Bill > SB685

This bill establishes a comprehensive carbon emissions tax and dividend program in Hawaii designed to reduce greenhouse gas emissions while providing financial relief to taxpayers. Starting in 2026, the bill imposes an incrementally increasing tax on petroleum products and fossil fuels, with tax rates rising annually until 2035. Simultaneously, the bill creates a carbon cashback tax credit system where individual taxpayers and dependents will receive annual refundable tax credits that increase in value over time. For example, in 2026, a single taxpayer will receive a $40 credit, which will grow to $473 by 2035. The bill also reenacts the agricultural development and food security special fund, which was previously repealed, and directs a portion of the carbon emissions tax revenues into various special funds, including funds for environmental response, energy security, and agricultural development. The legislation is based on economic research suggesting that a carbon tax with direct dividend payments can effectively reduce fossil fuel consumption while providing a net financial benefit to most households, particularly those with lower incomes. The bill requires the Department of Taxation to submit annual reports on the program's implementation and impact, with a comprehensive evaluation planned for 2035.

Agriculture and Natural Resources

https://www.capitol.hawaii.gov/session/measure_indiv.aspx?billtype=SB&billnumber=685&year=2026