STAND. COM. REP. NO. 475-00

                                 Honolulu, Hawaii
                                                   , 2000

                                 RE: H.B. No. 2959
                                     H.D. 2




Honorable Calvin K.Y. Say
Speaker, House of Representatives
Twentieth State Legislature
Regular Session of 2000
State of Hawaii

Sir:

     Your Committee on Culture and the Arts, to which was
referred H.B. No. 2959, H.D. 1, entitled: 

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

begs leave to report as follows:

     The purpose of this bill is to assist the production of
television programs to ultimately promote Hawaii to the world.

     The bill creates the Hawaii television production committee,
the Hawaii television production special fund and the Hawaii
television production capital improvement special fund.  The bill
also provides an appropriation and bond issuance for the purposes
of the bill.

     Your committee finds that film and television productions in
Hawaii provide an invaluable source of advertisement and
promotion for our State.  Over the last four years, Hawaii's film
and television industry has experienced double-digit growth.  It
is a $100,000,000 per year industry in terms of production
expenses and contributes $15,000,000 per year in State tax
revenues.  Within the next five to ten years, there is the
potential for Hawaii's film and television industry to grow to a
$300,000,000 per year industry, with $45,000,000 in tax revenues.


 
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     If the State wishes to make use of film and television
exposure, it is absolutely essential to provide film and
television producers with financial incentives and assistance to
encourage them to produce their projects here.

     The legislature further finds that the most effective way to
provide such incentives is to create a special fund and
guaranteed loan program that can be selectively administered to
provide grants and loans for television and film productions that
promote Hawaii.  Under the direction of an appointed board, the
fund and loan program would be able to provide needed assistance
and facilitate the acquisition of production capital for film and
television producers, but still ensure and protect the State's
interests in the process.

     Therefore, your committee has amended the bill by:

     (1)  Expanding the scope of the bill to include film and
          other types of cinematic productions that could serve
          Hawaii's promotional needs;
     (2)  Creating a loan guarantee program and establishing the
          Hawaii Television and Film Development Board to
          administer the loan guarantee program and a special
          fund with adequate safeguards to both assist the
          television and film industry while protecting and
          insuring the State's interests;
     (3)  Allowing that the State share in any profits made by
          borrowers of the loan program in terms of royalties,
          licenses etc; and 
     (4)  Increasing the film industry tax credit that is
          currently not competitive with similar tax credits in
          other states.

     Testimony in support of this bill was received from Masini
Television and Film Enterprises, Baywatch Hawaii, and numerous
members of the public.  The Department of Business, Economic
Development and Tourism, the City and County of Honolulu Film
Office, the Maui County Office of Economic Development, the
Hawaii County Department of Research and Development, the Kauai
Office of Economic Development, and numerous organizations
supporting the entertainment industry supported the intent of the
bill and suggested amendments.  A number of individuals also
provided additional comments.

     As affirmed by the record of votes of the members of your
Committee on Culture and the Arts that is attached to this

 
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report, your Committee is in accord with the intent and purpose
of H.B. No. 2959, H.D. 1, as amended herein, and recommends that
it pass Second Reading in the form attached hereto as H.B. No.
2959, H.D. 2, and be referred to the Committee on Finance.

                                   Respectfully submitted on
                                   behalf of the members of the
                                   Committee on Culture and the
                                   Arts,



                                   ______________________________
                                   K. MARK TAKAI, Chair

 
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