STAND. COM. REP. NO. 961

Honolulu, Hawaii

, 2005

RE: H.B. No. 1590

H.D. 2

 

 

 

Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-Third State Legislature

Regular Session of 2005

State of Hawaii

Sir:

Your Committee on Finance, to which was referred H.B. No. 1590, H.D. 1, entitled:

"A BILL FOR AN ACT RELATING TO THE HAWAII FILM AND DIGITAL MEDIA INDUSTRY,"

begs leave to report as follows:

The purpose of this bill is to expand the initiative the State has taken in encouraging the motion picture, digital media, and film industries, while protecting the State's interests by limiting and gathering data on the tax credits issued. This bill among other things:

(1) Increases the amount of the income tax credit for motion picture, digital media, and film productions (Motion Picture Tax Credit) to:

(A) Fifteen percent of qualified production costs incurred in any county of the State with a population over 700,000; and

(B) Twenty percent of qualified production costs incurred in any county of the State with a population of 700,000 or less;

(2) Extends the Motion Picture Tax Credit to digital media

projects;

(3) Repeals the variable credit based on actual expenditures for transient accommodations;

(4) Establishes qualification requirements for productions;

(5) Establishes reporting and filing requirements for qualified productions and requires the Department of Business, Economic Development and Tourism (DBEDT) to maintain records and report yearly totals to the Tax Director;

(6) Limits the credit to $8,000,000 per production;

(7) Prohibits productions that have received financing for which a credit was claimed under the High Technology Business Investment Tax Credit from claiming the Motion Picture Tax Credit in the same tax year;

(8) Applies the Motion Picture Tax Credit to qualified production costs incurred after December 31, 2004, and before January 1, 2011; and

(9) Repeals the provisions of this bill on January 1, 2011.

DBEDT, The Big Island Film Office, Maui Film Office, Screen Actors Guild, Hawaii State AFL-CIO, Hilton Hotels Hawaii, Honolulu Film Office, Home Baked Entertainment, and concerned individuals supported this bill. The Department of Taxation and concerned individuals supported the intent of this measure. A concerned individual opposed this bill. The Tax Foundation of Hawaii provided comments on this measure.

Your Committee has amended this bill by:

(1) Blanking out the tax credit percentages;

(2) Changing the effective date to July 1, 2099, to encourage further discussion; and

(3) Making technical, nonsubstantive amendments for clarity, consistency, and style.

As affirmed by the record of votes of the members of your Committee on Finance that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 1590, H.D. 1, as amended herein, and recommends that it pass Third Reading in the form attached hereto as H.B. No. 1590, H.D. 2.

Respectfully submitted on behalf of the members of the Committee on Finance,

 

____________________________

DWIGHT TAKAMINE, Chair