Climate fee, property insurance, illegal fireworks: Here’s what could change for Hawaiʻi

While lawmakers are considering many bills ahead of the end of the 2025 session on Friday, here at Hawaiʻi Public Radio, we’ve narrowed down the topics to the top four we’re paying close attention to.

All of these measures have made it through the conference committee, one of the last steps of the legislative process, and many will be voted on for a final time by both the House and Senate on Wednesday.

And while the Legislature will adjourn at the end of the week, lawmakers are blocking off days for potential special sessions in the interim to address federal funding impacts.

Since taking office, Gov. Josh Green has proposed measures to implement a climate impact fee on tourists. For the last few years, those efforts have been unsuccessful, but this year, lawmakers seem ready to pass it.

“From my standpoint, this is going to be a legacy item for the state of Hawaiʻi. This will be for generations, as long as we keep it in place, and I expect we will because a lot of people have sacrificed and they want to see it work now,” Green said.

“I think people are going to look back 10 and 20 years from now and they’re going to say, ‘Oh, that’s how Hawaiʻi was able to deal with the very serious threat of climate change.’”

The measure would increase the transient accommodations tax by 0.75 percentage points and levy an 11% tax on cruise ships. The governor would then request that the additional proceeds from the tax increase go toward climate resiliency. However, the final decision on whether those funds go toward climate resilience projects will be up to the Legislature, the governmental body that approves the budget.

The additional taxes are expected to bring in about $100 million a year, far below the estimated need of $500 million. However, Green explained that the funds can be leveraged to take out bonds for larger amounts of money.

Lawmakers will also vote on a measure that aims to stabilize the state’s property insurance crisis. Many condominiums have seen rates skyrocket or lost coverage altogether.

The bill would allow the state to issue commercial and hurricane insurance policies through the Hawaii Hurricane Relief Fund and the Hawaii Property Insurance Association. The HPIA is already an insurer of last resort for homes in the lava zone, but this measure would expand its ability to insure other buildings.

Sen. Jarrett Keohokalole, who chairs the Senate Consumer Protection Committee, estimates that if the bill passes, policies could be available by summer.

“ There is another piece to this that is significant, which is that by putting together robust insurance access for homeowners across the state, we are trying to woo the insurance industry back to Hawaiʻi by making sure that we have a responsible policy around insurance,” he said.

“We do need the private sector to be involved. We are confident that the programs that we put together in this bill will sufficiently be able to attract global insurers back to Hawaiʻi to take pieces of the risk so that people can get reasonably priced coverage again.”

The measure would also create a condominium loan program that would allow the state to loan condominium buildings to pay for deferred maintenance for specific issues like installing fire sprinklers and replacing pipes. The measure is for buildings that have been unable to secure financing because they have been unable to obtain full insurance coverage.

State lawmakers are moving bills that aim to punish and deter the use of illegal fireworks. Cracking down on illegal fireworks has been a priority from the start of the legislative session following the devastating New Year’s Eve explosion that killed seven people, including a 3-year-old.

A pair of fireworks measures passed through conference hearings last week — among the final hurdles for bills going through the state legislative process.

House Bill 550 would allow law enforcement officers to use drones to establish probable cause for fireworks-related arrests. House Bill 1483 would create new and more severe punishments for fireworks violations by repeat offenders and those who cause injuries or death.

In written testimony supporting HB 1483, the state Department of the Attorney General said prosecutors have had trouble enforcing fireworks laws in part because of the challenges of “gathering evidence” and “meeting the high burden of proof” to convict those accused of fireworks offenses.

The department said that “only a small number of criminal fireworks cases have been initiated by law enforcement, and an even smaller number have been prosecuted, resulting in a largely ‘ineffective deterrent’ to the distribution and use of illicit fireworks.”

Lawmakers will also consider a measure that would allow the Public Utilities Commission to set a liability cap for Hawaiian Electric Company in the event of another catastrophic wildfire. The governor will then have final approval on the liability cap.

The bill would also allow HECO to take out bonds for infrastructure upgrades backed by customers — a maneuver called securitization. A fee could be added to people’s electric bills to pay for the needed upgrades if the utility meets certain conditions. The bill would cap the amount the utility company can securitize at $500 million.

Rep. Nicole Lowen, who chairs the House Energy and Environmental Protection Committee, explained that securitization is a positive step forward because it will allow the utility company to borrow funds at a lower interest rate and save consumers money versus if they borrowed the funds without securitization.

“ Securitization is being authorized only to do the concrete work that we need to do: wildfire mitigation and other infrastructure resilience improvements,” she said.

“This version of securitization will be used to finance infrastructure improvements that we know are needed at a lower rate than if the electric utility went out and borrowed on their own. So that part, despite a lot of misunderstanding about what securitization is, I think is a positive.”

However, in order for HECO to securitize, it must have and comply with its wildfire mitigation plan.

The bill will also have the Public Utilities Commission study the establishment of a wildfire recovery fund.

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