HB 1375 Summary

• Establishes a carbon cashback program that incrementally increases the environmental response, energy, and food security tax on fossil fuels from 2026 through 2035, with tax rates rising from $3.15 per barrel of petroleum in 2026 to $38.85 per barrel in 2035, then increasing by $1.26 annually.

• Creates refundable tax credits distributed equally to all Hawaii taxpayers and dependents to offset increased costs from the carbon tax, with individual taxpayer credits ranging from $40 in 2026 to a peak of $473 in 2035, and dependent credits at half those amounts.

• Reenacts the agricultural development and food security special fund (repealed in 2021), requiring $3,000,000 annually from tax revenues to support farmer grants, agricultural production, research, and food security initiatives.

• Allocates tax revenues to multiple funds including environmental response ($1,201,000), energy security ($892,800), agricultural development ($3,000,000), and administration of the carbon dividend program ($1,000,000).

• Requires the Department of Taxation to submit annual reports from 2026-2035 on program implementation and revenue distribution, with the Office of Planning and Sustainable Development to evaluate the program by 2035.