(1) Amends 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) Amends section 235-110.9, Hawaii Revised Statutes, to add a new definition for "performing arts products", and to add language to the definition of "qualified high technology business" to clarify that businesses claiming the tax credit under this section in taxable years beginning after December 31, 2005, shall provide proof to the Department of Business, Economic Development, and Tourism of educational or in-kind support of Hawaii secondary or post-secondary performing arts programs, employment of Hawaii residents, and use of facilities in the State;

(3) Increases 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) Allows 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) Deletes the tax credit for transient accommodations taxes established under section 235-17(b), Hawaii Revised Statutes;

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

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

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

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

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

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

(12) Prohibits 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) Caps tax credit claims at $8,000,000 per production;

(14) Requires 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) Requires 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; and

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

(1) Moving the provisions that:

out of the definition of "qualified production" and placed these provisions in the subsection that establishes the tax credit claim cap (proposed subsection (i)), since these provisions are substantive in nature;

(2) Changing the cap on tax credit claims from $8,000,000 to $1 per production;

(3) Adding the provisions that require performing arts production businesses that claim the tax credit established under section 235-110.9, Hawaii Revised Statutes, to provide proof of the business' support of Hawaii schools' performing arts programs, the employment of Hawaii residents, and the use of in-state production facilities in the production of the business' qualifying performing arts product that are being added to the definition of a "qualified high technology business", to the reporting requirements of section 235-110.9(e), Hawaii Revised Statutes;

(4) Changing the effective date of the measure from July 1, 2005 to July 1, 2050; and

(5) Making technical and nonsubstantive amendments for the purposes of clarity and style.