STAND. COM. REP. NO. 3145

Honolulu, Hawaii

RE: H.B. No. 2583

H.D. 1

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 H.B. No. 2583, H.D. 1, entitled:

"A BILL FOR AN ACT RELATING TO ECONOMIC DEVELOPMENT,"

begs leave to report as follows:

The purpose and intent of this measure is to:

(1) Establish the Hawaii Micro-Lending Credit Enhancement Program within the Department of Business, Economic Development, and Tourism to expand micro-lending capacity by providing state‑funded loan loss reserves or other credit enhancement that absorbs first losses on qualified micro-loans made by participating lenders to Hawaii small businesses;

(2) Allow borrower fees and state matching contributions to capitalize lender-held loan loss reserve accounts;

(3) Establish the Hawaii Micro-Lending Credit Enhancement Special Fund;

(4) Require reports to the Legislature; and

(5) Appropriate funds.

Your Committee received testimony in support of this measure from the Chamber of Commerce Hawaii, Hawaiʻi Farm Bureau, Retail Merchants of Hawaii, Maui Chamber of Commerce, Hawaiʻi Island Chamber of Commerce, and one individual.

Your Committee received comments on this measure from the Business Development and Support Division of the Department of Business, Economic Development, and Tourism and Hawaii Bankers Association.

Your Committee finds that small businesses struggle to access affordable, appropriately sized, local lending sources, and their use of and repayments to out-of-state lenders reduce the local economic multiplier effect of loaned funds. Many states have successfully enacted state-backed micro-lending programs that share risk with lenders to increase capital lending activity within those states without providing direct lending subsidies to banks. This measure will mitigate capital leaving the State and stimulate growth and development for local businesses.

Your Committee has amended this measure by:

(1) Inserting an effective date of July 1, 3050, to encourage further discussion; and

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

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 H.B. No. 2583, H.D. 1, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 2583, H.D. 1, S.D. 1, and be referred to your Committees on Ways and Means and Commerce and Consumer Protection.

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

________________________________

LYNN DECOITE, Chair