(1) Extends the Motion Picture Tax Credit to digital media projects;

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

(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 to maintain records and report yearly totals to the Director of Taxation;

(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 the measure on January 1, 2011.

(1) Amend section 235-7.3, Hawaii Revised Statutes, to add digital media to the definition of "performing arts products" so that it mirrors the definition of "performing arts products" added to section 235-110.9, Hawaii Revised Statutes;

(2) Amend section 235-110.9, Hawaii Revised Statutes, by:

(3) Increase the existing four per cent income tax credit on Hawaii qualified production expenditures to fifteen per cent for productions on Oahu and twenty per cent for productions on the neighbor islands;

(4) Allow a qualified production to receive a wage reimbursement tax credit for an unspecified percentage of the wages paid to below-the-line hires that are Hawaii residents;

(5) Delete the tax credit for transient accommodations taxes established under section 235-17(b), Hawaii Revised Statutes;

(6) Require that motion picture or film productions expend a minimum of $200,000 in the State to qualify for the tax credit;

(7) Require that a sound recording production expend a minimum of $20,000 in the State to qualify for the tax credit;

(8) Require that a production that qualifies for the tax credit provide the State with a shared-card, end-title credit;

(9) Require that productions interested in claiming the tax credit be pre-qualified by the Department of Business, Economic Development, and Tourism;

(10) Establish record keeping and reporting requirements for the Departments of Business, Economic Development, and Tourism and Taxation;

(11) Define terms such as "below-the-line hires", "commercials", "digital media", "post-production", "production", "qualified production", and "qualified production costs";

(12) Prohibit the claiming of tax credits under both the production expenditure tax credit established under section 235-17, Hawaii Revised Statutes, and the investment tax credit established under section 235-110.9, Hawaii Revised Statutes;

(13) Cap tax credit claims at $8,000,000 per production;

(14) Require the Department of Business, Economic Development, and Tourism, in consultation with the Department of Taxation and the county film offices, to develop an appropriate revenue generation and economic benefit model to determine the economic impact of the enhanced film and digital media tax credits established under this Act;

(15) Require the Department of Business, Economic Development, and Tourism, beginning with the 2006 Regular Session, to annually submit reports on the film and digital media production expenditure, revenue projection, and revenue realization information to the Legislature until the 2011 Regular Session;

(16) Make the amendments made to the enhanced film and digital media tax credits applicable to taxable years beginning after December 31, 2004; and

(17) Changing the effective date to July 1, 2050, to encourage further discussion.