SB542

SECTION 1. The legislature finds that the health of Hawaii's people and the quality of Hawaii's waters are already being significantly harmed by pollution from cesspools. Hawaii has more than eighty thousand cesspools that discharge about fifty million gallons of wastewater into the State's groundwater every day. Cesspools are antiquated, substandard systems that damage public health, pollute drinking water, and lower water quality in streams, groundwater, nearshore marine areas, and the ocean. Cesspool pollution also harms public recreation and the precious coral reefs on which Hawaii's economy, shoreline, fisheries, and native species depend.

The legislature further finds that the continuation of cesspool discharges into the environment at current levels beyond 2050 is likely to cause the deaths of most of Hawaii's coral reefs, which would be an economic, social, cultural, and environmental catastrophe for the State.

The legislature additionally finds that existing law requires, cesspool owners to convert their cesspools to other forms of sewage treatment facilities by 2050. This requirement has not motivated any significant number of cesspool owners to start the conversion process, but rather, has instilled in cesspool owners a sense that there is no urgency to convert. Further, this long lead-time generally results in increased costs due to inflation.

The legislature further finds that the costs of conversion are often beyond the financial means of individual property owners and should be borne at least in part by the State through bond financing.

Accordingly, the purpose of this Act is to:

(1) Implement the recommendation of the working group established by Act 132, Session Laws of Hawaii 2018, to accelerate the dates for required upgrades, conversions, or connections of certain cesspools;

(2) Appropriate funds to provide financing assistance via the cesspool compliance pilot grant project; and

(3) Authorize the issuance of general obligation bonds to finance accelerated upgrades, conversions, and connections of cesspools in the State.

SECTION 2. Chapter 342D, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"§342D- Cesspools; mandatory upgrade, conversion, or connection; priority level 1; priority level 2. (a) Every cesspool in the State categorized as priority level 1 according to the university of Hawaii's Hawaii cesspool prioritization tool shall be:

(1) Upgraded or converted to a director-approved wastewater system; or

(2) Connected to a sewerage system,

before January 1, 2035; provided that priority level 1 cesspools on recreational residence leases within the Kokee state park and Waimea Canyon state park on the island of Kauai shall be upgraded, converted, or connected before January 1, 2040.

(b) Every cesspool in the State designated as priority level 2 according to the university of Hawaii's Hawaii cesspool prioritization tool shall be:

(1) Upgraded or converted to a director-approved wastewater system; or

(2) Connected to a sewerage system,

before January 1, 2040.

(c) The director may grant an exemption from the requirements of subsections (a) and (b) to the property owner of a cesspool who applies, on or before December 30, 2030, for an exemption and presents documentation and sufficient explanation showing a legitimate reason that makes it infeasible to upgrade, convert, or connect the cesspool. For the purposes of this subsection, a legitimate reason shall be limited to:

(1) Small lot size;

(2) Steep topography;

(3) Poor soils;

(4) Accessibility issues; or

(5) A planned development within two years of sewerage upgrades to a property owner's area.

(d) The department may grant an extension of up to three years from the requirements of subsections (a) and (b) based on demonstration of financial inability to pay for or finance a cesspool upgrade, conversion, or connection; provided that the department may adopt rules pursuant to chapter 91 necessary to effectuate the purposes of this subsection.

(e) Notwithstanding any law to the contrary, no penalty or other assessment for any violation of this section shall constitute a lien on the real property. Notwithstanding any law to the contrary, no seizure of real property shall be authorized for any violation of this section.

(f) As used in this section, "cesspool" has the same meaning as defined in section 342D-72."

SECTION 3. Section 342D-72, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

"(a) [~~Before~~] Except as provided in subsection (b) and section 342D- , before January 1, [~~2050,~~] 2040, every cesspool in the State[~~, excluding cesspools granted exemptions by the director of health pursuant to subsection (b),~~] shall be:

(1) Upgraded or converted to a director-approved wastewater system; or

(2) Connected to a sewerage system."

SECTION 4. There is appropriated out of the general revenues of the State of Hawaii the sum of $ or so much thereof as may be necessary for fiscal year 2025-2026 and the same sum or so much thereof as may be necessary for fiscal year 2026-2027 to continue the implementation of the cesspool compliance pilot grant project established pursuant to Act 153, Session Laws of Hawaii 2022.

The sums appropriated shall be expended by the department of health for the purposes of this Act.

SECTION 5. The director of finance is authorized to issue general obligation bonds in the sum of $500,000,000 or so much thereof as may be necessary and the same sum or so much thereof as may be necessary is appropriated for fiscal year 2025-2026 for the purpose of financing the needs of this Act; provided that any property owner exempt from mandatory upgrade, conversion, or connection pursuant to section 2 of this Act shall be considered eligible for the upgrade, conversion, or connection of the owner's cesspool through funding provided by the issuance of these bonds.

The sum appropriated shall be expended by the department of health for the purposes of this Act; provided that the appropriation authorized by this section shall not lapse at the end of the fiscal biennium for which the appropriation is made; provided further that all moneys from the appropriation unencumbered as of June 30, 2028, shall lapse as of that date.

SECTION 6. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 7. This Act shall take effect upon its approval; provided that sections 4 and 5 of this Act shall take effect on July 1, 2025.

INTRODUCED BY:	_____________________________

THE SENATE	S.B. NO.	542
THIRTY-THIRD LEGISLATURE, 2025
STATE OF HAWAII