S.B. 1638 Summary

• Establishes a three-year Molokai Air Carrier Subsidy Pilot Program within the Department of Transportation to provide subsidies to airlines operating out of Molokai Airport to improve affordability and access to air travel for residents.

• Requires applicants to demonstrate measurable improvements in air service availability or affordability through increased regularly scheduled flights, reduced airfare costs, or alternative pricing structures benefiting low-income and frequent travelers.

• Mandates annual audits of all subsidized funds to ensure compliance with program requirements, with penalties including fund repayment and up to three years of ineligibility for carriers that misuse funds.

• Requires the Department of Transportation to submit comprehensive reports to the legislature by 2026, 2027, and 2028 detailing program impact, including number of flights subsidized, changes in air travel costs, and overall benefits to Molokai residents.

• Appropriates unspecified general revenues to the Department of Transportation for fiscal years 2025-2026 and 2026-2027, with the program set to expire June 30, 2028.