Bill to allow sale of naming rights for state facilities advances amid finance and public-notice concerns

The Senate Committee on Government Operations advanced Senate Bill 583 (SB583) as SD1 on Feb. 11, 2025, after a hearing that featured public opposition, written testimony from Budget and Finance cautioning about tax-law consequences, and detailed questions from senators about tax-exempt bonds, public notice and recourse if the public opposes a chosen sponsor.

Outdoor Circle Executive Director Winston Welch testified in opposition, urging the committee to “keep the public assets and facilities with locally relevant place names, flora, fauna, historical persons or people with decades of service to Hawaii,” and warning that the bill’s broad scope—covering “all state facilities”—risked commercializing public property and could produce reputational issues if naming sponsors later fall into disfavor.

Committee members focused on the written concerns submitted by the Department of Budget and Finance (BNF). Senators and witnesses discussed whether naming-rights payments would constitute “private use” of tax-exempt financing and thus jeopardize the tax-exempt status of bonds used to finance public projects. One senator summarized BNF’s position: “Federal tax law imposes restrictions on the private use of the proceeds of tax-exempt bonds…failure to comply…could jeopardize the tax-exempt status of the bonds.”

Stadium and development proponents said naming-rights revenue would be an additional financing option—useful if tax-increment financing (TIF) or other revenue tools proved unavailable—but that use of naming rights would be optional rather than required. The state stadium representative said naming-rights revenue could assist private financing partners in stadium redevelopment but would not automatically permit off-site billboard advertising.

Senators asked procedural questions: who decides a name, how the public would be notified, how price would be determined and what recourse exists if the public objects. Witnesses said decisions would be negotiated and approved by the owning authority or board (for example, the stadium authority), and that public notice would be provided through existing board processes, though senators urged a clearer, uniform public-process standard.

The committee passed SB583 SD1 and directed that the committee report reflect BNF’s written concerns about the tax-exempt status of bonds and record senators’ reservations about public-notice and naming-selection procedures. The measure was amended to defer its effective date to 07/01/2050 to permit further discussion.