RELATING TO A WORKFORCE BUILDER TAX CREDIT.

HB2212

HOUSE OF REPRESENTATIVES

H.B. NO.

2212

THIRTY-THIRD LEGISLATURE, 2026

STATE OF HAWAII

A BILL FOR AN ACT

RELATING
TO A WORKFORCE BUILDER TAX CREDIT
.

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

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SECTION 1.
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The legislature finds that Hawaii's long-term
economic competitiveness depends on a skilled, adaptable, and locally trained
workforce aligned with the needs of the State's private-sector employers.
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Employers across multiple industries report
that the costs associated with recruiting, training, and supervising interns
and apprentices are a significant barrier to expanding work-based learning
opportunities.

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The legislature further finds that,
while Hawaii currently provides indirect workforce support through grants,
training reimbursements, and federal programs, the State does not offer a
direct, broad-based tax incentive to encourage private-sector employers to
create and sustain internship and apprenticeship placements.
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While the State has established
workforce-related tax credits and incentive programs administered by the
department of labor and industrial relations, employer participation in certain
existing credit programs has been limited, in part due to narrow eligibility
criteria, administrative complexity, and lack of alignment with employer-driven
workforce needs.

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The legislature also finds that
employer-led, demand-driven workforce initiatives have demonstrated higher
levels of private-sector engagement.
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In
particular, sector partnerships coordinated by the Chamber of Commerce Hawaii
have successfully engaged a broad cross-section of employers to collaboratively
identify workforce needs, develop training pathways, and support work-based
learning opportunities aligned with industry demand.

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The legislature additionally finds
that expanding private-sector participation in internships and apprenticeships
requires a broad-based and accessible incentive that complements existing
workforce programs, leverages proven employer networks, and reduces the cost
barriers faced by businesses � particularly small- and medium-sized employers �
when offering paid work-based learning placements.

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The purpose of this Act is to
establish a workforce builder tax credit to incentivize private-sector
employers to provide paid internships and apprenticeships, increase employer
participation in work-based learning, and strengthen Hawaii's workforce
pipeline through employer-led, industry-aligned pathways.

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SECTION 2.
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Chapter 235, Hawaii Revised Statutes, is
amended by adding a new section to be appropriately designated and to read as
follows:

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"
�235-
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Workforce
builder tax credit.
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(a)
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There shall be allowed to each eligible employer subject to the taxes
imposed under this chapter a nonrefundable income tax credit for each qualified
intern or qualified apprentice employed by the eligible employer during the
taxable year.

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(b)
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The
amount of the tax credit shall be:

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(1)
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$1,000 for each
qualified intern; or

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(2)
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$2,000 for each
qualified apprentice,

employed by the eligible employer during the
taxable year; provided that the total credit claimed by any eligible employer under
this section shall not exceed the eligible employer's tax liability for the
taxable year.

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(c)
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The
department of taxation shall allow the credit under this section upon
certification by the department of labor and industrial relations that the
eligible employer has employed a qualified intern or qualified apprentice
during the taxable year.

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(d)
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The
total amount of tax credits allowed under this section shall not exceed
$5,000,000 in the aggregate for all taxable years combined; provided that the
department of taxation shall disallow any credit claimed once the aggregate cap
has been reached.

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(e)
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The
department of labor and industrial relations, in coordination with the
department of taxation, shall adopt rules pursuant to chapter 91 necessary to
carry out the purposes of this section.

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(f)
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This
section shall apply to taxable years beginning after December 31, 2026.

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(g)
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As
used in this section:

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"Eligible employer" means a
private-sector business entity subject to taxation under this chapter that
employs one or more qualified interns or qualified apprentices in the State.

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"Qualified apprentice" means an
individual who is:

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(1)
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A resident of
the State; and

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(2)
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Employed by an
eligible employer and registered in a state or federally recognized
apprenticeship program.

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"Qualified intern" means an
individual who is:

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(1)
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A resident of
the State;

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(2)
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Engaged in a
paid internship or work-based learning placement with an eligible employer for
no less than three months during the taxable year; and

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(3)
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Participating
in a structured internship or work-based learning program connected to an
educational institution, workforce training program, or industry-recognized
credential pathway, as determined by the department of labor and industrial
relations.
"

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SECTION 3.
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The department of labor and industrial
relations, in coordination with the department of taxation, shall submit a
report to the legislature no later than December 1, 2029, on the
implementation and effectiveness of the workforce builder tax credit.
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The report shall include:

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(1)
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The number of
participating employers;

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(2)
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The number of
interns and apprentices supported;

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(3)
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The i
ndustry
sectors represented;

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(4)
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The fiscal impact
of the tax credit; and

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(5)
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Any recommendation
for continuation, modification, or expansion of the program.

The report shall be submitted in accordance with
section 93-16, Hawaii Revised Statutes
.

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SECTION 4.
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There is appropriated out of the general
revenues of the State of Hawaii the sum of $5,000,000 or so much thereof as may
be necessary for fiscal year 2026-2027 to implement the workforce builder tax
credit established under this Act.

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The sum appropriated shall be
expended by the department of taxation for the purposes of this Act.

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SECTION 5.
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New statutory material is underscored.

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SECTION 6.
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This Act shall take effect on July 1, 2026.

INTRODUCED BY:

_____________________________

Report Title:

Taxation;
DLIR; Income Tax; Workforce Builder Tax Credit; Report; Appropriation

Description:

Establishes
an income tax credit for eligible employers who employ qualified interns or
apprentices.
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Requires the Department of Labor
and Industrial Relations, in coordination with the Department of Taxation, to report
to the Legislature on the tax credit.
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Appropriates funds.

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