Good morning everyone, welcome to the committee meeting of September 3rd.

Today we'll start off with our parks and recreation transportation committee, Mr.

Bulasad.

Sorry, Chair.

I think that's uh Sorry, yeah, we'll call the We'll call the Parks and Recreation Transportation Committee to order.

Can we read the only item?

Communication from Councilmember Bulasan requesting the presence of the Director of Finance, the Deputy Director of Finance, the DMV administrator, and the Hawaii Department of Transportation, Highways Division, Road Usage Charge Program Manager to provide a briefing relating to the Hawaii program.

Take it away, Councilmember.

Second.

Thank you, Committee Chair Holland, and thank you to our guests who are here to do the presentation.

So I'd like to ask you guys if you would like to join us in front.

And I requested this as you guys know, we're making some changes for uh looking at how we manage our roads and what how the new program that is going through the state.

And um, I wanted to make sure that all of our community know what those changes are and what that looks like.

So we sent an over invitation for our team to at the state to share what's the update of what's going on with the RUC program and see if uh any council members or our community have any questions.

So take it away.

Um and then you want to press the button till it turns green, introduce yourself, and hi, good morning, council chair, members of the council.

Thank you very much for having the Hawaii Department of Transportation here to speak with you this morning.

My name is Mindy Kimura, and I'm with the Hawaii DOT and I'm the Hawaii Road Usage Charge Program Manager.

Um so today I'll be providing a briefing on the implementation efforts of the Hawaii Road Usage Charge Program and how that ties into the county road usage charge that we've uh previously introduced into legislation for the past two sessions.

So I point so just a um brief briefing of the agenda.

I'm gonna provide some background information on the Hawaii Road Usage Charge program, as well as an update on our program implementation and communication efforts statewide.

Um, and then open the floor to any questions.

So briefly touching on some background information.

Um, the main reason why the Hawaii Department of Transportation has looked into this is because we are seeing that gasoline-powered vehicles across the state are increasing and becoming more efficient.

We're also seeing a rapid adoption of electric vehicles statewide as we currently rank second in the nation for EV adoption.

Um in 2018, when the road usage charge program first began, we saw less than 1% of EV statewide.

Right now we're looking at a 3.5% increase since then.

So in Hawaii, we pay uh state, federal, and a county fuel tax.

Right now, the federal fuel tax is set at 18.4 cents per gallon, the state fuel tax at 16 cents per gallon, and for the county of Khoi, um the fuel tax rate is set at 17 cents per gallon.

So the cost of the fuel tax itself is about 10% of the cost, um, and the remaining 90% is of the cost of fuel itself.

And then some statistics for the county of Kauai and statewide.

Um, as of June 2025, so this year we saw a little over 37,000 EVs registered statewide, and for the county of Kauai, there's around uh 1,182 EVs.

And for the county of Kauai, an average driver um drives around 9,000 miles annually.

So road usage charge or a RUC is a roadway consumption charge that um assesses a per mile fee on a driver based on how many miles they drive.

It does three things.

It employs the user pay model that is similar to the motor fuel tax.

It also provides a fair payment for the public roadways that all of our residents use, and it provides long-term funding sustainability to upkeep and maintain our transportation networks.

So looking at this chart, it displays what a road usage charge is and how it is a fair way of funding our transportation system.

In the light green shades, you can see that lower efficiency vehicles are paying a lot of the backbone for our state fuel tax compared to hybrid and high efficiency vehicles or even electric vehicles.

With the road usage charge, it negates this inequity in where no matter what type of vehicle you're able to drive or afford, all drivers will pay the same in terms of their taxation.

So looking at what this means in terms of our revenue, the road usage charge is a sustainable source for funding our future because as we look at their state fuel tax within the next 25 years, we can see how that state gas tax is declining.

With the road usage charge specifically just on electric vehicles, we can see how the road usage charge helps to fill the gap from that funding mechanism that we're losing.

So this past 2025 legislative session, uh the state introduced House Bill 1161 to vote chambers and it passed vote chambers, but no action was taken.

The House Bill 1161, the main motive of this was to authorize counties to enact a road usage charge similar to the state program, but to help as a replacement for the county fuel tax.

In addition to this, the legislation also established or sought to establish a $50 default road usage charge, which would then increase to $80 beginning July 1st, 2028.

And I'll get a little bit more into why those dates play out in the future slides.

So while this bill did not pass uh during this past session, these policy objectives are still important to the Hawaii Road Usage Charge Pro the Counties.

The Hawaii Department of Transportation does plan on reintroducing this bill this coming legislative session.

Um we did see that in this bill the policy did have strong support across both chambers, and we do understand that the um bill got caught up in some end of discussion end of session political debates and negotiating that weren't related to the substantial details of what the bill comprised of.

So now a quick update on how the Hawaii Road Usage Charge Program implementation efforts have been ongoing.

So per Act 222 was passed during the 2023 legislative session, making Hawaii the fourth state in the nation to adopt a road usage charge program.

These are some of the timelines that are outlined in that legislation.

So beginning July 1st of this year's uh EV drivers are presented the option to either pay a state per mile road usage charge that's capped at $50, or can or they can just pay a flat annual road usage charge of $50.

The state per mile road usage charge rate is set in legislation at $8 per 1,000 miles, which equates to less than a penny per mile.

For the first three years of the program, so until July 1st, 2028, EV drivers have that choice between the per mile or the flat fee.

However, once July 1st, 2028 begins, the flat annual road usage charge choice goes away, and all EV drivers will need to pay the per mile road usage charge.

In the meantime, the legislation also requires that the Department of Transportation also create a long-term transition plan for all light duty vehicles to be included in this road usage charge program no later than 203.

So as I mentioned before, HIRUC launched on July 1st of this year, and at the time of annual registration renewal, EV owners or eligible EV owners will be able to see that choice between paying the per mile road usage charge or the flat annual road usage charge.

Right now, the per mile road usage charge is capped at $50.

And the reason for that is because both options for the per mile road usage charge and the flat annual road usage charge seek to replace the previous $50 EV registration surcharge that was already in place.