RELATING TO THE POMAIKAI HAWAII FUND.

SB2199

THE SENATE

S.B. NO.

2199

THIRTY-THIRD LEGISLATURE, 2026

STATE OF HAWAII

A BILL FOR AN ACT

relating
to the Pomaikai hawaii fund
.

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

����
SECTION 1.
�
The
legislature finds that a sovereign wealth fund is a state-owned investment fund
that holds and invests the state's assets to generate financial returns for the
long-term benefit of the state's citizens.
�
The legislature further finds that sovereign
wealth funds are typically established outside of the state budget and managed
with a long-term investment horizon, allowing governments to strengthen fiscal
stability, support economic development, and preserve wealth for future
generations.

����
The legislature additionally finds that
sovereign wealth funds are used globally as tools for economic development and
intergenerational equity that are at times used to support domestic
infrastructure and invest in strategic sectors while ensuring that revenues
from limited or extraordinary sources such as natural resources, budget surpluses,
or legal settlements are saved and invested prudently.
�
Globally, more than ninety countries and
certain regional governments, including U.S. states, operate sovereign wealth
funds as instruments for long-term economic stability and public benefit.
�
For example, Alaska's Permanent Fund invests a
portion of the state's oil revenues and distributes the earnings as annual
dividends to Alaska residents, providing them with a direct benefit from the
state's natural resource wealth while preserving principal for future
generations.

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The legislature further finds that
establishing a sovereign wealth fund for the State would provide a mechanism to
invest a portion of revenues from tourism, budget surpluses, legal settlements,
and other sources for the long-term benefit of residents of the State.
�
The legislature also finds that distributing
a portion of investment earnings to qualified residents as cash dividends may
help families experience a direct economic benefit from the tourism industry
and assist with the cost of essential household needs.
�
Direct payments to qualified residents from
investment earnings could assist with the high cost of living in the State
while ensuring that future generations share in the benefits of prudent fiscal
management.

����
Accordingly, the purpose of this Act is to
establish a state-owned sovereign wealth fund that is similar to the Alaska
Permanent Fund by allocating a portion of the State's revenues from the
transient accommodations tax, a percentage of state budget surpluses, a
percentage of moneys received from certain settlements or judgments in which
the State is a party, and a portion of the proceeds from the sale or other
disposition of public lands, to a state-owned sovereign wealth fund; investing
the
moneys in the
sovereign wealth fund to generate earnings; and
distributing the earnings as
cash
dividends
directly

to qualifying residents of the State
each year, beginning with
calendar year 2030
.

����
SECTION

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

"
Chapter

POMAIKAI HAWAII FUND

Part I.
�
General
Provisions

����
�
-1
�
Definitions.
�

As used in this chapter:

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"Board" means the board of directors

of the p
omaikai Hawaii fund

established
and
appointed pursuant to
section -
21
.

����
"Fund"
means the pomaikai Hawaii fund established
pursuant to
section
-
11
.

����
"Fund dividend" means earnings from
the investment of moneys in the pomaikai Hawaii fund that is distributed to qualifying
residents of the State.

Part iI.
�
Sovereign
wealth Fund

����
�
-
11
�
Pomaikai Hawaii fund; establishment.
�
(a)
�

There is established outside of the state treasury, a sovereign wealth
fund to be known as the pomaikai Hawaii fund
for the purposes of
investing the moneys in the fund and distributing the earnings as dividends to qualifying
residents of the State each year.
�

The fund shall be under the control of the
board and
placed under the department of budget and finance for administrative purposes.

����
(b)
�
The following
shall be deposited into the fund:

����
(1)
�
Revenues from the transient
accommodations tax allocated
to the fund
pursuant to section
237D-6.5;

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(2)
�
per cent
of the state general fund balance at the close of the fiscal year

whenever
state general fund revenues for each of the two successive
fiscal years exceeds revenues for each of the preceding fiscal years by
per cent;

����
(3)
�
Notwithstanding
any other law to the contrary,

per cent of all moneys received
as a settlement or judgment
through any
civil action in which the State is a party; except for those actions involving
departments able to procure their own legal services as provided for by section
28-8.3 and where no court order specifically provides for the deposit of moneys
received through the action;

����
(4)
�
Notwithstanding any other law to the
contrary, a portion of the proceeds from the sale or other disposition of
public lands, authorized out of the special land and development fund for
deposit into the fund by the legislature pursuant to section 171‑19(a)(12);

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(5)
�
Any other moneys as authorized or
appropriated by the legislature into the fund;

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(6)
�
Any other moneys received by the fund
from any other source
; and

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(7)
�
All
interests, dividends, or other income derived from the investment of moneys in
the fund.

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(c)
�
The
board may expend moneys from the fund to carry out the purposes of this
chapter.

Part iII.
�
Board
of Directors

����
�
-
21
�
Board of directors; established.

�
(a)
�
There
is established the board of directors of the pomaikai Hawaii fund to manage and
invest the moneys in the fund and distribute the earnings to qualified
residents of the State.

����
(b)
�
The board shall consist of

members
,
which shall include
:

����
(1)
�
Two

ex officio members consisting of the following, or their designees:

���������
(A)
�
The
director of finance; and

���������
(B)
�
The
director of business, economic development, and tourism;
and

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(2)
�

members

of the public
to be appointed by the governor as provided in section
26-34; provided that
p
ublic members shall
include
at least one member
from each of the counties of Honolulu, Hawaii, Maui,
and Kauai
; provided further that
at least
of the
public
members shall have knowledge and
expertise in finance, investments, or other business management‑related fields.

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(c)
�
The public members of the board shall serve
four-year staggered terms; provided that a public member m
ay be
reappointed for one additional consecutive four-year term.
�
If by the end of a public member's term, the public
member is not reappointed or the public member's successor is not appointed,
the public member shall serve until the public member's successor is appointed.

����
(
d
)
�

The board shall elect
from among its members,
a chairperson
,

vice chairperson
,

and a secretary-treasurer
.

����
(
e
)
�

A simple majority of members of the board shall constitute quorum to do
business.
�
Any action taken by the board
shall be approved by a simple majority of the members present.
�
All decisions of the board shall be
reduced to writing and shall state separately the board's findings of fact and
conclusions.

����
(
f
)
�

A vacancy on the board shall be filled for the remainder of the
unexpired term in the same manner as the original appointment.
�
Any vacancy on the board shall not impair the
authority of the remaining members to establish quorum by a simple majority of
the remaining members and to exercise all the powers of the board.

����
(
g
)
�

The members of the board shall serve without compensation but shall be
reimbursed for their actual and necessary expenses, including travel expenses,
incurred in carrying out their duties.

����
�
-
22
�
Board of directors; powers and duties.
�
In addition to any other powers and duties
authorized by law, the board shall:

����
(1)
�
Adopt, amend, and repeal rules in accordance
with chapter 91 to carry out the purposes of this chapter;

����
(
2
)
�
C
ollect,
receive, deposit, and withdraw moneys on behalf of the fund;

����
(
3
)
�
I
nvest
moneys in
fund in
the same manner specified in
section 88-119;

����
(4)
�
Assist residents of the State, particularly in
rural areas, who, because of language, disability, or inaccessibility to public
transportation, need assistance to establish eligibility and to apply for fund
dividends;

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(5)
�
Beginning with calendar year 2030, annually
pay fund dividends to qualifying residents of the State;

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(
6
)
�
M
ake
payments of periodic charges and pay for reasonable expenses incurred in
carrying out the purposes of the fund;

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(
7
)
�
C
ontract
for the performance of financial audits of the fund;

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(
8
)
�
R
etain
auditors, investment firms and managers, or other professional advisors to
carry out the purposes of this chapter
;

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(9)
�
Maintain accurate records and accounts of all
financial transactions of the fund that shall be audited annually and
summarized in an annual report to the governor and legislature;

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(10)
�
Maintain suitable and adequate records and
provide information upon request by State and county employers as necessary to
carry out the purposes of the fund;

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(11)
�
Procure fiduciary liability insurance and
error and omissions coverage for all directors; and

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(12)
�
Procure a fidelity bond of a reasonable amount
for the chairperson and any other person authorized to handle fund moneys.

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�
-
23
�
Administration; staff; legal advisor.
�
(a)
�
The
board shall appoint an administrator and staff as may be necessary to carry out
the functions of the board.

����
(b)
�

The administrator and staff shall serve at the pleasure of the board and
shall be hired without regard to chapter 76 but shall be eligible for
participation in state employee benefit plans.
�
Notwithstanding section 76-16(b)(17), this
exemption from chapter 76 shall not expire.

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(c)
�
The
attorney general shall serve as legal adviser to the board and shall provide
legal representation for the fund.

Part IV.
�

Dividends Distribution

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�
-
32
�
Eligibility; qualified resident; criteria.
�
(a)
�
A
qualified resident of the State is eligible to receive one fund dividend each
year in an amount to be determined by the board; provided that the individual
submits an application to the board in compliance with the procedures and
requirements established by the board by rule.
�

The board shall prescribe and furnish an application form for claiming a
fund dividend.

����
(b)
�
To be deemed a qualified resident of the
State, the individual shall:

����
(1)
�
Be a bona fide resident of the State on the
date of application;

����
(2)
�
Have been a bona fide resident of the State during
the entire calendar year preceding the current dividend year; and

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(3)
�
Meet all other requirements the board deems to
be just and reasonable.

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(c)
�
The board shall adopt rules pursuant to
chapter 91 that establish:

����
(1)
�
Eligibility criteria for fund dividends,
including:

���������
(A)
�
Exceptions to the residency criteria in
subsection (b); and

���������
(B)
�
Categories of individuals who shall be
excluded from eligibility;

����
(2)
�
Standards applied by the board to determine an
applicant's eligibility, which may include a requirement that an applicant
provide proof of eligibility;

����
(3)
�
P
rocedures and time limits for claiming
a fund dividend;
provided that the board shall d
etermine
the number of eligible applicants by October 1 of the year for which the
dividend is declared and pay the dividends by December 31 of that year
; and

����
(4)
�
Procedures and time limits for an applicant to
appeal the board's determination on the eligibility of the applicant.

����
(d)
�
The board shall consider all relevant information
and circumstances in determining the eligibility of an individual, including
information available from other state agencies.

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�
-
33
�
Amount of fund dividends; public notice.
�
(a)
�
Beginning
October 1, 2030, and by October 1 of each year thereafter, the board shall
determine the amount of fund dividends to be paid to each qualified resident of
the State that year and issue a public notice of the amount.
�
The board shall also post the notice on its
website."

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SECTION

3
.
�
Section 171-19,
Hawaii Revised Statutes, is amended by amending subsection (a) to read as
follows:

����
"(a)
�
There is created in the department a special
fund to be designated as the "special land and development
fund".
�
Subject to the Hawaiian
Homes Commission Act of 1920, as amended, and section 5(f) of the Admission Act
of 1959, all proceeds of sale of public lands, including interest on deferred
payments; all moneys collected under section 171-58 for mineral and water
rights; all rents from leases, licenses, and permits derived from public lands;
all moneys collected from lessees of public lands within industrial parks; all
fees, fines, and other administrative charges collected under this chapter and
chapter 183C; a portion of the highway fuel tax collected under chapter 243; a
portion of the transient accommodations tax under chapter 237D; all moneys collected
by the department for the commercial use of public trails and trail accesses
under the jurisdiction of the department; and private contributions for the
management, maintenance, and development of trails and accesses shall be set
apart in the fund and shall be used only as authorized by the legislature for
the following purposes:

����
(1)
�
To reimburse the general fund of the
State for advances made that are required to be reimbursed from the proceeds
derived from sales, leases, licenses, or permits of public lands;

����
(2)
�
For the planning, development,
management, operations, or maintenance of all lands and improvements under the
control and management of the board pursuant to title 12, including but not
limited to permanent or temporary staff positions who may be appointed without
regard to chapter 76;

����
(3)
�
To repurchase any land, including
improvements, in the exercise by the board of any right of repurchase
specifically reserved in any patent, deed, lease, or other documents or as
provided by law;

����
(4)
�
For the payment of all appraisal fees;
provided that all fees reimbursed to the board shall be deposited in the fund;

����
(5)
�
For the payment of publication notices
as required under this chapter; provided that all or a portion of the
expenditures may be charged to the purchaser or lessee of public lands or any
interest therein under rules adopted by the board;

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(6)
�
For the management, maintenance, and
development of trails and trail accesses under the jurisdiction of the
department;

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(7)
�
For the payment to private land
developers who have contracted with the board for development of public lands
under section 171-60;

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(8)
�
For the payment of debt service on
revenue bonds issued by the department, including revenue bonds issued for the
purposes of section 237D-6.5(b)(4), and the establishment of debt service and
other reserves deemed necessary by the board;

����
(9)
�
To reimburse the general fund for debt
service on general obligation bonds issued to finance departmental projects,
including projects under section 237D-6.5(b)(4), where the bonds are designated
to be reimbursed from the special land and development fund;

���
(10)
�
For the protection, planning,
management, and regulation of water resources under chapter 174C;

���
(11)
�
For the purposes of section
237D-6.5(b)(4); [
and
]

���
(12)
�
For deposit into the pomaikai Hawaii
fund established pursuant to section -11; provided that this
paragraph shall only apply to proceeds from the sale or other disposition of
public lands; and

��
[
(12)
]

(13)
�

For other purposes of this chapter."

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SECTION 4.
�

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

����
"
�
235-
�
Pomaikai
Hawaii fund dividends exemption.
�
This chapter shall not apply to amounts received as
a fund dividend pursuant to chapter .
"

����
SECTION
5.
�
Section 237D-6.5, Hawaii Revised
Statutes, is amended by amending subsection (b) to read as follows:

����
"(b)
�
Except for the revenues collected pursuant to
section 237D-2(e), revenues collected under this chapter shall be distributed
in the following priority, with the excess revenues to be deposited into the
general fund:

����
(1)
�
$1,500,000 shall be allocated to the Turtle
Bay conservation easement special fund beginning July 1, 2015, for the
reimbursement to the state general fund of debt service on
reimbursable
general obligation bonds
, including ongoing expenses related
to the issuance of the bonds, the proceeds of which were used to acquire the
conservation easement and other real property interests in Turtle Bay, Oahu,
for the protection, preservation, and enhancement of natural resources
important to the State, until the bonds are fully amortized;

����
(2)
�
$11,000,000 shall be allocated to the
convention center enterprise special fund established under section 201B-8;

����
(3)
�
An allocation shall be deposited into
the tourism emergency special fund, established in section 201B‑10, in a
manner sufficient to maintain a fund balance of $5,000,000 in the tourism
emergency special fund;
[
and
]

����
(4)
�
$3,000,000 shall be allocated to the
special land and development fund established under section 171-19 for:

���������
(A)
�
The protection, preservation,
maintenance, and enhancement of natural resources, including beaches;

���������
(B)
�
Planning
, construction, and repair of
facilities;

���������
(C)
�
Operation
,
maintenance
, and improvement
costs of public lands,
including beaches; and

���������
(D)
�
Any
related debt service and financing agreement costs[
.
]
; and

����
(5)
�
$

shall be allocated to the pomaikai Hawaii fund established under s
ection

-11
.

����
All
transient accommodations taxes shall be paid into the state treasury each month
within ten days after collection and shall be kept by the state director of
finance in special accounts for distribution as provided in this subsection."

����
SECTION 6.
�

The director of finance shall provide guidance
to the
board of directors of the pomaikai Hawaii fund
on the establishment and
administration of the pomaikai Hawaii fund, including but not limited to:

����
(
1
)
�
The
structure of dividend distributions to
qualified residents of the State,

including
but not limited to
:

���������
(A)
�
Eligibility
criteria to receive
fund
dividends;

����
����
(
B
)
�
Calculation method for determining the amount
of fund
dividend
s to be distributed each year
;
and

���������
(C)
�
Management of earnings from the investment of
moneys in the fund, including whether a separate account should be created
within the fund.

����
(
2
)
�
Investment
criteria for the pomaikai Hawaii fund; and

����
(
3
)
�
Any
other policies or procedures necessary to ensure transparency, accountability,
and fiscal responsibility in the administration of the pomaikai Hawaii fund.

����
SECTION
7
.
�
The
board of directors of the pomaikai Hawaii fund
shall
submit a report o
n

the status and progress of the pomaikai Hawaii fund,
including any
findings
,
recommendations,
and
proposed
legislation, to the legislature no later than twenty days prior to the
convening of the regular session
s
of
2027, 2028, and 2029
.

����
SECTION 8.
�

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

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SECTION
9
.
�
This Act shall take effect upon its approval
;
provided that section 4 shall apply to taxable years beginning after December
31, 2029.

INTRODUCED
BY:

_____________________________

Report Title:

Director
of Finance; Pomaikai Hawaii Fund; Sovereign Wealth Fund; Special Land and
Development Fund;
Investment;
Dividend
Distribution
;
Qualified
Residents;
Rules; Reports

Description:

Establishes
the Pomaikai Hawaii Fund
, a state-owned sovereign wealth fund, into which certain

p
ortions of
the t
ransient
accommodations tax
revenues
, moneys from general fund balance surpluses, moneys from civil
action settlements where the State is a party, and a portion of the proceeds
from the sale or other disposition of public lands
shall be
deposited
.
�
Establishes a
B
oard of
Directors
to
manage and invest the moneys in the Fund and
distribute the earnings to qualified residents of the State beginning calendar
year 2030
.
�
Requires the Board to adopt rules.
�
Requires the Director of Finance to provide guidance
to the Board

on the establishment and administration of the
F
und
.
�
Requires reports to the Legislature.

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