SB 2263: DBEDT; Business Competitiveness; Business Climate Improvement Working Group; Reports; Appropriation

A BILL FOR AN ACT

RELATING TO BUSINESS COMPETITIVENESS.

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

     SECTION 1.  The legislature finds that Hawaii ranks among the least competitive states for business in national assessments.  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.

     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.  These issues collectively hinder economic growth and threaten Hawaii's long-term prosperity.

     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.  The task force recommended the creation of a permanent framework to advance business competitiveness through sustained policy development and stakeholder engagement.

     Accordingly, the purpose of this Act is to:

     (1)  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

     (2)  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.

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

"Part     .  HAWAII BUSINESS COMPETITIVENESS

     §201-A  Definitions.  As used in this part:

     "Department" means the department of business, economic development, and tourism.

     "Director" means the director of business, economic development, and tourism.

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

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

          (A)  Economy:  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;

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

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

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

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

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

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

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

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

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

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

     (b)  The department shall select a ranking metric that meets the definition in subsection (a) to carry out the purposes of this part; 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.

     §201-C  State commitment to business competitiveness improvement.  (a)  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 selected by the department pursuant to section 201-B.

     (b)  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:

     (1)  Forty-fifth or better by 2030;

     (2)  Thirtieth or better by 2035; and

     (3)  Twentieth or better by 2040.

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

     (b)  The director shall appoint members to the working group and shall designate a member to serve as chairperson.  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.

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

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

     (2)  Review and analyze relevant research, including:

          (A)  Reports from the department;

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

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

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

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

     (d)  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.

     §201-E  Annual report.  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:

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

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

     SECTION 3.  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 2026-2027 for independent research, staffing, travel, and other expenses for the purposes of this Act.

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

     SECTION 4.  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 5.  This Act shall take effect on July 1, 2050.

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.  Defines and requires the Department of Business, Economic Development, and Tourism to select a "ranking metric" and establishes interim goals.  Requires DBEDT to establish a working group to develop and recommend policies that improve Hawaii's business competitiveness.  Requires annual reports to Legislature.  Appropriates funds.  Effective 7/1/2050.  (SD1)

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

A BILL FOR AN ACT

relating to business competitiveness.

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

     SECTION 1.  The legislature finds that Hawaii ranks among the least competitive states for business in national assessments.  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.

     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.  These issues collectively hinder economic growth and threaten Hawaii's long-term prosperity.

     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.  The task force recommended the creation of a permanent framework to advance business competitiveness through sustained policy development and stakeholder engagement.

     Accordingly, the purpose of this Act is to:

     (1)  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

     (2)  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.

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

"Part   .  HAWAII BUSINESS COMPETITIVENESS

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

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

          (A)  Economy:  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;

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

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

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

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

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

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

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

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

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

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

     (b)  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.

     §201-B  State commitment to business competitiveness improvement.  (a)  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.

     (b)  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:

     (1)  Forty-fifth or better by 2030;

     (2)  Thirtieth or better by 2035; and

     (3)  Twentieth or better by 2040.

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

     (b)  The director of business, economic development, and tourism shall appoint members to the working group and shall designate a member to serve as chairperson.  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.

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

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

     (2)  Review and analyze relevant research, including:

          (A)  Reports from the department;

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

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

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

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

     (d)  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.

     §201-D  Annual report.  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:

     (1)  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

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

     SECTION 3.  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.

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

     SECTION 4.  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 5.  This Act shall take effect on July 1, 2026.

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.  Establishes a ranking metric and interim goals.  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.  Requires annual reports to Legislature.  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.

STAND. COM. REP. NO. 2207

Honolulu, Hawaii

RE:     S.B. No. 2263

        S.D. 1

Honorable Ronald D. Kouchi

President of the Senate

Thirty-Third State Legislature

Regular Session of 2026

State of Hawaii

Sir:

     Your Committee on Economic Development and Tourism, to which was referred S.B. No. 2263 entitled:

"A BILL FOR AN ACT RELATING TO BUSINESS COMPETITIVENESS,"

begs leave to report as follows:

     The purpose and intent of this measure is to:

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

     (2)  Establish a ranking metric and interim goals;

     (3)  Require the Department of Business, Economic Development, and Tourism to establish a working group to develop and recommend policies that improve the State's business competitiveness;

     (4)  Require annual reports to the Legislature; and

     (5)  Appropriate funds.

     Your Committee received testimony in support of this measure from the Department of Business, Economic Development, and Tourism; Research and Economic Analysis Division of the Department of Business, Economic Development, and Tourism; Hawaii Food Industry Association; Hawaiʻi Farm Bureau; Chamber of Commerce Hawaii; Hawaii Transportation Association; Holomua Collaborative; Maui Chamber of Commerce; Mana Up; Title Guaranty of Hawaiʻi; and two individuals.

     Your Committee finds that the State ranks among the least competitive states for business in national assessments due to its high regulatory burdens, elevated costs, and infrastructure constraints.  Your Committee further finds that the Business Revitalization Task Force, established pursuant to Act 142, Session Laws of Hawaii 2024, found that the State's economic performance challenges are structural and require a sustained, measurable, and long-term policy framework to improve overall economic competitiveness, business climate, and governmental efficiency.  This measure transforms the Task Force's strategic direction into an operational accountability structure by establishing unified economic competitiveness improvement goals that provide for recurring progress evaluations.

     Your Committee has amended this measure by:

     (1)  Inserting a definition section that defines:

          (A)  "Department" as the Department of Business, Economic Development, and Tourism; and

          (B)  "Director" as the Director of Business, Economic Development, and Tourism;

     (2)  Inserting a blank appropriation amount;

     (3)  Inserting an effective date of July 1, 2050, to encourage further discussion; and

     (4)  Making technical, nonsubstantive amendments for the purposes of clarity and consistency.

     Your Committee notes that this measure, as amended, contains an appropriation for an unspecified amount.  Should your Committee on Ways and Means choose to deliberate on this measure, your Committee respectfully requests that it consider inserting an appropriation amount of $300,000 for the implementation of business climate and competitiveness improvement measures, including for independent research, staffing, travel, and other expenses for the purposes of this measure.

     As affirmed by the record of votes of the members of your Committee on Economic Development and Tourism that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 2263, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 2263, S.D. 1, and be referred to your Committee on Ways and Means.

Respectfully submitted on behalf of the members of the Committee on Economic Development and Tourism,