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SB3168
THE SENATE
S.B. NO.
3168
THIRTY-THIRD LEGISLATURE, 2026
STATE OF HAWAII
A BILL FOR AN ACT
relating
to economic development
.
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 the
Hawaii technology development corporation (HTDC)
established in 1983 under chapter 206M, Hawaii Revised Statutes, serves as the
State's lead agency for supporting the growth and diversification of the
State's technology, innovation, and manufacturing sectors.
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Over the past four decades, HTDC has advanced
statewide initiatives that have helped small businesses and entrepreneurs
expand into global markets, supported the development of clean and renewable
energy technologies, and strengthened the State's manufacturing and innovation
ecosystem through programs such as the Hawaii small business innovation
research program, the manufacturing assistance program, and the accelerator
program.
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The
legislature further finds that HTDC has played a
critical role in positioning innovation and technology as key pillars of the
State's economic development strategy.
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Through partnerships with federal agencies, universities, and local
businesses, HTDC has helped attract federal investment, foster workforce
development, and cultivate high-growth industries that contribute to long-term
job creation and the State's economic resilience.
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The
legislature, however, finds that many federal grants
require state matching funds, often ranging from one-to-one to one-to-five
ratios between state and federal contributions.
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The current process securing these matching funds is not aligned with federal
grant timelines, forcing state agencies to seek emergency or ad hoc
appropriations after federal awards are announced.
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This misalignment reduces the State's
competitiveness and risks forfeiting millions in potential federal dollars that
could support the State's economic diversification goals.
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The
legislature
further finds that consistent
and predictable state support is essential for HTDC to continue fulfilling its
mission as an economic driver.
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By
providing access to timely matching funds, the legislature can ensure that the
State remains competitive in securing federal awards that amplify local
investment, support small businesses, and advance the goals of a diversified
and innovation-based economy.
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The legislature also finds that the establishment of a revolving
fund will ensure that HTDC has timely access to matching funds when applying
for and administering eligible federal grants.
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The fund shall only be allocated if HTDC successfully secures a federal
award that requires a state match, thereby safeguarding state resources while
enhancing the State's ability to leverage federal investment.
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Accordingly, the purpose of this Act is to p
rovide
a dedicated source of funds to be used by the Hawaii technology development
corporation to finance the State's matching contributions required by federal
grants supporting innovation, technology, research, and manufacturing
initiatives by establishing the
Hawaii technology development
corporation revolving fund, which shall be administered by the Hawaii
technology development corporation.
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SECTION
2.
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Chapter 206M, Hawaii Revised
Statutes, is amended by adding a new section to part I to be appropriately
designated and to read as follows:
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"
�206M-
�
Hawaii technology development corporation
revolving fund.
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(a)
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There is
established within the state
treasury the Hawaii technology development corporation revolving fund to be
administered by the Hawaii technology development corporation.
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(b)
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The purpose of the
revolving fund shall be to provide state matching funds required for federal
grants awarded to the Hawaii technology development corporation that support
innovation, technology, research, manufacturing, or other economic development
initiatives consistent with the corporation�s mission and statutory authority.
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(c)
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Moneys in the revolving
fund shall be expended by the corporation for the following purposes:
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(1)
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To provide
state matching funds for federal grants awarded to
the corporation that require a state contribution as a condition of the award;
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(2)
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To cover
administrative costs directly associated with the
management of the grants or the revolving fund; and
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(3)
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To support
related activities approved by the board of directors
that are necessary to fulfill federal grant obligations.
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(d)
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The
revolving fund shall consist of:
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(1)
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Legislative appropriations;
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(2)
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Transfers
from other funds as authorized by law;
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(3)
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Federal funds received by the corporation as part of grant
awards;
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(4)
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Repayments
or reimbursements associated
with prior grant activities; and
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(5)
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Any
interest earned on the revolving
fund balance.
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(e)
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Moneys
in the revolving fund shall not lapse at the end of any fiscal
year and shall remain available for expenditure until the conclusion of the
application federal grant contract or until otherwise terminated in accordance
with federal and state law.
"
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SECTION
3.
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Notwithstanding
any other law to the contrary, the moneys
appropriated by this Act shall not be allocated or expended unless the Hawaii technology
development corporation has been formally awarded a federal grant requiring a
state match.
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Upon notice of a federal
grant award to the corporation requiring a state match, the director of finance
shall transfer from the general fund to the Hawaii technology development
corporation revolving fund an amount not to exceed the matching requirement, up
to the available balance authorized by this Act.
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If
the
corporation does not receive a qualifying federal award during
the fiscal period, no allocation shall be made.
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SECTION
4.
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The Hawaii technology development
corporation
shall
submit an annual report to the legislature no later than twenty days prior to
the convening of each regular session.
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The annual report shall include:
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(1)
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The balance of the
Hawaii technology development corporation
revolving
fund;
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(2)
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A
list of federal grant applications and awards requiring matching
funds;
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(3)
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The
amount of state funds used as matching funds; and
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(4)
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The
outcomes and economic impact of each federally matched project.
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SECTION
5.
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There is appropriated out of the
general revenues of the State of Hawaii the sum of $10,000,000 or so much
thereof as may be necessary for fiscal year 2026-2027
to be deposited into the Hawaii technology
development corporation revolving fund
.
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The
sum appropriated shall be expended by the Hawaii technology development
corporation for the purposes of this Act.
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SECTION 6.
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New statutory material is underscored.
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SECTION
7.
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This Act shall take effect on July 1,
2026.
INTRODUCED BY:
_____________________________
Report Title:
HTDC;
Revolving Fund; Innovation and Manufacturing; Reports; Appropriation
Description:
Establishes the
Hawaii Technology Development Corporation Revolving Fund to provide state
matching funds for federal grants awarded to the Hawaii Technology Development
Corporation that support innovation, technology, research, and manufacturing
initiatives.
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Requires annual reports to
the Legislature.
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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.