HB2438 HD1

SECTION 1. The legislature finds that Hawaii's arts and cultural organizations preserve the history, language, and traditions that shape the State's communities and strengthen learning, connection, and opportunity for residents across the islands. The legislature further finds that stable and predictable funding is necessary to expand access to cultural programs and ensure that these organizations can continue serving future generations.

Therefore, the purpose of this Act is to establish the Hawaii cultural trust and related incentives to encourage charitable giving and to provide long-term support for Hawaii's arts, culture, and heritage.

SECTION 2. Chapter 201, Hawaii Revised Statutes, is amended by adding a new part to be appropriately designated and to read as follows:

"Part . HAWAII CULTURAL TRUST

§201-A Definitions. As used in this part, unless the context otherwise requires:

"Advisory committee" means the Hawaii cultural trust advisory committee.

"Coordinator" means the Hawaii cultural trust coordinator.

"County" includes the city and county of Honolulu, county of Hawaii, county of Kauai, and county of Maui.

"Department" means the department of business, economic development, and tourism.

"Director" means the director of business, economic development, and tourism.

"Qualified Hawaii cultural organization" means:

(1) An organization that:

(A) Is organized and operated in the State as a nonprofit organization exempt under section 501(c)(3) of the Internal Revenue Code;

(B) Is registered and in good standing with the department of the attorney general pursuant to chapter 467B;

(C) Has a primary purpose of providing cultural programs, services, or education that advances one or more of the following:

(i) Arts and arts education, including visual arts, performing arts, music, dance, theater, literary arts, media arts, and arts learning;

(ii) Native Hawaiian culture, language, ʻike kupuna, cultural practice, and cultural perpetuation;

(iii) History, heritage, and preservation, including museums, archives, historic sites, and cultural heritage programs; and

(iv) Humanities and cultural literacy, including storytelling, community-based cultural education, and cultural research and interpretation; and

(D) Meets any additional criteria established by the department and adopted by rule pursuant to chapter 91; and

(2) Shall not include:

(A) Any organization that is primarily organized for religious worship, political campaign activity, or lobbying;

(B) Any organization that is primarily a private foundation, as defined under section 509(a) of the Internal Revenue Code; or

"Trust" means the Hawaii cultural trust.

"Trust account" means the Hawaii cultural trust account.

§201-B Hawaii cultural trust; trust account; established; purpose. (a) There is established within the treasury of the State the Hawaii cultural trust and trust account.

(b) Funds in the trust account shall be used solely for the purposes of the trust, as set forth in subsection (d), and shall not lapse at the end of each fiscal year.

(1) The legislature;

(2) The federal government or a county government;

(3) Funds received from the issuance of special number plates issued pursuant to section 249- ;

(4) Private sources, including businesses, other organizations, and individuals; and

(5) Interest earned on funds in the trust account.

(d) Funds in the trust account shall be allocated annually as follows:

(1) Fifty per cent shall be allocated to the state foundation on culture and the arts to expand arts programs and programs that foster creativity and cultural expression; and

(2) Fifty per cent shall be allocated to the office of Hawaiian affairs for cultural preservation, education, and community-based cultural advancement.

§201-C Hawaii cultural trust coordinator. The Hawaii cultural trust account shall be administered by the department through the Hawaii cultural trust coordinator, who shall be appointed and supervised by the director, and shall be employed without regard to chapter 76. The coordinator shall be assisted by the Hawaii cultural trust advisory committee.

§201-D Hawaii cultural trust advisory committee. (a) The Hawaii cultural trust advisory committee is established within the department.

(b) The advisory committee shall advise the director and coordinator regarding:

(1) Priorities for the distribution of funds within the trust account;

(2) Program criteria for the trust; and

(3) Community input and impact.

(1) The chairperson of the house of representatives standing committee with primary jurisdiction over culture and the arts, who shall serve as an ex officio, nonvoting member;

(2) The chairperson of the senate standing committee with primary jurisdiction over culture and the arts, who shall serve as an ex officio, nonvoting member;

(3) A representative of the state foundation on culture and the arts;

(4) A representative of the office of Hawaiian affairs;

(5) Native Hawaiian cultural practitioners; and

(6) Representatives of nonprofit organizations from the arts, humanities, and heritage communities;

provided that there shall be no more than members on the committee; provided further that members of the committee appointed pursuant to paragraphs (3) through (6) shall serve as voting members.

§201-E Reports. No later than twenty days before the convening of each regular session, the department shall submit a report to the legislature and advisory committee regarding:

(1) The total amount of funds collected by and disbursed from the trust account;

(2) The recipient and purpose of each grant, award, or other disbursement made by the trust account;

(3) Measured impacts on cultural preservation and the arts;

(4) Evaluation metrics aligned with the goals of economic development and cultural vitality; and

(5) Recommendations, including proposed legislation, if any, to improve the programs and operations of the trust.

§201-F Rules. The department shall adopt rules pursuant to chapter 91 to implement this part."

SECTION 3. Chapter 235, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"§235- Hawaii cultural trust; income tax credit; administration. (a) There shall be allowed to each taxpayer subject to the taxes imposed by this chapter an income tax credit which shall be deductible from the taxpayer's net income tax liability, if any, imposed by this chapter for the taxable year in which the credit is properly claimed.

(b) A taxpayer may claim the credit under this section if the taxpayer made a monetary contribution during the taxable year to:

(1) The Hawaii cultural trust established pursuant to section 201-B; and

(2) One or more qualified Hawaii cultural organizations.

(c) The credit shall be equal to the amount of contributions made to the Hawaii cultural trust or the total amount of contributions made to one or more qualified Hawaii cultural organizations during the taxable year, whichever is less, subject to the limits set forth in subsection (d).

(d) The credit claimed under this section shall not exceed:

(1) $500 for a taxpayer filing any return other than a joint return;

(2) $1,000 for taxpayers filing a joint return; and

(3) $2,500 for a corporation subject to tax under this chapter.

(e) The credit allowed under this section shall be nonrefundable and shall be claimed only to the extent of the taxpayer's net income tax liability for the taxable year.

(f) The director of taxation shall prepare forms and may require proof, in a form prescribed by the director, of the contributions made pursuant to subsection (b).

(g) The proof required pursuant to subsection (f) may include receipts or written acknowledgments from the Hawaii cultural trust and from qualified Hawaii cultural organizations, including the organization's name, the organization's federal employer identification number, and the amount and date of the contribution.

(h) The state foundation on culture and the arts shall work with the office of Hawaiian affairs to maintain a list of qualified Hawaii cultural organizations for purposes of administering the tax credit. The list shall be posted on each respective agency's official website and shall be updated annually.

(i) The director of taxation may adopt rules pursuant to chapter 91 to implement this section.

(j) As used in this section, "qualified Hawaii cultural organization" has the same meaning as in section 201-A."

SECTION 4. Chapter 249, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"§249- Special number plates; Hawaii cultural trust; authorized. (a) Notwithstanding any law to the contrary, the director of finance shall issue to any registered owner of a motor vehicle, who is a resident of the State, upon completed application and payment of the required fees, a special number plate for the registered owner's motor vehicle supporting the Hawaii cultural trust established pursuant to section 201-B.

(b) The director of finance of the city and county of Honolulu, in consultation with the directors of finance of the counties of Kauai, Maui, and Hawaii; chiefs of police of the city and county of Honolulu and the counties of Kauai, Maui, and Hawaii; and director of business, economic development, and tourism, shall establish a special number plate design that:

(1) Contains words, images, or both, that indicate the special number plate is issued to support the Hawaii cultural trust;

(2) Is similar in shape and size to the uniform state number plate prescribed by law; and

(3) Does not obstruct the visibility of the numbers or letters or any other information that is required by law to be on a number plate and is readily identifiable and distinguishable under actual traffic conditions.

(1) Infringe upon or otherwise violate any trademark, trade name, service mark, copyright, or other proprietary or property right;

(2) Represent any obscene or degrading image, idea, word, or phrase;

(3) Advertise or endorse a product, brand, or service that is provided for sale;

(4) Promote any religious belief; or

(5) Promote any philosophy based on prejudice or that is contrary to state civil rights laws.

(d) Each special number plate shall be securely fastened to the motor vehicle in lieu of the uniform state number plate.

(e) The director of finance shall charge a special number plate fee at least equal to the county's cost of providing the special number plate and administrative costs, if any, plus a fundraising fee to be determined by the director of finance in consultation with the director of business, economic development, and tourism. The fundraising fee shall be in addition to any other state or county fees collected for a motor vehicle registration or license plate.

(f) The director of finance may charge an additional fundraising fee of the same or a different amount as the fundraising fee established pursuant to subsection (e), for the renewal of a special number plate. If an additional fundraising fee is implemented pursuant to this subsection, the director of finance shall revoke the special number plate of any registered owner of a motor vehicle who fails to pay the additional fundraising fee imposed by this subsection.

(g) The revenue generated by the fundraising fees, or a portion of the revenue generated by the fundraising fees as determined by the director of finance, shall be deposited in the name of the Hawaii cultural trust into the Hawaii cultural trust account. The director of finance shall determine the most efficient means of directing the revenue generated by the fundraising fees to the Hawaii cultural trust.

(h) The director of finance may revoke all special number plates issued pursuant to this section if the total number of registered owners of motor vehicles that obtain the special number plates is less than one hundred fifty within three years of issuance of the first special number plate.

(i) Nothing in this section shall be construed to apply to any plates issued pursuant to sections 249-9.2, 249-9.5, 249-9.6, 249-9.7, 249-9.8, and 249-9.9.

(j) As used in this section, unless a different meaning appears from the context, "special number plate" means a license plate that represents the Hawaii cultural trust."

SECTION 5. In codifying the new sections added by section 2 of this Act, the revisor of statutes shall substitute appropriate section numbers for the letters used in designating the new sections in this Act.

SECTION 6. New statutory material is underscored.

SECTION 7. This Act shall take effect upon its approval; provided that section 3 of this Act shall apply to taxable years beginning after December 31, 2025.

HOUSE OF REPRESENTATIVES	H.B. NO.	2438
THIRTY-THIRD LEGISLATURE, 2026		H.D. 1
STATE OF HAWAII