RELATING TO OFFICE OF ENTREPRENEURSHIP.

HB521

HOUSE OF REPRESENTATIVES

H.B. NO.

521

THIRTY-THIRD LEGISLATURE, 2025

STATE OF HAWAII

A BILL FOR AN ACT

relating
to Office of Entrepreneurship
.

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

����
SECTION 1.
�
The legislature finds that entrepreneurship
is vital to the State's economic innovation.
�

Recent data evaluated an uptick in the rate of entrepreneurship.
�
In 2020, 4.1 out of every one thousand adults
became entrepreneurs in a given month.
�

However, high fees, complicated requirements, and delayed permitting
create barriers to starting a new business in the State.

����
According
to a 2019 Bureau of Labor Statistics study, fifty per cent of Hawaii businesses
close within the first six years.
�
More
than twenty-five per cent of businesses in Hawaii failed in their first
year.
�
This is the highest first-year
failure rate in the nation.

����
The
purpose of this Act is to establish the office of entrepreneurship and create a
partnership program with the Hawaii film and creative industries development
special fund.

����
SECTION 2.
�
The Hawaii Revised Statutes is amended by
adding a new chapter to be appropriately designated and to read as follows:

"
Chapter

Office of entrepreneurship

����
�

��
-A
�

Definitions.
�
For the purpose
of this chapter:

����
"Business" means any
corporation, partnership, company, cooperative, sole proprietorship, or other
legal entity organized or operating for pecuniary or nonpecuniary gain.

����
"Entrepreneur" means a
person who initiates and assumes the financial risk of a business.

����
"Office of entrepreneurship"
means the office of entrepreneurship created by section
���
-B.

����
"State agency" means an
agency, bureau, board, commission, department, division, or any other unit of
the executive department of the state government.

����
�
��
-B
�
Office of entrepreneurship; director; general
functions, duties, and powers.
�
(a)
�
There is established an office of
entrepreneurship that shall be temporarily placed within the office of the
governor; provided that on July 1, 2027, the office of entrepreneurship shall
be permanently established within the department of business, economic
development, and tourism for administrative purposes only.

����
(b)
�

The head of the office of entrepreneurship shall be known as the
director of the office of entrepreneurship, hereinafter referred as
director.
�
The director shall:

����
(1)
�
Be nominated by
the governor and, by and with the advice and consent of the senate, appointed
by the governor without regard to chapter 76;

����
(2)
�
Have professional
training in the field of business, marketing, community economic development,
or other relevant fields, preferably holding an academic degree in one of the
fields listed above;

����
(3)
�
Have experience in
programs or services related to business, marketing, community economic
development, or other relevant fields;

����
(4)
�
Have recent
experience in a supervisory, consultative, or administrative position;

����
(5)
�
Be paid a salary
set by the governor;

����
(6)
�
Be included in any
benefit program generally applicable to the officers and employees of the
State; and

����
(7)
�
Report to the
director of business, economic development, and tourism and not be required to
report directly to any other principal executive department.

����
(c)
�

The director shall be responsible for:

����
(1)
�
Serving as the
principal officer in state government responsible for the performance,
development, and control of programs, policies, and activities under the
jurisdiction of the office;

����
(2)
�
Supervising and
directing the performance of the director's subordinates in various activities,
including planning, evaluation, and coordination of office programs;

����
(3)
�
Administering
funds allocated for the office and applying for, receiving, and disbursing
grants and donations from all sources for office programs and services;

����
(4)
�
Assessing the
policies and practices of other agencies impacting economic development and
conducting advocacy efforts for entrepreneurship;

����
(5)
�
Advising agencies
on new legislation, programs, and policy initiatives relating to
entrepreneurship;

����
(6)
�
Employing and
retaining staff as may be necessary for the purposes of this section; and

����
(7)
�
Contracting for
services that may be necessary for the purposes of this section, including
through master contracts, memoranda of understanding, and memoranda of
agreement with other state agencies receiving federal and state funds for
programs and services for entrepreneurship, and purchase of service agreements
with appropriate agencies.

����
�
��
-C
�
Responsibilities.
�

(a)
�
The office of
entrepreneurship shall:

����
(1)
�
Work to strengthen
policies and programs supporting the growth of entrepreneurship in the State,
including, without limitation, across demographic segments and geographic
areas;

����
(2)
�
Work with
stakeholders and organizations supporting entrepreneurship to enhance the
learning and skills of, provide technical support to, and expand access to
resources for entrepreneurs across the State;

����
(3)
�
Serve as a point
of contact to assist businesses that have been in operation for not more than
five years in their interactions with state agencies and, where appropriate,
refer businesses to other state or local agencies that provide assistance to
businesses; and

����
(4)
�
Encourage five per
cent of the total number of state contracts to be awarded to businesses that
have been in operation for not more than five years and whose principal place
of business is in this State;

����
(5)
�
Serve as a liaison to provide resources to
help entrepreneurs navigate regulatory requirements; and

����
(6)
�
Advocate entrepreneurs in the legislative and
administrative rule-making process.

����
�
��
-D
�
Annual report.
�

(a)
�
At least twenty days prior to
the convening of each regular session of the legislature beginning two years
after the creation of the office of entrepreneurship, and annually thereafter,
the office of entrepreneurship shall submit to the legislature a report that
includes, without limitation:

����
(1)
�
The number and
total dollar amount of state contracts awarded to businesses that have been in
operation for not more than five years, including, without limitation, a
breakdown by demographic segments and geographical areas throughout the State;

����
(2)
�
The percentage of
the number of state contracts awarded to businesses that have been in operation
for not more than five years compared to the total number of contracts awarded;

����
(3)
�
The number of
businesses owned by women, minorities, or veterans that have been in operation
for not more than five years and have been awarded a state contract;

����
(4)
�
The percentage of
the total dollar amount of state contracts awarded to businesses that have been
in operation for not more than five years compared to the total dollar amount
of contracts awarded;

����
(5)
�
The types of
businesses awarded a state contract;

����
(6)
�
Recommendations on
improving access to state contracts for businesses that have been in operation
for not more than five years, including, without limitation, those businesses
in statistically underrepresented demographic segments and geographic areas of
Hawaii;

����
(7)
�
Recommendations on
improving overall entrepreneurship in this State including, without limitation,
identifying regional challenges to entrepreneurship; and

����
(8)
�
Any additional
information deemed necessary by the office of entrepreneurship to provide an
accurate depiction of the condition of entrepreneurship in Hawaii."

����
SECTION
3
.
�
Section 201-113, Hawaii Revised Statutes, is
amended to read as follows:

����
"
�201-113
�
Hawaii film and creative industries
development special fund.
�
(a)
�

There is established in the state treasury the Hawaii film and creative
industries development special fund into which shall be deposited:

����
(1)
�
Appropriations by
the legislature;

����
(2)
�
Donations and
contributions made by private individuals or organizations for deposit into the
fund;

����
(3)
�
Grants provided by
governmental agencies or any other source;

����
(4)
�
Effective January
2, 2023, all revenues, fees, and charges from the processing of the motion
picture, digital media, and film production income tax credit pursuant to
section 235-17; and

����
(5)
�
Effective
July 1, 2022, all existing and future revenues, fees, and income received by
the department from its management of public facilities that support media and
entertainment workforce and business development, with the exception of the
Hawaii film studio.

����
(b)
�

The fund shall be used by the department to provide for:

����
(1)
�
A
program to provide seed capital for film, media, electronic sports, and
creative industries intellectual property development projects for export, as
determined by the department;

����
(2)
�
Programs
that expand the skills of the State
ʹ
s resident workforce in the film,
media, and creative industries;

����
(3)
�
Marketing programs
that attract business opportunities in the film, media, and creative industries
in the State; [
and
]

����
(4)
�
A program in partnership with the office of
entrepreneurship; and

���
[
(4)
]

(5)
�
Repair, maintenance, and related costs of the
department's management of public facilities that support media and
entertainment workforce and business development."

����
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 for the purpose of establishing an
office the office of entrepreneurship.

����
The sums

appropriated shall be expended by the
department of business, economic development, and tourism for the purposes of
this Act.

����
SECTION 5.
�
In codifying the new sections added by
section 2 of this Act, the revisor of statutes shall substitute appropriate
section numbers for the letters used in designating the new sections in this
Act.

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

����
SECTION 7.
�
This Act shall take effect on July 1, 2025.

INTRODUCED BY:

_____________________________

Report Title:

Small
Business Caucus; Entrepreneurship; Appropriation

Description:

Establishes
the Office of Entrepreneurship. Creates a program in partnership with the
Hawaii film and creative industries development special fund.
�
Appropriates moneys to establish the Office of
Entrepreneurship.

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