STAND. COM. REP. NO.  1194

Honolulu, Hawaii

                , 2011

RE:   S.B. No. 318

      S.D. 2

      H.D. 1

Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-Sixth State Legislature

Regular Session of 2011

State of Hawaii

Sir:

     Your Committee on Economic Revitalization & Business, to which was referred S.B. No. 318, S.D. 2, entitled:

"A BILL FOR AN ACT RELATING TO BUSINESS DEVELOPMENT IN HAWAII,"

begs leave to report as follows:

     The purpose of this measure is to encourage business development in Hawaii through the growth of the film industry by providing enhanced incentives that attract more film and television productions to Hawaii, thereby generating increased tax revenues.

     Testimony in support of the measure was submitted by the Mayor of the County of Maui; Hawaii Building and Construction Trades Council; International Alliance of Theatrical Stage Employees, Local 665; Plumbers and Fitters Union, Local 675; Relativity Media, LLC; and a private individual.  Testimony in support of the intent of the measure was submitted by the Department of Business, Economic Development, and Tourism.  The Department of Taxation and the Tax Foundation of Hawaii submitted comments on the measure.

     Your Committee finds that H.B. No 1551, H.D. 2, also addresses business development by providing enhanced incentives to encourage growth of Hawaii's film industry.  More specifically, H.B. No. 1551, H.D. 2:

     (1)  Provides a tax credit for qualified media infrastructure projects; and

     (2)  Establishes a qualified persons crew training program rebate.

     Your Committee further finds that partially funding the qualified media infrastructure tax credit from county transient accommodations tax allocations and providing the mayor and county council of each county with the authority to approve qualified media infrastructure projects that are proposed to be located in their respective county would allow the counties an opportunity to determine whether a qualified media infrastructure project would be beneficial to the local economy.

     Your Committee has amended this measure by replacing its contents with the contents of H.B. No. 1551, H.D. 2, and further amending the measure by:

     (1)  Requiring that an unspecified percentage of the qualified media infrastructure tax credit be funded by the transient accommodations tax credit allocation of the county in which the qualified media infrastructure project is to be located, subject to a letter of approval of the project issued by the mayor and council of the county; and

     (2)  Changing the effective date to July 1, 2112, to facilitate further discussion on the measure.

     As affirmed by the record of votes of the members of your Committee on Economic Revitalization & Business that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 318, S.D. 2, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 318, S.D. 2, H.D. 1, and be referred to the Committee on Finance.

Respectfully submitted on behalf of the members of the Committee on Economic Revitalization & Business,

____________________________

ANGUS L.K. McKELVEY, Chair