Honorable Robert Bunda

President of the Senate

Twenty-Third State Legislature

Regular Session of 2006

State of Hawaii

Sir:

Your Committee on Ways and Means, to which was referred S.B. No. 2570, S.D. 1, entitled:

begs leave to report as follows:

The purpose of this measure is to expand the scope of the motion picture and film production income tax credit to include the State's digital media industry.

The measure also increases the motion picture and film production income tax credit from four per cent to:

The measure also clarifies various qualifying provisions with respect to the tax credit.

Your Committee finds that the film industry has generated approximately $160,000,000 in tax revenues for the State since 1992. These revenues, however, may be in jeopardy as there has been a dramatic increase in the number of state and local governments attempting to attract movie productions. Those jurisdictions have experienced dramatic increases in in-state spending and significant growth in workforce and infrastructure development.

Your Committee further finds that, by increasing the tax credit for motion picture, film, and digital media productions, this measure will encourage the growth of the movie industry locally to attract more film and television productions to Hawaii to compete more effectively against other jurisdictions that offer similar tax incentives.

Your Committee has amended the measure by making technical nonsubstantive amendments for the purpose of clarity and style.

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. 2570, S.D. 1, as amended herein, and recommends that it pass Third Reading in the form attached hereto as S.B. No. 2570, S.D. 2.