HB1614

SECTION 1. The legislature finds that the Hawaii technology development corporation, established in 1983, serves as the State's lead agency for supporting the growth and diversification of the technology, innovation, and manufacturing sectors in the State. Over the past four decades, the corporation 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 manufacturing and innovation ecosystem in the State through programs such as the Hawaiʻi small business innovation research program, the manufacturing assistance program and the accelerator program.

The legislature further finds that the corporation has played a critical role in positioning innovation and technology as key pillars of the State's economic development strategy. Through partnerships with federal agencies, universities, and local businesses, the corporation 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.

The legislature, however, additionally finds many federal grants require state matching funds, often ranging from one-to-one to one-to-five ratios between state and federal contributions. The existing 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. This misalignment reduces the State's competitiveness and risks forfeiting millions in potential federal dollars that could support the State's economic diversification goals.

The legislature further finds that consistent and predictable state support is essential for the corporation to continue fulfilling its mission as an economic driver. 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.

Furthermore, the legislature finds that the establishment of a revolving fund will ensure that the corporation has timely access to matching funds when applying for and administering eligible federal grants. The fund shall only be allocated if the corporation successfully secures a federal award that requires a state match, thereby safeguarding state resources while enhancing the State's ability to leverage federal investment.

Accordingly, the purpose of this Act is to provide a dedicated source of funds, through the establishment of a revolving fund, to be used and administered by the Hawaii technology development corporation to finance the State's matching contributions required by federal grants supporting innovation, technology, research, and manufacturing initiatives.

SECTION 2. Chapter 206M, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"§206M- Hawaii technology development corporation revolving fund. (a) There is established in the state treasury the Hawaii technology development corporation revolving fund to be administered by the development corporation.

(b) The following shall be deposited into the Hawaii technology development corporation revolving fund:

(1) Appropriations made by the legislature to the revolving fund;

(2) Transfers from other funds as authorized by law;

(3) Federal funds received by the corporation as part of grant awards;

(4) Repayments or reimbursements associated with prior grant activities; and

(5) Any interest earned on the revolving fund balance.

(1) To provide state matching funds for federal grants awarded to the development corporation that require a state contribution as a condition of the award;

(2) To cover administrative costs directly associated with the management of the grants or the revolving fund; and

(3) To support related activities approved by the board that are necessary to fulfill federal grant obligations.

(d) 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 federal grant contract or until the contract is otherwise terminated in accordance with federal and state law.

(e) The development corporation shall submit an annual report to the legislature no later than twenty days prior to the convening of each regular session, beginning with the regular session of 2027. The report shall include:

(1) The balance of the revolving fund;

(2) A list of federal grant applications and awards requiring matching funds;

(3) The amount of state moneys used as a match; and

(4) The outcomes and economic impact of each federally matched project."

SECTION 3. 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 established by this Act.

SECTION 4. There is appropriated out of the Hawaii technology development corporation revolving fund the sum of $10,000,000 or so much thereof as may be necessary for fiscal year 2026-2027 for the purposes of the Hawaii technology development corporation revolving fund.

The sum appropriated shall be expended by the Hawaii technology development corporation for the purposes of this Act.

SECTION 5. 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. Upon notice of a federal grant award to the Hawaii technology development 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.

If the Hawaii technology development corporation does not receive a qualifying federal award during the fiscal period, no allocation shall be made.

SECTION 6. New statutory material is underscored.

SECTION 7. This Act shall take effect on July 1, 2026.

INTRODUCED BY:	_____________________________

HOUSE OF REPRESENTATIVES	H.B. NO.	1614
THIRTY-THIRD LEGISLATURE, 2026
STATE OF HAWAII