RELATING TO BUSINESS COMPETITIVENESS.

SB2263

THE SENATE

S.B. NO.

2263

THIRTY-THIRD LEGISLATURE, 2026

STATE OF HAWAII

A BILL FOR AN ACT

relating
to business competitiveness
.

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 ranks among the least competitive states for
business in national assessments.
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For
example, CNBC's "America's Top States for Business" listing, which
scores each state using one hundred thirty-five metrics in ten broad categories
of competitiveness, ranked Hawaii fiftieth in 2024 and forty-ninth in 2025.

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The legislature finds that Hawaii's low
ranking in the CNBC "America's Top States for Business" listing and
similar rankings elsewhere is due to the challenges that Hawaii businesses
face, which include high regulatory burdens and slow governmental processes.
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These issues collectively hinder economic
growth and threaten Hawaii's long-term prosperity.

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The legislature further finds that the
business revitalization task force, established by Act 142, Session Laws of
Hawaii 2024, was formed to identify strategies to improve Hawaii's business
climate.
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The task force recommended the
creation of a permanent framework to advance business competitiveness through
sustained policy development and stakeholder engagement.

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Accordingly, the purpose of this Act is to:

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(1)
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Establish
a statutory goal for the State to achieve a ranking among the top states in the
nation for business competitiveness by the year 2045; and

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(2)
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Require
the department of business, economic development, and tourism to establish a business
climate improvement working group to work with private sector organizations and
other relevant parties to develop and recommend policies that improve Hawaii's
business competitiveness.

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SECTION 2.
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Chapter 201, Hawaii Revised Statutes, is amended by adding a new part to
be appropriately designated and to read as follows:

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Part
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.
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HAWAII BUSINESS COMPETITIVENESS

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�201-A
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Ranking metric; definition; selection by department.
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(a)
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As
used in this part, "ranking metric" means a publication that:

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(1)
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Measures
each state's business competitiveness by considering data and other information
in the following categories:

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(A)
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Economy:
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Measures economic strength through gross
domestic product and job growth, fiscal stability, credit ratings, real estate
health, business diversity, trade exposure, and new business survival;

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(B)
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Infrastructure:
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Assesses transportation networks, utilities,
broadband, site readiness, land availability, market access, and climate
resiliency;

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(C)
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Workforce:
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Evaluates skilled labor availability,
education levels, migration of talent, productivity, training programs, and
labor flexibility;

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(D)
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Cost
of doing business:
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Examines tax
competitiveness, wages, utilities, property and insurance costs, and business
incentives;

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(E)
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Business
friendliness:
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Focuses on regulatory and
legal environments, permitting efficiency, land
‑
use rules, and
support for emerging industries;

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(F)
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Quality
of life:
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Measures livability, including
safety, environment, health care, childcare, worker rights, inclusiveness, and
reproductive freedoms;

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(G)
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Technology and Innovation:
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Captures innovation capacity via patents,
research funding, research and development support, and participation in the
semiconductor and artificial intelligence sectors;

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(H)
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Education:
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Assesses kindergarten through twelfth grade and higher education
systems, funding, access, and workforce alignment through community colleges
partnerships;

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(I)
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Access to capital:
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Measures availability of venture capital,
bank lending, state-backed financing, and foreign direct investment; and

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(J)
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Cost of living:
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Evaluates affordability through housing,
consumer goods, and insurance costs, factoring inflation and overall living
expenses; and

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(2)
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Ranks
each state's business competitiveness in relation to each other using the
categories of metrics described in paragraph (1).

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(b)
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The department shall select a ranking metric that meets the definition
in subsection (a); provided that if the department's selected ranking metric is
discontinued, the department shall select an alternative national ranking
metric that provides a comprehensive and balanced assessment of state business
competitiveness.

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�201-B
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State commitment to business competitiveness improvement.

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(a)
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It
shall be the goal of the State to achieve a ranking among the top ten states in
the nation for business competitiveness by 2045, as measured by the ranking
metric.

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(b)
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In addition to the goal established in subsection (a), it shall be the
goal of the State to achieve the following interim rankings, as measured by the
ranking metric:

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(1)
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Forty-fifth
or better by 2030;

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(2)
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Thirtieth
or better by 2035; and

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(3)
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Twentieth
or better by 2040.

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�201-C
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Business climate improvement working group.
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(a)
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The
department shall establish a business climate improvement working group, which
shall
develop targeted policies and legislative
proposals to improve Hawaii's business competitiveness
.

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(b)
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The director of business, economic development, and tourism shall
appoint members to the working group and shall designate a member to serve as
chairperson.
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Working group members may
include representatives from private sector organizations and any other parties
having experience or expertise relevant to the improvement of the State's
business competitiveness.

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(c)
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In developing policies and proposals, the working group shall:

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(1)
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Consult
with persons from business groups, labor unions, community groups, and other
government entities; and

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(2)
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Review
and analyze relevant research, including:

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(A)
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Reports
from the department;

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(B)
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The
Chamber of Commerce Hawaii's 2030 Blueprint;

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(C)
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The
office of planning and sustainable development's comprehensive economic development
strategy reports for the State and each county;

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(D)
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Studies
and other publications from the university of Hawaii economic research organization;
and

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(E)
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Recommendations
by the business revitalization task force established by Act 142, Session Laws
of Hawaii 2024.

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(d)
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Members
of the working group shall serve without compensation, but may be reimbursed
for reasonable expenses, including travel expenses, necessary for the
performance of their duties.

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�201-D
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Annual report.
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No later than
twenty days prior to the convening of each regular session, the working group
shall submit a report to the legislature that includes:

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(1)
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An
assessment of the State's progress in meeting the goals established by section
201-B, including the State's progress in improving the State's scores in the
ranking metric; and

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(2)
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Proposed
policies, including any proposed legislation, to improve Hawaii's business
competitiveness."

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SECTION 3.
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There is appropriated out of the general revenues of the State of Hawaii
the sum of $300,000 or so much thereof as may be necessary for fiscal year
2026-2027 for independent research, staffing, travel, and other expenses for
the purposes of this Act.

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

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SECTION 4.
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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.

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SECTION 5.
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This Act shall take effect on July 1, 2026.

INTRODUCED BY:

_____________________________

Report Title:

DBEDT; Business Competitiveness; Business Climate
Improvement Working Group; Reports; Appropriation

Description:

Establishes a goal for the State to achieve a ranking
among the top 10 states in the nation for business competitiveness by 2045.
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Establishes a ranking metric and interim
goals.
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Requires the Department of Business,
Economic Development, and Tourism to establish a working group to develop and
recommend policies that improve Hawaii's business competitiveness.
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Requires annual reports to Legislature.
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Appropriates moneys.

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