RELATING TO PARKING.

SB2724

THE SENATE

S.B. NO.

2724

THIRTY-THIRD LEGISLATURE, 2026

STATE OF HAWAII

A BILL FOR AN ACT

RELATING
TO PARKING
.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

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SECTION 1.
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The purpose of
this Act is to improve air quality and reduce traffic congestion by requiring
employers of twenty or more employees to provide transit subsidies, cash
allowances, or both in lieu of employer-subsidized parking to encourage
employees to find alternative means of commuting to work, such as public
transportation, carpooling, bicycling, or walking.

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SECTION 2.
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Chapter 378, Hawaii Revised Statutes, is amended by adding a new part to
be appropriately designated and to read as follows:

"
Part .
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PARKING CASH-OUT PROGRAM

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�378-
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Parking cash-out program.
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(a)
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Each employer of twenty persons or more who
provides a parking subsidy to employees shall offer a parking cash-out
program.
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A parking cash-out program
offered under this section shall include offering employees a choice of
tax-exempt, employer-paid transit or vanpool subsidies, taxable cash, or a
combination of the two, such that the value of the total benefit received is
equal to or greater than the market rate cost of parking.
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(b)
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Any parking cash-out
program offered pursuant to this part shall offer participating employees a
daily and a monthly option; provided that employees who elect the monthly
parking cash-out program option shall receive the monthly market rate cost of
parking amount but may still pay the market rate cost of parking on whichever
days of the month they drive to their place of employment.

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(c)
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A parking cash-out
program may include a requirement that participating employees certify that
they will comply with guidelines established by the employer and designed to reduce
parking near the place of employment; provided that the guidelines include a
provision that states employees will no longer be eligible for the parking
cash-out program if they do not comply with the guidelines.

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(d)
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The employer shall maintain appropriate evidence of its effort to
establish the market rate cost of parking for at least four years.
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If the amount cannot be established because
the parking is unavailable to the public, then an amount for use of a similar
parking space within one-quarter mile of the place of employment shall be used;
provided that documentation supporting the appropriateness of the cost shall be
from within the previous six months and shall be maintained by the employer for
at least four years from the time a parking cash-out program offer is made.
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This documentation may include evidence of a
public offer or a listing including price, such as a physical copy, photograph
of an advertisement, or a screenshot showing public availability and price
within a smartphone parking application.
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The market rate cost of parking shall be
adjusted periodically, unless it is reassessed per the methods provided in this
subsection, which employers shall do at least every four years. If the parking
used by the employee is not commercially available to the public and there is
no commercially available parking within one quarter-mile of the place of
employment, then the employer shall document and retain records related to the
failed effort to find commercially available parking; provided that the monthly
market rate cost of parking shall be at least sixty dollars per month.

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(e)
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This section shall not apply to employers with employees who are:

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(1)
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Covered
by a collective bargaining agreement that requires the employer to provide the
employee subsidized parking, except if the agreement has expired or is extended
after the date of enactment of this law; or

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(2)
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Required
to operate their own vehicle for employment purposes and who are reimbursed by
their employers in accordance with Internal Revenue Service regulations for this
use.

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(f)
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This section shall not apply to employers that have, prior to enactment,
leased employee parking that prohibits subletting of parking and penalizes the
reduction of the number of parking spaces subject to the lease, until the
expiration of that lease excluding lease extensions.

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(g)
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The director shall adopt rules pursuant to chapter 91 to implement this
section.
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The rules shall include but not
be limited to the following:

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(1)
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Penalties
or other mechanisms to ensure than an employer complies with this section; and

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(2)
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Procedures
for providing notice to employers that are in violation of this section and for
appeal by the employer of any penalty imposed.

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(h)
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For the purposes of this section:

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"Director" means the director of transportation.

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"Market rate cost of parking� means an amount not less than
the cost of parking if the parking were obtained by an individual unaffiliated
with the property on which parking is provided or by the employer through a
transaction with no special rate due to a property lease.

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"Parking cash-out program" includes an employer-funded
program under which an employer offers to an employee an allowance equivalent
to the parking subsidy that the employer would otherwise pay to provide the
employee with a parking space.

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"Parking subsidy" means the
difference between the
market rate cost of
parking owned, leased, subsidized, or otherwise paid for by the employer

and any cost charged to an employee for use of that parking."

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SECTION 3.
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(a)
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Beginning one year after the enactment
of this Act and every two years thereafter, each covered employer shall submit
a report to the department of transportation that includes but is not limited
to:

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(A)
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The
total number of employees;

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(B)
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The
number of employees offered a parking benefit;

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(C)
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The
market rate cost of parking;

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(D)
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The
amount, if any, that employees contribute to their parking expenses;

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(E)
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The
number of employees using a parking benefit;

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(F)
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The
number of employees offered a parking cash-out program, separately reporting
offers of monthly and daily parking cash-out programs;

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(G)
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The
number of employees accepting the parking cash-out program, separately
reporting acceptance of monthly and daily parking cash-out programs; and

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(H)
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Any
other information required by the department of transportation.

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(b)
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Beginning
fifteen months after enactment and every two years thereafter, the department
of transportation shall submit a report to the legislature that includes but is
not limited to:

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(1)
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Aggregate
data from the reports required by subsection (a);

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(2)
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An
assessment of how many covered employers have not filed the report required by
subsection (a); and

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(3)
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A
description of actions that will be taken to achieve full compliance with section
1 of this Act.

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SECTION 4.
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The department of transportation shall impose fines or penalties on applicable
employers for violations of this Act.
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The fines or penalties shall be not less than the amount their employees
would have been offered from a parking cash-out program and not more than five
times that amount.

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SECTION 5.
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This Act shall take effect on July 1, 2026.

INTRODUCED BY:

_____________________________

Report Title:

DOT;
Parking Cash-out Program

Description:

Requires employers of twenty or more persons to offer a
parking cash-out program in place of a parking subsidy and report to the
Department of Transportation.
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Requires
the Department of Transportation to report to the Legislature, adopt rules, and
impose fines or penalties on violators.

The summary description
of legislation appearing on this page is for informational purposes only and is
not legislation or evidence of legislative intent.