(BIVN) – The “Green Fee” bill has become law in Hawaiʻi.

The State of Hawaiʻi detailed Tuesday’s signing of Senate Bill 1396 in this news release:

Governor Josh Green, M.D., today signed into law Act 96 (Senate Bill 1396), a landmark initiative that establishes the first ever climate impact fee, or “Green Fee,” in the nation, marking a historic moment for Hawaiʻi’s climate, environment and communities. The Green Fee addresses the critical need to build resiliency against the impacts of climate change by providing a stable source of funding for environmental stewardship, hazard mitigation and sustainable tourism.

“Today Hawaiʻi ushers in the first Green Fee in the nation. Once again, Hawaiʻi is at the forefront of protecting our natural resources, recognizing their fundamental role in sustaining the ecological, cultural and economic health of Hawaiʻi. As an island chain, Hawaiʻi cannot wait for the next disaster to hit before taking action. We must build resiliency now, and the Green Fee will provide the necessary financing to ensure resources are available for our future.”

Following the devastating Maui wildfires and in response to the growing frequency and intensity of natural disasters across Hawai‘i and the nation, Governor Green established the Climate Advisory Team (CAT) in 2024, led by Chris Benjamin and comprised of a team of leaders, to develop community-informed policy recommendations. A key recommendation of the CAT was to establish a dedicated source of funding for climate change mitigation and disaster resilience. The CAT recommended the transient accommodations tax (TAT) as a potential revenue source.

photo courtesy Office of the Governor

“The Green Fee bill marks a historic investment in climate disaster resilience and environmental protection,” said Chris Benjamin. “Using the TAT to fund resiliency projects ensures that the financial burden of safeguarding our ʻāina and people doesn’t fall upon residents alone. We thank the Legislature, industry and countless community groups and individuals who advocated tirelessly for this bill.”

Senate Bill 1396 increases the TAT rate by 0.75% beginning in 2026 and levies, for the first time, the TAT on cruise ships that port in the state.

Assessing the TAT on cruise ships — a sector of transient accommodations that has long gone untaxed under the TAT — promotes equity across the tourism industry, ensuring that all visitors to Hawai‘i contribute to the islands’ long-term resilience and well-being.

While fees may not be the most popular method of revenue generation, stakeholder dialogue has affirmed that visitors are willing to pay a climate impact fee in order to support Hawaiʻi’s environmental protection efforts and preserve the beauty and cultural heritage of the islands for future generations. The Green Fee ensures that visitors share in the kuleana of environmental stewardship and sustainable tourism.

“I mahalo the tourism industry for stepping up and collaborating on this initiative, which will preserve Hawaiʻi for kamaʻāina and visitors alike,” said Governor Green. “The fee will restore and remediate our beaches and shorelines and harden infrastructure critical to the health and safety of all who call Hawaiʻi home, whether for a few days or a lifetime.

Senator Lynn DeCoite (District 24 – Hāna, East and Upcountry Maui, Moloka‘i, Lāna‘i, Kaho‘olawe and Molokini) said the bill is a matter of common sense and responsibility. “I think it’s really about our kuleana, to the state, to the people of Hawaiʻi. Climate change is here and has been a super-huge challenge for all of us. As the chair of the Economic Development and Tourism (EDT) Committee, the impacts are real. The bill shares the responsibility of caring for our home with those who come to visit, to ensure that our natural resources are cared for, for future generations.”

Representative Adrian Tam (District 24 – Waikīkī) thanked the stakeholders representing a very diverse coalition of individuals, from the visitor industry to the environmental stewardship advocates. “The funds raised by this bill will go toward much-needed environmental stewardship as well as erosion mitigation and restoration projects, so it is really a win-win for all of us. The signing of this bill will ensure that the investments in resilience and taking preventive measures will protect Hawaiʻi’s environment and our economy, and it will soon save taxpayer dollars in the long run.”

The Green Fee is projected to generate $100 million annually, and the Green Administration will work with the legislature to confirm projects next session as revenue becomes available. These projects include environmental stewardship, climate and hazard resiliency and sustainable tourism.