SB 125 Hawaii Senate · 2025 Regular Session

RELATING TO STATE ENTERPRISE ZONES.

Summary

Amends the definition of "eligible business activity" for State Enterprise Zone Program purposes to include retail sales of tangible personal property manufactured and sold in the enterprise zone to the final consumer, the processing of value-added agricultural products grown within an enterprise zone, the provision of professional services by health care professionals in health-care-related sectors, the use of advanced manufacturing to produce products, or the development of cybersecurity technology. Extends the eligibility period of the state business tax credit and general excise tax exemption for qualified businesses within state enterprise zones from 7 years to 9 years. Extends the eligibility period of the general excise tax exemption for qualified businesses within state enterprise zones engaged in the manufacturing of tangible personal property or the producing or processing of agricultural products from 10 years to 12 years. Makes the extension of the state business tax credit eligibility period applicable to taxable years beginning after 12/31/2025. Makes the extension of the general excise tax exemption eligibility period take effect on 1/1/2027. Effective 7/1/3000. (HD1)

Bill status passed both 4 of 5 stages cleared

Introduction

Jan 2025

Committee Review

Mar 2025

Senate Passage

Mar 2025

House Passage

Apr 2025

Governor

Introduced Jan 10, 2025 Last action Apr 22, 2025

Maddy AI version diff · 3 comparisons

What changed between versions

SB125_SD1 → SB125_SD2 · 8 edits

MODERATE

This bill modernizes Hawaii's Enterprise Zone program by expanding eligibility to include local manufacturers selling directly to retail customers (not just wholesalers), adding value-added agricultural processing, and including health care professional services. It also extends the duration of tax credits and tax exemptions from 7 to 9 years for most businesses and from 10 to 12 years for manufacturers and agricultural processors.

Scope change

The bill expands the scope of eligible businesses to include retail sales of locally manufactured goods and health care services, while also extending the time period for which businesses can receive tax benefits.

ELIGIBILITY

Added eligibility for local manufacturers who sell directly to retail customers without using wholesalers, addressing modern business models.

Added value-added agricultural processing as an eligible activity when products are grown within an enterprise zone.

Added health care professional services, including home health care agencies, specialized care practices, and health coaching, as eligible activities.

TIMELINE

Extended the tax credit and tax exemption period from 7 years to 9 years for most qualified businesses, and from 10 years to 12 years for manufacturers and agricultural processors.

DEFINITION

Added a new definition for 'value-added agricultural product' to clarify what qualifies under the program.

EXEMPTIONS

Added an exemption for general excise taxes on gross proceeds from eligible business activities, with specific limitations for agricultural retail sales.

Added an exemption for general excise taxes on construction services performed within enterprise zones for qualified businesses.

REQUIREMENT

Modified employment growth requirements to allow for 15% growth by the end of the fourth year instead of 10%, and extended the measurement period to the ninth year.

SB125_HD1 → SB125_SD1 · 8 edits

MODERATE

This bill modernizes Hawaii's Enterprise Zone Program by expanding eligibility to include local manufacturers selling directly to retail customers (instead of only through wholesalers), adding new eligible activities like value-added agricultural processing, advanced manufacturing, cybersecurity development, and specific health care services. It also extends the duration of tax credits and tax exemptions from seven to nine years for most businesses and from ten to twelve years for manufacturers and agricultural processors.

Scope change

The bill expands the scope of eligible businesses and activities under the Enterprise Zone Program, allowing more types of businesses to qualify for benefits and extending the duration of those benefits.

ELIGIBILITY

Expanded eligibility for local manufacturers to include those selling directly to retail customers, removing the previous requirement that over half of sales must go through wholesalers.

Added new eligible activities including retail/wholesale by local manufacturers, processing of value-added agricultural products, advanced manufacturing, cybersecurity technology development, and specific health care professional services.

Added eligibility for production of electric power from wind energy for sale to public utilities and research/development of genetically-engineered biotechnology products.

DEFINITION

Added new definition for 'tangible personal property' and modified the definition of 'eligible business activity' to reflect expanded scope.

FISCAL

Extended the eligibility period for state business tax credits and general excise tax exemptions from seven to nine years for most businesses, and from ten to twelve years for manufacturers and agricultural processors.

REQUIREMENT

Modified employment growth requirements for tax credits, changing the timeline from years 4-7 to years 4-9 for businesses eligible for extended credit periods.

EXEMPTIONS

Added exemption for contractors performing construction work within enterprise zones for qualified businesses.

TIMELINE

Set the effective date for the Act to July 1, 2050, with tax credit provisions applying to taxable years beginning after December 31, 2025, and tax exemption provisions applying to taxable years beginning after December 31, 2026.

Floor votes

How they voted

This bill passed the Senate by voice vote (no roll call recorded).

Full legislative history

Actions timeline

Total actions

Key actions

Committee

Amendments

Apr 4, 2025

Amended

Senate disagrees with House amendments.

upper

Apr 4, 2025

Introduced

Received from House (Hse. Com. No. 457).

upper

Apr 3, 2025

Lower · Passed

Passed Third Reading with none voting aye with reservations; none voting no (0) and Representative(s) Cochran, Woodson excused (2). Transmitted to Senate.

lower

Mar 28, 2025

Lower · Passed

The committee on FIN recommend that the measure be PASSED, UNAMENDED. The votes were as follows: 14 Ayes: Representative(s) Yamashita, Takenouchi, Grandinetti, Holt, Keohokapu-Lee Loy, Kitagawa, Kusch, Lamosao, Lee, M., Miyake, Morikawa, Templo, Alcos, Reyes Oda; Ayes with reservations: none; 0 Noes: none; and 2 Excused: Representative(s) Hussey, Ward.

lower

Mar 21, 2025

Committee

Report adopted; referred to the committee(s) on FIN with none voting aye with reservations; none voting no (0) and Representative(s) Cochran, Garrett, Kapela, Kitagawa, Ward excused (5).

lower

Mar 21, 2025

Committee

Reported from AGR (Stand. Com. Rep. No. 1407), recommending referral to FIN.

lower

Mar 19, 2025

Lower · Passed

The committee on AGR recommend that the measure be PASSED, UNAMENDED. The votes were as follows: 5 Ayes: Representative(s) Kahaloa, Kusch, Lowen, Perruso, Quinlan; Ayes with reservations: none; 0 Noes: none; and 1 Excused: Representative(s) Ward.

lower

Mar 14, 2025

Committee

Re-referred to ECD, AGR, FIN, referral sheet 23

lower

Mar 14, 2025

Committee

Reported from ECD (Stand. Com. Rep. No. 1238) as amended in HD 1, recommending passage on Second Reading and referral to AGR/HLT.

lower

Mar 12, 2025

Lower · Passed

The committee on ECD recommend that the measure be PASSED, WITH AMENDMENTS. The votes were as follows: 6 Ayes: Representative(s) Ilagan, Hussey, Tam, Templo, Todd, Matsumoto; Ayes with reservations: none; 0 Noes: none; and 1 Excused: Representative(s) Holt.

lower

Mar 6, 2025

Committee

Referred to ECD, AGR/HLT, FIN, referral sheet 19

lower

Mar 4, 2025

Introduced

Received from Senate (Sen. Com. No. 93) in amended form (SD 2).

lower

Mar 4, 2025

Upper · Passed

Report adopted; Passed Third Reading, as amended (SD 2). Ayes, 25; Aye(s) with reservations: none . Noes, 0 (none). Excused, 0 (none). Transmitted to House.

upper

Feb 18, 2025

Upper · Passed

The committee(s) on WAM recommend(s) that the measure be PASSED, WITH AMENDMENTS. The votes in WAM were as follows: 12 Aye(s): Senator(s) Dela Cruz, Moriwaki, Aquino, Elefante, Hashimoto, Inouye, Kanuha, Kidani, Kim, Lee, C., Wakai, Fevella; Aye(s) with reservations: none ; 0 No(es): none; and 1 Excused: Senator(s) DeCoite.

upper

Feb 14, 2025

Upper · Passed

The committee(s) on WAM will hold a public decision making on 02-18-25 10:01AM; Conference Room 211 & Videoconference.

upper

Feb 10, 2025

Committee

Reported from EDT (Stand. Com. Rep. No. 123) with recommendation of passage on Second Reading, as amended (SD 1) and referral to WAM.

upper

Jan 30, 2025

Upper · Passed

The committee(s) on EDT recommend(s) that the measure be PASSED, WITH AMENDMENTS. The votes in EDT were as follows: 3 Aye(s): Senator(s) DeCoite, Wakai, Kim; Aye(s) with reservations: none ; 0 No(es): none; and 2 Excused: Senator(s) Fukunaga, Awa.

upper

Jan 27, 2025

Upper · Passed

The committee(s) on EDT has scheduled a public hearing on 01-30-25 1:00PM; Conference Room 229 & Videoconference.

upper

Jan 17, 2025

Committee

Referred to EDT, WAM.

upper

Jan 15, 2025

Introduced

Introduced and passed First Reading.

upper

Jan 10, 2025

Introduced

Pending Introduction.

upper

6 primary · 2 co-sponsors