HB 1177 Summary

• Extends the $0.50 annual increase to the rental motor vehicle surcharge tax through December 31, 2031 (previously scheduled to end December 31, 2027).

• Requires the Department of Transportation to establish a five-year Interisland Transportation Fee Reimbursement Pilot Program to subsidize transportation costs of essential goods (food, agricultural products, medical supplies, and building materials for affordable housing) between Hawaiian islands.

• Directs the Department to establish by October 30, 2025: a standardized application and claims process for designated carriers, certification requirements, eligibility guidelines, compliance audits, and budget monitoring procedures.

• Requires the Department to track program metrics, measure cost reductions for essential goods, conduct stakeholder surveys, and submit findings and recommendations to the legislature before each regular session.

• Appropriates $336,724 for fiscal years 2025-2026 and 2026-2027 to fund four full-time positions to develop and execute the pilot program; sunsets program provisions on June 30, 2030.