Honorable Robert Bunda

President of the Senate

Twenty-Second State Legislature

Regular Session of 2004

State of Hawaii

Sir:

Your Committee on Ways and Means, to which was referred S.B. No. 2558, S.D. 1, entitled:

begs leave to report as follows:

The purpose of this measure is to diversify Hawaii's economy by expanding the State's current tax incentive packages for motion picture, television, and film production.

This measure increases the scope of the current motion picture and film production income tax credit to include digital media and sound recording productions; increases the current refundable tax credit from four per cent to fifteen per cent of costs incurred on Oahu and twenty per cent of costs incurred on neighbor islands; and provides specific language for qualifying for the investment tax credit under Act 221.

Your Committee finds that Hawaii's motion picture and television, sound recording, and performing arts industry leaders have witnessed a dramatic increase in the number of jurisdictions that are offering significant tax incentive packages to attract productions. This measure is a first step in bringing Hawaii to a competitive level with other jurisdictions and developing a significantly more productive local entertainment industry.

Your Committee has amended this measure by inserting a per year cap and a total cap with unspecified amounts in new subsection (h), and by making various amendments for the purpose of clarity.

As affirmed by the record of votes of the members of your Committee on Ways and Means that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 2558, S.D. 1, as amended herein, and recommends that it pass Third Reading in the form attached hereto as S.B. No. 2558, S.D. 2.