Informing the Legislature that on June 8, 2026, the Governor signed the following bill into law: HB2547 HD1 SD1 CD1 (ACT 115).

2026 Regular Session

Hawaii may invest excess state funds in short-term, investment-grade corporate bonds to boost earnings while restricting maturities to five years and maintaining safeguards.

Received.

#act115

Summary of GM 1215 (HB 2547, CD1) – Hawaii, 2026

Purpose and intent

The bill authorizes the State Director of Finance to expand the range of investment options for state funds by allowing investment in short-term investment-grade corporate bonds.

The underlying goal is to increase investment earnings on idle state moneys, thereby generating more resources for state programs and debt reduction.

Key provisions and changes

Section 2 (amendment to §36-21, Hawaii Revised Statutes):

The Director of Finance may invest moneys determined to be in excess of immediate needs in:
Short-term investment-grade corporate bonds with a minimum rating of AA- or its equivalent.
Other pre-approved investments already authorized under existing statute, including U.S. government securities, federal agency notes and bonds, federally insured deposit products, money market funds, repurchase agreements, commercial paper with high ratings, banker’s acceptances, etc.
For investments with stated maturity dates: both the investment and underlying securities must mature within five years from the date of investment.
Income from these investments generally goes to the General Fund, with specific rules for other funds:
Income earned from monies invested by the General Funds, Special Funds, Bond Funds, and Trust/Agency Funds on an investment pool basis is credited to the respective funds in proportion to their contribution to the pool.
Definition provided: “investment pool” refers to the aggregate of state treasury moneys in the custody of the Director of Finance for investment and reinvestment, regardless of fund designation.

Section 3: Technical/structural updates to statutory text (repeal/replace format as needed).

Section 4: Effective date aligned with enactment (takes effect upon approval).

Who/what is affected

State government and taxpayers:

The Director of Finance gains authority to diversify investments beyond the current list, potentially enhancing state investment returns.
Funds in excess of immediate needs that are managed by the State Treasury could be invested in the newly authorized short-term corporate bonds, subject to risk and rating criteria.

State programs and obligations:

Potentially higher earnings could improve funding for programs or reduce outstanding obligations, depending on market performance and investment results.

Procedural and timeline notes

The bill was approved and signed into law as Act 115 on June 8, 2026.

It amends Section 36-21, with an immediate effective date upon approval (no separate future effective date stated).

The document includes formal confirmation from the Governor and certification from both legislative chambers.

Potential impact considerations

Benefits:

Increased investment income from higher-yield but relatively low-risk instruments (short-term AA-/equivalent rated corporate bonds).
More resources available for state programs and debt reduction.

Risks:

Credit, market, and liquidity risk associated with corporate bonds, even if investment-grade and short-term.
Dependence on market conditions could affect earnings variability.

Overall, the measure broadens Hawaii’s investment toolkit to pursue higher earnings on excess treasury funds while maintaining safeguards such as credit ratings and maturity limits.