HB 2568: Vertical Filming; Motion Picture, Digital Media, and Film Production Income Tax Credit; Hawaii Film and Creative Industries Development Special Fund; Fees; Hawaii Film Studio

A BILL FOR AN ACT

RELATING TO THE FILM INDUSTRY.

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

     SECTION 1.  The legislature finds that the practice of vertical filming, which refers to films and videos shot in a vertical orientation, has grown in popularity in recent years.  The legislature further finds that capitalizing on the growing popularity of vertical filming could help ensure that Hawaii's film industry remains competitive and at the forefront of emerging trends.  The legislature recognizes that there is a need to increase funding available to support the film industry, particularly through the Hawaii film and creative industries development special fund.  The legislature also finds that the Hawaii film and creative industries development special fund receives funding through a fee collected from taxpayers claiming the motion picture, digital media, and film production income tax credit.  Increasing this fee amount would create additional funding, which could be used to support vertical filming in the State by supporting set building, grant distribution, training, workforce development, equipment access, and networking opportunities.

     Accordingly, the purpose of this Act is to:

     (1)  Increase the fee collected from taxpayers claiming the motion picture, digital media, and film production income tax credit and require a portion of funds collected to be used to support the vertical film industry in the State; and

     (2)  Expand the funding sources of the Hawaii film and creative industries development special fund to include revenues received by the department of business, economic development, and tourism from managing the Hawaii film studio.

     SECTION 2.  Section 201-113, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

     "(a)  There is established in the state treasury the Hawaii film and creative industries development special fund into which shall be deposited:

     (1)  Appropriations by the legislature;

     (2)  Donations and contributions made by private individuals or organizations for deposit into the fund;

     (3)  Grants provided by governmental agencies or any other source;

     (4)  Effective January 2, 2023, all revenues, fees, and charges from the processing of the motion picture, digital media, and film production income tax credit pursuant to section 235-17; provided that eighty per cent of the funds collected pursuant to section 235‑17(k) shall be expended to support the vertical film industry in the State; and

     (5)  [Effective July 1, 2022, all existing and future] All revenues, fees, and income received by the department from its management of public facilities that support media and entertainment workforce and business development, [with the exception of] including the Hawaii film studio.

     For the purposes of this subsection, "vertical film" means video content shot and presented in a portrait orientation with an image that is taller than it is wide, typically intended to be viewed on a smartphone screen."

     SECTION 3.  Section 235-17, Hawaii Revised Statutes, is amended by amending subsection (k) to read as follows:

     "(k)  Each taxpayer claiming a tax credit under this section shall submit to the department of business, economic development, and tourism a fee for the motion picture, digital media, and film production income tax credit in an amount equal to [0.2] one per cent of the tax credit claimed by the qualified production no later than the deadline stated in subsection (c).  The department of business, economic development, and tourism may prescribe the form and method by which this fee is remitted, including through electronic means.  The fees collected under this subsection shall be deposited into the Hawaii film and creative industries development special fund under section 201-113."

     SECTION 4.  Statutory material to be repealed is bracketed and stricken.  New statutory material is underscored.

     SECTION 5.  This Act shall take effect on July 1, 3000, and shall apply to taxable years beginning after December 31, 2026; provided that on January 1, 2033:

     (1)  Section 2 of this Act shall be repealed and section 201‑113, Hawaii Revised Statutes, shall be reenacted in the form in which it read on the day prior to the effective date of this Act; and

     (2)  Section 3 of this Act shall be repealed to coincide with the repeal date of Act 88, Session Laws of Hawaii 2006, as amended by Act 89, Session Laws of Hawaii 2013, as amended by Act 143, Session Laws of Hawaii 2017, as amended by Act 217, Session Laws of Hawaii 2022, and section 235‑17, Hawaii Revised Statutes, shall be reenacted in the form in which it read on the day before the effective date of Act 88, Session Laws of Hawaii 2006.

Report Title:

Vertical Filming; Motion Picture, Digital Media, and Film Production Income Tax Credit; Hawaii Film and Creative Industries Development Special Fund; Fees; Hawaii Film Studio

Description:

Increases the fee amount collected from taxpayers claiming the Motion Picture, Digital Media, and Film Production Income Tax Credit and requires a portion of funds collected to be used to support the vertical film industry in the State.  Expands the funding sources of the Hawaii Film and Creative Industries Development Special Fund to include revenues received by the Department of Business, Economic Development, and Tourism from managing the Hawaii Film Studio.  Applies to taxable years beginning after 12/31/2026.  Repeals 1/1/2033.  Effective 7/1/3000.  (HD1)

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 the film industry.

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

     SECTION 1.  The legislature finds that the practice of vertical filming, which refers to films and videos shot in a vertical orientation, has grown in popularity in recent years.  The legislature further finds that capitalizing on the growing popularity of vertical filming could help ensure that Hawaii's film industry remains competitive and at the forefront of emerging trends.  The legislature recognizes that there is a need to increase funding available to support the film industry, particularly through the Hawaii film and creative industries development special fund.  The legislature also finds that the Hawaii film and creative industries development special fund receives funding through a fee collected from taxpayers claiming the motion picture, digital media, and film production income tax credit.  Increasing this fee amount would create additional funding, which could be used to support vertical filming in the State by supporting set building, grant distribution, training, workforce development, equipment access, and networking opportunities.

     Accordingly, the purpose of this Act is to increase the fee collected from taxpayers claiming the motion picture, digital media, and film production income tax credit and require a portion of funds collected from the fee to be used to support the vertical film industry in the State.

     SECTION 2.  Section 201-113, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

     "(a)  There is established in the state treasury the Hawaii film and creative industries development special fund into which shall be deposited:

     (1)  Appropriations by the legislature;

     (2)  Donations and contributions made by private individuals or organizations for deposit into the fund;

     (3)  Grants provided by governmental agencies or any other source;

     (4)  Effective January 2, 2023, all revenues, fees, and charges from the processing of the motion picture, digital media, and film production income tax credit pursuant to section 235-17; provided that eighty per cent of the funds collected pursuant to section 235‑17(k) shall be expended to support the vertical film industry in the State; and

     (5)  Effective July 1, 2022, all existing and future revenues, fees, and income received by the department from its management of public facilities that support media and entertainment workforce and business development, with the exception of the Hawaii film studio.

     For the purposes of this subsection, "vertical film" means video content shot and presented in a portrait orientation with an image that is taller than it is wide, typically intended to be viewed on a smartphone screen."

     SECTION 3.  Section 235-17, Hawaii Revised Statutes, is amended by amending subsection (k) to read as follows:

     "(k)  Each taxpayer claiming a tax credit under this section shall submit to the department of business, economic development, and tourism a fee for the motion picture, digital media, and film production income tax credit in an amount equal to [0.2] one per cent of the tax credit claimed by the qualified production no later than the deadline stated in subsection (c).  The department of business, economic development, and tourism may prescribe the form and method by which this fee is remitted, including through electronic means.  The fees collected under this subsection shall be deposited into the Hawaii film and creative industries development special fund under section 201-113."

     SECTION 4.  Statutory material to be repealed is bracketed and stricken.  New statutory material is underscored.

     SECTION 5.  This Act, upon its approval, shall apply to taxable years beginning after December 31, 2026; provided that on January 1, 2033:

     (1)  Section 2 of this Act shall be repealed and section 201‑113, Hawaii Revised Statutes, shall be reenacted in the form in which it read on the day prior to the effective date of this Act; and

     (2)  Section 3 of this Act shall be repealed to coincide with the repeal date of Act 88, Session Laws of Hawaii 2006, as amended by Act 89, Session Laws of Hawaii 2013, as amended by Act 143, Session Laws of Hawaii 2017, as amended by Act 217, Session Laws of Hawaii 2022, and section 235‑17, Hawaii Revised Statutes, shall be reenacted in the form in which it read on the day before the effective date of Act 88, Session Laws of Hawaii 2006.

Report Title:

Vertical Filming; Motion Picture, Digital Media, and Film Production Income Tax Credit; Hawaii Film and Creative Industries Development Special Fund; Fees

Description:

Increases the fee amount collected from taxpayers claiming the Motion Picture, Digital Media, and Film Production Income Tax Credit and requires a portion of funds collected from the fee to be used to support the vertical film industry in the State.

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.  512-26

Honolulu, Hawaii

                , 2026

RE:   H.B. No. 2568

      H.D. 1

Honorable Nadine K. Nakamura

Speaker, House of Representatives

Thirty-Third State Legislature

Regular Session of 2026

State of Hawaii

Madame:

     Your Committee on Economic Development & Technology, to which was referred H.B. No. 2568 entitled:

"A BILL FOR AN ACT RELATING TO THE FILM INDUSTRY,"

begs leave to report as follows:

     The purpose of this measure is to increase the fee amount collected from taxpayers claiming the Motion Picture, Digital Media, and Film Production Income Tax Credit and require a portion of funds collected to be used to support the vertical film industry in the State.

     Your Committee received testimony in support of this measure from IATSE 665; CARES; and two individuals.  Your Committee received testimony in opposition to this measure from one individual.  Your Committee received comments on this measure from the Department of Business, Economic Development, and Tourism and Tax Foundation of Hawaii.

     Your Committee finds that vertical filming, which refers to films and videos shot in vertical orientation, has grown in popularity in recent years and represents an opportunity for economic growth in Hawaii's film and creative industries.  Your Committee further finds that the Hawaii Film and Creative Industries Development Special Fund is a key source of financial support for local film productions and receives funding through a fee collected from taxpayers claiming the Motion Picture, Digital Media, and Film Production Income Tax Credit.  This measure seeks to increase this fee and create a funding source to support vertical filming in the State.

     Your Committee notes that expanding the funding sources of the Hawaii Film and Creative Industries Development Special Fund would complement this measure.

     Accordingly, your Committee has amended this measure by:

     (1)  Adding a provision that expands funding sources of the Hawaii Film and Creative Industries Development Special Fund to include revenues received through the management of the Hawaii Film Studio;

     (2)  Changing the effective date to July 1, 3000, to encourage further discussion; and

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

     As affirmed by the record of votes of the members of your Committee on Economic Development & Technology that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 2568, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 2568, H.D. 1, and be referred to your Committee on Finance.

Respectfully submitted on behalf of the members of the Committee on Economic Development & Technology,