Bill > SB54

This bill establishes the Interstate Compact to Phase Out Corporate Welfare, a collaborative agreement among states to eliminate targeted economic development subsidies that primarily benefit large corporations. The compact defines "corporate welfare" as company-specific grants, tax incentives, or fund disbursements that provide special financial advantages to particular businesses. Key provisions include prohibiting member states from offering company-specific subsidies or grants to businesses with facilities in other member states, creating a national board to draft recommendations for phasing out corporate welfare, and establishing an enforcement mechanism that allows taxpaying residents to require their state's chief law enforcement officer to enforce the compact's provisions. The bill recognizes that current economic development practices create a "prisoner's dilemma" where governments compete to attract businesses through increasingly generous subsidies, which ultimately disadvantages smaller businesses and wastes taxpayer resources. Importantly, the compact excludes workforce development grants from its restrictions and is not retroactive to existing agreements. Any state can join the compact by enacting it and can withdraw with six months' notice, and the compact includes a severability clause to ensure that if any part is found invalid, the remainder remains in effect. The compact aims to gradually build a national consensus for more equitable economic development policies that create a level playing field for all businesses.

Government Affairs

https://www.capitol.hawaii.gov/session/measure_indiv.aspx?billtype=SB&billnumber=54&year=2026