STAND. COM. REP. NO.2267
Honolulu, Hawaii
, 2002
RE: S.B. No. 3021
S.D. 1
Honorable Robert Bunda
President of the Senate
Twenty-First State Legislature
Regular Session of 2002
State of Hawaii
Sir:
Your Committees on Tourism and Intergovernmental Affairs and Economic Development and Technology, to which was referred S.B. No. 3021 entitled:
"A BILL FOR AN ACT RELATING TO MOTION PICTURE AND FILM PRODUCTION,"
beg leave to report as follows:
The purpose of this measure is to expand Hawaii's tax credits for motion picture and television production.
Testimony in support of this measure was received from the Department of Business, Economic Development, and Tourism, Honolulu Film Office, and Big Island Film Office. The Department of Budget and Finance testified in opposition. The Department of Taxation and the Tax Foundation of Hawaii submitted comments.
Your Committees find that since 1997, Hawaii has offered a three per cent or four per cent tax credit on all Hawaii production expenditures to motion picture and television producers, depending on certain qualifying criteria. This includes the cost of goods and services, as well as wages and salaries, while filming in the State. Currently, Hawaii also offers a tax credit for hotel expenses equal to the 7.25 per cent transient accommodations tax.
Your Committees have heard that offering a tax credit is a welcome signal to the film industry, but the amount of the credit is not enough to compete with other financial incentives offered in other locations.
Your Committees support further incentives to attract more motion picture and film productions to Hawaii, but have heard concerns regarding the means as proposed in this measure.
Your Committees have amended this measure to:
(1) Clarify that the four per cent tax credit excludes wages and salaries, which are eligible for tax credits of up to twenty-two per cent; provided that the tax credit for wages and salaries shall not exceed $25,000 per employee;
(2) Reinsert the provisions requiring the Director of Taxation to provide rules for these tax credits;
(3) Delete new language that would have set levels of production costs;
(4) Add commercials as eligible for the tax credits; and
(5) Make the tax credits effective for taxable years beginning after December 31, 2051, for purposes of further discussion.
As affirmed by the records of votes of the members of your Committees on Tourism and Intergovernmental Affairs and Economic Development and Technology that are attached to this report, your Committees are in accord with the intent and purpose of S.B. No. 3021, as amended herein, and recommend that it pass Second Reading in the form attached hereto as S.B. No. 3021, S.D. 1, and be referred to the Committee on Ways and Means.
Respectfully submitted on behalf of the members of the Committees on Tourism and Intergovernmental Affairs and Economic Development and Technology,
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____________________________ ROD TAM, Chair |
____________________________ DONNA MERCADO KIM, Chair |
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