Committee advances HB1939 after debate over local-hire verification, cap waivers and indigenous-content rules

The Senate Committee on Economic Development and Tourism advanced HB1939 (HD2) on Thursday after extended testimony from industry groups, neighborhood leaders and state agencies about how the bill would be administered and enforced.

Georgia Skinner, representing Creative Industries, told lawmakers the measure contains many “moving parts” that raise operational concerns, including stackable bonus credits, carry-forward rules and the lack of a definition for indigenous content. “We do need, again, the AG concurrence on this and so that's going to be an important thing to have,” Skinner said, noting Commerce Clause issues and warning that some elements could require rulemaking and an 18-month delay.

Supporters in the film community urged stronger local-hire language. Dale Vanderbrink, second vice chair of the Ala Wanakaka'ako Neighborhood Board No. 11, said the neighborhood depends on tourism and “this bill is definitely a way to go about doing so” by requiring local hires and investments in indigenous content. John Solanoa, an actor and producer, recommended aligning the credit with language in SB2580 and warned that Hawaii’s current 22% base may be uncompetitive compared to other jurisdictions offering higher base rates.

DBEDT and the Honolulu Film Office recommended operational fixes rather than wholesale additions. Skinner and the Honolulu Film Office suggested establishing an indigenous advisory panel to verify indigenous content and changing front-end reporting forms so local-hire commitments can be tracked when a production applies, rather than waiting until the annual report is filed the following March. “You don't know that they actually hit that number until they file the report in March the following year,” Skinner said, calling enforcement a challenge.

Committee members pressed on criteria for an annual cap waiver and the timing used to verify an 80% local-hire threshold. Skinner said some productions already report high local-hire percentages (local productions often report 90–100%, offshore productions 80–85%) but cautioned that stacking multiple bonus percentages would increase fiscal exposure.

Senator Fevella emphasized taxpayer protections and said past credits were awarded even when qualifications were not met, referencing a previous production that received a credit despite alleged noncompliance. The committee chair moved HB1939 with an SD1, amending the bill’s effective date and applicability; the motion passed in committee. The transcript records the committee advancing the measure but does not provide a precise roll-call tally.

The committee indicated it will continue work on operational language and consider integrating streamlined provisions that can be implemented quickly, with more complex items deferred to the biennium to avoid delaying relief for the industry.