State lawmakers passed over 250 bills this legislative session. That’s a lot to keep track of, so HPR has narrowed down a list of some key legislative measures.
All measures passed by lawmakers will go to Gov. Josh Green for his signature. If he decides to veto a bill, lawmakers can override it with a two-thirds majority vote in both chambers.
1. Changes to income taxes and popular tax credits: SB 3125
Lawmakers passed a measure that would alter the historic income tax cut that went into effect last year and several popular tax credits — including one for rooftop solar.
That tax cut started last year for all Hawaiʻi residents, including its highest income earners. It’s expected to cost the state over $1 billion when it’s in full effect.
Due to cuts in federal funding, the state is expected to be in a $400 million financial hole by 2032 under the current income tax plan.
The new proposal attempts to make up some of the loss of funds while continuing income tax cuts for most tax brackets. It pauses future cuts for the top four income levels — individuals who make more than $175,000 a year and married couples making more than $350,000 dollars a year.
It also creates a new bracket for millionaire households. It would tax any income over $1 million for joint-filers and $500,000 for single-filers at 13%.
The measure also continues to increase the standard deduction. By the time it is fully implemented in 2031, it will be nearly six times higher from what it was before the law went into effect in 2024.
The measure also phases out tax credits over the next several years. Notably, the proposal will sunset the Capital Goods Tax Credit that businesses can claim when they buy things like machinery or equipment in 2028.
It also includes the phase out of the Renewable Energy Tax Credit, which is largely used for rooftop solar.
The proposal caps the amount that the state can spend on the credit at $40 million annually for four years and ends the tax credit completely in 2031. It also restricts the tax credit to individuals making less than $175,000 a year or married couples making $350,000.
That prompted significant pushback from leaders in Hawaiʻi's solar industry.
“This is not a phase-out. It is an immediate shutdown," said Rocky Mould, Hawaiʻi Solar Energy Association's executive director.
“Rooftop solar and storage is one of the most effective tools for Hawaiʻi families to protect themselves from high electricity rates, volatile fossil fuel prices and weather-related grid outages. This bill makes that protection harder to access and more expensive at exactly the moment Hawaiʻi families need it most."
House Finance Chair Chris Todd said on the floor ahead of the passage of the bill that he would be working to curb some of the changes to the tax credits, particularly the renewable energy tax credit.
“Should our budget situation improve, I look forward to finding a way forward to restructure or preserve some of these credits,” he said.
2. Curbing influence in elections: SB 2471
Hawaiʻi could lead a nationwide effort in eliminating corporate influence in elections.
State and federal lawmakers across the country have been unable to ban companies from donating to campaigns because of the 2010 U.S. Supreme Court decision in Citizens United v. Federal Election Commission.
The court determined that regulating the right of corporations to spend independently in elections was unconstitutional.
A state bill that passed through the session now focuses on the state’s right to define what a corporation is. The argument in the measure involves a portion of Hawaiʻi law that grants corporations, nonprofits and other businesses the same powers as individuals.
SB 2471 would change the definition of those groups.
“This bill asserts Hawaiʻi's right to define what powers and privileges corporations have and clarify that they do not include the power to influence our elections,” said Sen. Jarrett Keohokalole, who chairs the Senate Committee on Commerce and Consumer Protection.
“This is about the dark money that can be shielded from view by the creation of shell corporations. Individuals still maintain their individual right to spend on elections to form super PACs, but you cannot hide behind a corporate form in Hawaiʻi and influence elections anymore.”
The passage of the bill is likely to trigger a lawsuit arguing that it is prohibiting corporations’ First Amendment rights, as decided in the Citizens United case.
If the new law holds up in court, corporations — both those based in Hawaiʻi or outside the state — “shall not have the power to expend moneys on or participate in any election activity or ballot-issue activity,” according to the measure.
But if it fails in court, the bill could inadvertently limit just Hawaiʻi organizations.
During Friday’s final floor vote Rep. Scot Matayoshi, chair of the House Committee on Consumer Protection and Commerce, said, “My fear was that if that provision is struck down and we bind our Hawaiʻi entities while not binding mainland activity coming in, we will effectively be silencing Hawaiʻi voices and only allowing mainland voices in our politics.”
To prevent this outcome, a provision in the measure would ensure that outside corporations don’t have more powers than local ones.
“If it doesn't hold, the fail-safe will kick in and we'll unbind the hands of our local organizations as well,” Matayoshi said.
The bill doesn’t go into effect until July 1, 2027, in part so lawmakers and other stakeholders can work out some of the lingering questions of who will be impacted.
That includes unions, though Matayoshi said they shouldn’t be impacted too much.
“We're going to have to work out some language too, and we may in the subsequent session refine it to make sure that they're not impacted too much,” Matayoshi said. “But because pretty much all unions operate through a PAC anyway, and those contributions to the PAC are already within the limits, it shouldn't affect unions much.”
3. Bills to safeguard immigrant rights: SB 2057, HB 1870, HB 1839
Lawmakers passed three bills that aim to improve due process protections following the spike in federal immigration enforcement, explained Liza Ryan Gill, co-coordinator of the Hawaiʻi Coalition for Immigrant Rights.
“These particular bills really have to do with what we've been talking about, which is due process, that we can't stop the federal government from doing its job, but we can maintain and set very clear boundaries on what is in the Constitution,” she said. “If they are going to do their job, they have to do it in the right way.”
One measure would require state and county law enforcement to inform people of their rights before they speak with immigration enforcement authorities. Law enforcement must also record and retain records of what language was used, if the person consented to the interview and when the interview happened.
Another measure would require immigration officers to have a judicial warrant to enter protected community areas like schools, hospitals and churches. It reverts enforcement actions closer to a previous policy that the U.S. Department of Homeland Security operated under before President Donald Trump took office.
Lawmakers also passed a bill that would bar local law enforcement from entering into agreements with Immigration and Customs Enforcement to act as immigration enforcement officers.
Hawaiʻi is one of 11 states in the country that does not currently participate in the program.
4. Hawaiʻi to become the first state in the country to ban disposable e-cigarettes: SB 2175
State lawmakers passed a measure that would make it illegal to sell electronic smoking devices that don’t have refillable cartridges or a rechargeable battery.
Hawaiʻi would be the first state in the U.S. to ban the sale of disposable e-cigarettes. The United Kingdom passed a similar ban last year.
“Disposable e-cigarettes have become especially popular among teens because they are cheap, widely available, and easy to use,” said the youth council for the Coalition for a Tobacco-Free Hawaiʻi’ in written testimony. “Disposable e-cigarettes also have higher nicotine concentrations than previous generations of e-cigarettes. Despite many of these products being illegal in the United States, they remain accessible in our communities, demonstrating the urgent need for policy action.”
The measure also bars online retailers from shipping the disposable devices to the state. Retailers that violate the measure would be fined $1,000 a day.
Disposable e-cigarette sales increased by 500% between 2019 and 2023 in Hawaiʻi, and is the most common type of smoking device among young people. The ban would go into effect at the start of 2027.
5. Automatic Voter registration: SB 2239
Hawaiʻi lawmakers moved on a measure to create an “opt-out” system for voter registration in the state.
Under the new law, eligible residents applying for a state I.D. or driver’s license would be registered to vote automatically unless they opt out. Under the current system, residents have to actively choose, or “opt-in,” to be registered.
The measure is a win for voting rights advocates, who say it’s one less step for voters to participate in Hawaiʻi elections.
The ACLU of Hawaiʻi, in written testimony, said, “One of the most important mechanisms to a healthy democracy is easy access to voting. On this front, Hawaiʻi has made positive strides in recent years. … This bill continues that positive trend.”
Recent changes to voting in Hawaiʻi law also include all-mail voting.
The state is well-known for its low voter turnout.
6. AI regulation for children: SB 3001
Lawmakers will hold a final vote Wednesday on a bill that would require artificial intelligence operators to post visible disclaimers, making it clear that users are not speaking to a person.
The disclaimer would be required both at the beginning of the session and every hour if the user is a minor.
The measure requires AI chatbots to refer users who are threatening self-harm to crisis services. Those AI operators will need to submit reports to the state Department of Health about crisis intervention referrals and what was used to address suicidal ideation and harmful interactions.
It also creates an avenue for users to sue AI operators if they do not comply.
Seven states, including Washington, California and Oregon, already have laws to protect children from becoming emotionally involved with AI characters.
During the next legislative session, Rep. Scot Matayoshi hopes to add stronger protections to the law to regulate romantic relationships between AI chatbots and children.
7. Funding set aside
The state Legislature set aside $50 million each for Hawaiʻi’s “rainy day” fund, also known as the Emergency and Budget Reserve Fund, and its Major Disaster Fund.
With the additional funding, the rainy day would stand at $1.67 billion. The fund has tripled in size since 2019.
“In the case that there are additional disasters or additional situations, we did not touch the rainy day, which puts us in a really healthy position — just in case there is something that's unanticipated that we have to deal with,” said Sen. Donovan Dela Cruz, who chairs the Senate Committee on Ways and Means.
The Legislature also passed in its budget $130 million in projects that will use the newly established Green Fee, a tax imposed on tourists visiting Hawaiʻi.
The funds are meant to go toward climate-related projects, but WAM inserted more loosely related projects, including $7 million for a Food and Product Innovation Network and $200,000 for a slaughterhouse.
House Speaker Nadine Nakamura also said that the legislature was able to grow its grants-in-aid funding for nonprofits from $30 million to $40 million, even during a tight budget year.
“We were challenged in so many ways this session with the two Kona low storms and the devastation that brought on so many communities around our state,” Nakamura said. “We got challenged by the federal cuts, the partial government shutdown … and then this war in Iran that is impacting every pocketbook for our residents here.”
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