Senate Standing Committee on Economic Development and Tourism

Aloha, and welcome to the hearing with the Senate Committee on Economic Development Tourism. Today is Thursday, March 19, 2026. This is our 1pm agenda, and we are in Conference Room 229. This hearing is being streamed live on YouTube. In the unlikely event that we must abruptly end this hearing due to technical difficulties, the committee will reconvene on Tuesday, March 24, 2026 at 1:05pm in Conference Room 229.

We have a one minute time limit for all testifiers as we have various agendas to get through this afternoon. This agenda has four bills. First bill up is HB 1939, HD 2, relating to taxation. First up on the testifiers list, we have Will Kane from Office of the Governor. Thank you. Next up, Georja Skinner from Creative Industries.

Yes. Hi, Chair, Vice Chair, Members of the Committee, whoever it may be. Thank you very much for this opportunity. We have comments on this measure and are here to answer questions.

Thank you. Next up, Department of Taxation.

Good afternoon, Chair, Vice Chair, Committee Members. Garrison Kurth, Department of Taxation. We stand on our written testimony providing comments. I'm here for questions.

Thank you. Next up, Michael Dunford testifying for Department of Attorney General with comments. Walea Constantinau, Honolulu Film Office.

Aloha, Chair and Members. I stand on my written testimony. I wanted to underscore that there's some language in there, preferred language with regard to the per production cap. I took it from SB 2580, which allows for the production spending $60 million or more to be exempt from the per production cap. And we trust that this bill adopt that language, or we take that that bill tomorrow, I think. Productions that are under a million dollars, it's hard for them to to have the third party audit. So consider exempting the third party audit for production under a million dollars.

Thank you. Next up, Dale VanderBrink on behalf of Ala Moana-Kakaʻako Neighborhood Board Number 11.

Yes. My name is Dale VanderBrink, Second Vice Chair, Ala Moana Kaka'ako Neighborhood Board to provide testimony on behalf on the neighborhood board in strong support of...

Sir, can you come up here and talk for a second? If you can stand on your, if you can stand on your testimony, that's fine. But if you get something to say, you get one minute. Thank you.

No. Thank you. Everyone is standing up. So, yeah. So our neighborhood itself, it's it's very much dependent on tourism. We need a more diversified economy, and this bill is definitely a way to go about doing so. I very much believe this is the avenue to do so by providing specific criteria for local hires, for indigenous content, and for investments in our local film industry. I believe that this is the way to go about doing so. Just to reiterate, Dale VanderBrink here on behalf of the Ala Moana-Kakaʻako Neighborhood Board, and we strongly support this bill. Thank you.

Thank you. And next up, Irish Barber, Hawaii Film Alliance on Zoom.

Aloha, Chair, Vice Chair, and Members of the Committee. Irish Barber, President of the Hawaii Film Alliance. We love the local hire language and we stand on our other written amendments in our testimony. Mahalo.

Thank you, Irish. Next up, Tom Yamachika for Tax Foundation of Hawaii on Zoom.

Thank you, Chair, Vice Chair, Members of the Committee. Tom Yamachika from Tax Foundation. We'd like to stand on our written testimony providing comments, and we'll be available for questions.

Thank you. Next up, Pikachu. Shelby Pikachu Billionaire.

You're waiting for this, Chair. All right. Pikachu Shelby Billionaire here on the record representing Kingdom of the Hawaiian Islands and Ohana Unity Party. I got 59 seconds to say that I do support this bill. Thank you, Chair. Because we did help. I we have people on Zoom watching right now. I know Enty and Aurelius. We have beautiful pictures. You guys seen our Hawaiian stuff.

But we're independent producers. We don't make multimillion dollar productions. I'm not sure if the public knows what Jason Momoa's productions, Brian Keaulana's, all this stuff. I support the local work, all the union, whatever they need because on state wages, they have to pay them, you know, the hourly wage. Like a videographer, 25 to 45 minimum if we're going through contracts. There's some of the problems are so bad, they won't pay me to film everything that I do on social media.

But if you paid me, the budget does come to a qualification. $100,000 minimum production to go for these things. Okay. I'll charge you a $100,000 plus taxes. Are we going up to 60 million? Are we doing a 100 mil? Are we doing the full production here on the scales? So I do agree what they're saying.

We do should add some amendments. But I also do a shout out for the film industry because Paakea Road is being flooded with doo doo water, Power House Church. The film industry came. They sent the trucks and helped pump the water. It's still with doo doo water. We still need your help. So thanks very much. That's my testimony. Boom.

Thank you, Pikachu. Next, Claudia Kühn. Oh, okay. No Claudia Kühn. Okay. We have 52 people in support, zero in opposition, five with comments. Anyone else waiting to say something?

Aloha, Chair. Thank you for seeing this bill today. My name is John Salanoa, and I am an actor, director, and producer. As far as 1939 goes, absolutely in love with the local hire language there. I think if we were able to migrate some of this language over to SB 2580 we would have as close to a perfect bill as we can look for.

We are aware of other jurisdictions and what they put out this year in regards to their tax incentives. And the tax incentives throughout the US and the world are hovered anywhere from 30 to 40 base points. So we would like to see if we can align ourselves so that when it comes time for preproduction and for development, that they will always have Hawaii at the top of their mind to come and film here. But right now, where we sit, we have 22. And if we lift it to 27 base points, we will most likely be left out of a lot of those conversations. Thank you.

Thank you. John, you have a testimony you submitted?

I do.

Thank you. Anybody else wishing to testify on the measure? Seeing none. Members, any questions? Senator Kim.

So I'm reading the bill and there's a lot of moving parts. Right? And so I guess the question becomes, one, how is DBEDT going to be able to administer this measure with all of these moving parts?

Thank you, Senator Kim, for the question. Georja Skinner, Creative Industries. There is a concern, that's why we offer comments. Because first of all, in the section on page two, starting with line three, number two, the additional 5%, which we feel there are a lot of positive things in the statement. However, when you get to item B, C, and number three, then this is all operationally challenging. Let me take them by section.

So the 80% local hire, of course, is possible and we all understand why we want that. Very important. We do need, again, the AG concurrence on this and so that's going to be an important thing to have. We understand there is a Commerce Clause issue. However, we know that many people have gone forward to talk to the AG about it.

So if there is a way to address that, great. We also don't want it to kill a bill that passes this year. Second, it's the carry forward of 82%, 85 in all of these additional years. Currently, the way the statute is written is it's only carried over two years, automatic split over two years. In the off chance that there's an issue, like during the strikes, for example, then there were two productions that were outside of that but three is the maximum.

Once you start changing that core element of the credit itself, you're talking about promulgating rules in addition to the statute change, which can delay this another eighteen months or so. So my recommendation would be great ideas, but some of these perhaps to take up again in the biennial conversation and then look at some of the other ways to do stackable.

I don't think that we're in disagreement with a stackable. It's just this particular section is cause for concern operationally. And I think what we're all trying to do here, Senate and House and Governor and our department, is to get something short term that we can pass this year that can bring the industry back and bring the jobs back.

The others I think are not as controversial in the section of line 15, number three. The additional 5% for qualify for above the line is great provided we have the workforce to do it. So I think we really need to do a deep dive on that with the Directors Guild, Producers Guild, and Writers Guild. How deep is our bench in those areas?

The additional 3% of qualified production, and again, these are options. You can only pick one, but you're stacking it on top of either 27 or 30, as HFA mentioned. And we just have to be cautious of that in balancing the fiscal impacts. So I am concerned about the operational aspects as you asked.

I do think that, as Mr. Salanoa mentioned, item D on page three, line eight, The additional 2 or 3%, of qualified production costs for productions that also do post production is a great way to answer the question proposed in 1941. I think that that is a way to incentivize but also not take away and damage the production industry in general.

Yeah. I see that administering this and then keeping track years later as the tax comes in to remember what option is what and percentage is what.

And remember, when we're getting those reports, Senator, we're getting them a year or we're getting them three months after the year that they are filing. So that would mean that the final decision isn't made on those things. It can't be made up front. And if we're looking to incentivize in a higher incentive base rate, then go with, you know, what the recommendations are in the Senate measure and add in things that might be conducive to everyone in this session.

And then you mentioned the fiscal impact. What is fiscal impact?

So for example, if we have the base rate of 27% and we add 5% for the qualified workforce, then that's 32%. Well, that is competitive, right? But then you also have to aggregate and look at what's happening with the neighbor islands. And so you're gonna be increasing in that in essence in a way that I think we have to be able to deliver what the impacts are. So we are working on that and would like to deliver that to the both committees so they're aware.

And then so the impacts would have to be calculated on each of the different options, is that correct?

That is correct. And we are working on that now. I'm sorry I don't have it for you today.

How will DBEDT evaluate and verify indigenous content?

This is a very important question. Definitions are not presented in this measure regarding indigenous content. I think that an indigenous panel or advisory group that would be would be entitled to... It's not something that, let's say, DBEDT has the ability to manage unless there was an advisory group identified as an indigenous council, for example, that would be doing that. What I would say is that it's specific to content. So if you have...

So you're saying we need to define?

Absolutely. It's not defined in the measure. And I would look to indigenous personnel to do that. And we can certainly do that and reach out to industry groups or rather Native Hawaiian groups that work with DBEDT currently, and those are quasi agencies. But again, how do you determine it is very interesting. You can do it by the number of pages that are in the script. You can do it by the content or language created. It is done in other jurisdictions. I think it's just looking at how we would operationalize it.

Two more questions. In that same vein, what criteria will you use or should be using to determine which production receives the annual cap waiver?

This is a problem area in the measure because how would we decide? And again, you don't know. Based on this spend, which is why that's recommended, I think there's a baseline in the Senate measure related to film tax credits that has a better language than this. We have, you know, discussed this with our introducer in the House.

And frankly, you know, I know it's up to us as DBEDT to figure that out, so I'll tell you that it is problematic. Larger productions that should be perhaps considered, you can't do that until, again, the end of the production and when we receive the final reports. So I don't know that many studios would go for that.

And we would also find ourselves in a very precarious position if we were able to grant that. And then what if a production comes in later? For example, you have a large production that's going to be that is a series that came in in December last year. So for that taxable year, even though there may not be spending more than a couple million dollars, but we want series production here, would we waive them the credit for just that one? Yet we have a major studio film all about Hawaii coming in behind that, which one do we pick?

Okay. Finally, on the local hires, which I am 100% in support. However, at what point do you determine 80%? Is it start of the film, at the end of the film, in the middle of the film?

So there is an estimated number in the beginning, and we can require that and do it on the front end, which would just mean changing forms in our online system. I don't think that's that complicated. However, you don't know that they actually hit that number and the employment happened until they file the report in March, by the March the following year.

Plus, extras and and walk ons count as well? So production can put a whole bunch of extras on for one day, and then it would be considered the 80%.

But I think what's important then, and I agree with you on that, it is it is something that has been done. But we also don't want to negate that because they're all members of a labor union here, entertainment labor union. So I think what's critical is defining it and also changing the way that we track it. So at the front end, the tracking would reflect that. So you can't load it that way. Just it's on us to make sure that that doesn't happen.

Again, you know, implementation is one thing. Enforcement is another thing. Right? And so what do you do at the end of the end end of the production? You say, no, you didn't reach it. And they say, yes, we did reach it. And you had an impasse and...

That's the challenge is that any studio or any major production over a few million dollars, how would they, as a studio, risk it and then not know until like August the following year? That is the one area which I can't quite wrap my head around with the exemption for just one project.

And then it's like you got 80% in the first taxable year and second consecutive, 82%, 85%, and it keeps changing. You know, it's a nightmare. Just read the bill.

Yeah. It's it's it will be a definite challenge for us. We need to add more positions. You know, this is a tough fiscal time for the state. So I don't know that that would be that helpful. However, you know, I do support the idea of the 80% and I think I speak on behalf of...

Why can't we just keep it 80% all the way? Wait, why do I have to go... I know you didn't write the bill. Did you write the bill?

Not that I recall. Thank you. No, I agree. I agree with the 80% and the baselines of increasing the credit from where it is now both for Oahu and neighbor islands is very important. All of that's articulated well in 2580. And I think integrating some of these ideas in here that are streamlined that can get us ahead and do this as soon as possible with passage of a measure this year and then retake this up again with some of these additional ideas when we can look at that in the biennium year.

Thank you. Thank you, Chair.

Senator Fevella.

You know, I hear what you're saying. And, like like, I told a lot of people in the community that, you know, I support somewhat of the bill. But we had other bills that come through that was really taken aback when people conspired to kill the bill. So we're here where we're here. And what I'm hearing now is that we're not gonna know about the 80% or to the back end, to the front end, whichever end.

But, again, if you get the majority of the labor unions involved on the commission at the table from the beginning, you can kinda know who's leaving the hall on the percentage to go into the filming. And the reason why I say this is because, again, Temptation Island, again, was given the tax credit even though they never meet the minimum qualifications to get the credit. And the credit was still given to them in the beginning part of what I had brought up before. So, again, this is our taxpayers' money. We want our people to work.

We wanna prioritize our people to work. And again, Hawaii is a destination in itself. And if we cannot attract them with what we stipulate, like how every other place do, New Zealand, other places. Then people can say, oh, but New Zealand is one country. Well, we still consider to be a country under the United States.

So we should dictate how our tax credit is gonna be made. And if it is difficult, then we gotta find our own way to get it done. Period. You know? So I really appreciate, like I said, Chair, thank you for the opportunity who was speaking. But, again, all bills that would have been presented, it has it's a work in progress. We need to go forward and prioritize our local workforce. Thank you.

And thank you for the comment, Senator Fevella. I think also mentioning that the commission bill itself does have elements in it that can be beneficial to some of these discussion items.

Okay. Any other questions? Georja, so do you know what the percentage of local hires on average that we see in our local productions now?

Just the local productions or the offshore?

Just local hires on average local productions.

Oh, yeah. On local productions, it's very high, 90 to 100%.

And what is the what criteria would you see if you are allowed to waive the credit cap for qualified production for one qualified production per fiscal year?

Well, again, it depends. A lot of the larger productions that have maybe, well, most of the offshore productions are anywhere from 80 to 85%. In some cases, with Rescue: HI-Surf, you had a higher rate with because it was mostly on location and a lot of, like, a 100% water team, including above the line people on that team, as well as the below the line people. So that is a great example of how it should be done. Right? And 80-90% for offshore productions, and I would say 90% to 100% on any local productions that can range anywhere from 100,000 to maybe 3 million.

Next up, HB 1941 HD one relating to taxation. Georgia, you are first. Thank

you very much, Georgia Skinner Creative Industries. I do appreciate the intent of the measure and to grow our industry in terms of post production. I do feel that the language in 1939 is more appropriate and might be something to consider to add to, that measure. And this one in particular will cut, as we said in our testimony, on average, we have 7070% of productions that come that are production only. And not all studios are going to invest in a postproduction facility yet.

Right? We have to grow the ecosystem along with this. So, what I'm suggesting is that it is problematic because, unintentionally, what has happened in the language of the bill is that it unfortunately is, cutting off the production industry to save the post production industry, which is very small, 11% at this point in time.

Thank you. Thank you.

Thank you. Next up, Department of Taxation.

Good afternoon, again. Darris and Kirk, Department of Taxation. We'll stand on our, testimony, Brian Collins, and I'm here for questions.

Thank you. Wilia Constantine for Honolulu Field Office.

Aloha, Chair, members of the committee. Valleya Constantino, Honolulu Film Office. I echo, DBEDT's concerns about 1941. It ties together the physical production and the post production in a way that would not allow us to grow the industry right now. Perhaps one way to think about post production and to solve some of the concerns and perhaps the genesis of this measure is to tie a workforce development component to it as opposed to physically connect physical production with post production because each show is different.

They're going to have different needs. Sometimes we do commercials where they're here for one or two days and then they shoot other locations for a couple of days and there's no post production in it, but that commercial could spend $500,000 and we want that kind of business. So we don't wanna limit ourselves when you physically tie a percentage of physical production and a percentage of postproduction together, which is what the language in this bill does. What we really wanna do is keep them separate and look for a way to justify the ROI on the postproduction part. Thank you very much for the opportunity to testify.

Thank you. Next up, shall we Pikachushu Billing.

Aloha, Pikachu. Shelby will be in our back for King of Hawaiians and Ohanian Party. So as a producer on O'Levelo TV, over 1,600 TV episodes. And you're gonna see about Illuminati Anunnaki called the Galactic Federation of Worlds, about the Draco, Shikhar Empire, Liran versus Orion. However, However, we're talking about film industry with this bill.

I'm supporting it because we're talking about postproduction. That's all edited by me. Normally, if I stick the steak DAGS wages, I have to pay everyone for postproduction, preproduction and stuff. So we're filming a long form. You guys see on my social media.

I film all the whole way because I don't I hate editing. You have to pay me hourly if you couldn't touch me to edit. So they're not gonna do this. So when we're doing postproduction, I'm gonna do it there, but that's just me solo. When we're doing filming a whole movie, you're not doing all at once.

You're doing several scenes. Scene 47, scene 52, so they can't do it all at once. We're gonna fill we're gonna cut and edit on Final Cut Pro or Adobe Premiere. They're using after effects. It's not that hard.

It's not rocket science. I use the same thing we're producing on a level TV. What's being aired on too, they don't edit, but it does cost money, does cost time, especially in the special effects, copyright and intellectual property. We need that for Hawaii. I know Senator Fevella knows what I mean. When Disney comes in, the Hobbit, we need a percentage to come back to home to our people. Thank you. Thank you.

Sorry. Next up. Sorry. Tax Foundation of Hawaii, Tom Yamachika on Zoom.

Thank you, chair, vice chair, members of the committee, Tom Yamachika from Tax Foundation. We'll stand on written comments and be available for questions.

Thank you. Next up, Irish Barber, Hawaii Film Alliance, also on Zoom.

Aloha. Mahalo, chair, vice chair, members of the committee. Filming—we're in strong opposition to this bill. Filming and postproduction in Hawaii are very rarely done. 80% of the films that come here do their postproduction elsewhere.

So, this will deter those—80% of those films from coming here. Like accounting, postproduction is one of the few crafts we can do remotely. We have local postproduction facility—facilities—that are small and currently being contracted by major films to do their editing. So, their clients, if this bill moves forward, will not be able to access the credit and may hire another postproduction company outside of Hawaii. We want postproduction, but we need proper infrastructure, and this will allow our local film editors to work in Hawaii and stay in Hawaii.

We support the language in HB 1939. Mahalo.

Thank you. Next up, Gennaro Hale Goldarama. We have another 20 people in support, one with comments. Anybody else wishing to testify on this measure? Seeing none. Members, any questions? DBEDT. So, Georja, could the requirements in this bill be disincentive for certain productions to film in Hawaii because their timelines may exceed the year in which they qualify for the tax credits?

Well, that's one aspect. Yes. Very, very true.

Okay. Thank you.

Next up, any other questions? I see none. Okay. Next up, HB 1946. Laurie Bette Canford testifying for DCCA Timeshare Program. Okay, thank you. Next up, Robin Suarez, Senior Vice President for Merit Vacations Worldwide. Thank you. Mike...for Hilton Grand Vacations. In support. Blake Oshiro, American Resort Development Association.

ARDA stands in strong support, and we don't object...the language...

Thank you. Next up, Darolis Vega Fernandez, in support. Stephanie Denoho, Quala Coast Resort Association, also in support. And Stacy He, also in support. Anybody else wishing to testify on this measure? Seeing none. Members, any questions? DCCA. So, do you have any concerns with the current draft of the bill, or have they all been addressed?

They've all been addressed. We've been working together with ARDA.

Okay. Sounds good. Thank you.

Thank you.

Next up, HB2545. First up, Trung Lam for h Hawaii Technology Development Corporation. Thank you. Next up, Laura Moore with Military and Community Relations, Office of DBEDD in support. Keith Hayashi, superintendent, department of education in support, chairman Lord testifying left of the chamber. Thank you. Lauren Zirbel, Hawaii Food Industry Association on Zoom.

Not available on Zoom chair.

Thank you. There's six other individuals also in support of the measure. Anybody else wishing to testify on this measure? Seeing none members. Any questions?

Okay. Just a quick one.

Senator Kim.

Who should be asking this? I guess, Hawaii Technology Development. What's the anticipated amount or amount of funding that will be needed annually to meet anticipated demand for the matching program?

I mean, normally, we're oversubscribed. I think the asking can go up. If you do 50% of all the STER awards that apply, it would probably be about close to $5,000,000.

5,000,000? That would be our match.

Yeah. Because some of the awards can be pretty large. Right. So

and that would be annually?

It goes up and down depending on which companies, I mean, I know the concerns. This bill doesn't really give us some latitude on selecting, unless it was underfunded. If they hit certain criteria, we automatically award them. I don't

know if there were concerns on repeat winners. I mean, if it if we have the total amount and give our total ask, it would I know we wouldn't be able to be selective on which projects to go.

And this would be general fund monies?

Normally, it is general.

And reoccurring 5,000,000 in a year.

If yeah. That's the wishful that I'd say to to give out all available.

Thank you.

Any other questions? Seeing none. Take a short recess.

Okay. We are back for decision-making for the Committee on Economic Development and Tourism. First bill, HB 1939. You know, there are a lot of changes that I think we're gonna have to look at. But I want to make sure that we keep the, the bill moving and try and address this in the next committee. So, if I move the bill, I'll pass it with an SD 1 by amending the effective date to 07/01/3050, and by incorporating the amendments from DOTAX as follows, that the effective date of the bill be amended to apply to costs incurred rather than taxable years beginning after 12/31/2025. Members, any discussion? Seeing none. Vice chair for the vote, chair goes aye.

[Roll Call]

Next up, HB1941 HD1, relating to Taxation.

After listening to some of the testimony, I believe we have other vehicles that we're gonna try to look at to address this. The bill is a little messy, and I wanna try and work on it so that we get something good going across the table.

So I will defer HB 1941. Thank you.

Next up, HB1946 HD2, relating to Registration of Timeshares.

We're going to be passing with an SD1 by incorporating the amendment offered by DCCA as follows. The department requests the following language be inserted at the end of line 17. Applications for renewal required by this section shall be deemed approved 30 days after receipt of all documents required under Subsection F and Section 16-106-4.2.

Hawaii administrative rules unless the Director issues a deficiency letter detailing the specific deficiencies of the filing before the end of the 30th day and making necessary technical and non substantive amendments.

Members, any discussion?

Seeing none. Vice Chair Wakai for the vote, Chair goes aye.

[roll call]

[roll call]

Thank you.

And the last bill, HB 2545, relating to the Hawaii Technology Development Corporation.

We're gonna pass it in SD1 by making the following technical change. Since the measure uses Federal Small Business Innovation Research and Small Business Technology Transfer Award throughout.

These are separate awards and therefore should be changed to Federal Small Business Innovation Research or Small Business Technology Transfer Award and making any necessary additional technical non substantive amendments.

Members, any discussion?

Seeing none, Vice chair Wakai for the vote, Chair votes aye.

[roll call]

Chair, your recommendation is adapted.

Thank you, members and thank you everyone for being here today.

This meeting is adjourned.