THIRTY-THIRD LEGISLATURE, 2026
STATE OF HAWAII