HB1758 HD1.DOC

HOUSE OF REPRESENTATIVES	H.B. NO.	1758
TWENTY-SIXTH LEGISLATURE, 2012		H.D. 1
STATE OF HAWAII

A BILL FOR AN ACT

RELATING TO BUSINESS DEVELOPMENT IN HAWAII.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

SECTION 1. The legislature finds that the film industry in Hawaii is an important component of a diversified economy and that its financial impact can be strengthened significantly if existing incentives for the industry are enhanced.

The legislature further finds that it is necessary to enhance the incentives that might lower film industry production costs in order to allow Hawaii to compete with other film production centers in attracting a greater number of significant projects to the islands and to continue to build the local film industry infrastructure.

The purpose of this Act is to encourage business development in Hawaii through the growth of the film industry by providing incentives that attract media infrastructure projects in order to facilitate more film and television productions in Hawaii.

SECTION 2. Chapter 201, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"§201- Qualified media infrastructure projects; revenue bonds; special fund. (a) The director may issue revenue bonds in amounts not more than $25,000,000 to assist individuals with qualified media infrastructure projects.

(b) The revenue bonds, including refunding revenue bonds, shall not constitute indebtedness within the meaning of any constitutional or statutory provision limiting the incurring of indebtedness.

(c) Revenue bonds, including refunding revenue bonds, issued under this section and the income derived therefrom shall be exempt from all state, county, and municipal taxation.

(d) Proceeds received from the issuance of any revenue bonds shall be deposited into the qualified media infrastructure projects special fund established under subsection (e).

(e) There shall be created in the state treasury the qualified media infrastructure projects special fund, which shall be administered by the director. Funds shall consist of the proceeds from revenue bonds issued under subsection (a), legislative appropriations, donations, and any interest thereon. The funds shall be used to provide financial assistance, in the form of loans, grants, or other form of financial assistance, as determined by the director, for qualified media infrastructure projects; provided that no financial assistance shall be disbursed prior to July 1, 2015.

(f) Applications for financial assistance for a qualified media infrastructure project shall include:

(1) A detailed description of the qualified media infrastructure project;

(2) A preliminary budget;

(3) A complete detailed business plan and market analysis;

(4) The estimated start and completion dates; and

(5) If the application is deemed incomplete by the director, any additional information as may be requested by the director prior to the taking of any further action by the director.

(g) In order to receive financial assistance from the proceeds of bonds issued under this section, the applicant shall provide matching funds of one dollar for every dollar received if the applicant's funds are comprised of entirely nongovernmental sources of funds, including EB-5 investments; provided that the applicant shall provide matching funds of twenty cents for every dollar received if the applicant's funds are comprised in part of funds derived from a county or other governmental entity.

(h) No applicant shall receive financial assistance under this section unless the applicant agrees to submit to a financial and management audit conducted by the state auditor upon the completion of the qualified media infrastructure project.

(i) The director shall adopt rules to implement this section.

(j) For the purposes of this section, a "qualified media infrastructure project" means the development, construction, renovation, or operation of a film, video, television, or media production or post-production facility and the immovable property and equipment related thereto, or any other facility that supports and is a necessary component of the proposed infrastructure project that is located in the State; provided that the facility may include a movie theater or other commercial exhibition facility to assist in offsetting operating costs of the production or post-production facility, but shall not include a facility used to produce pornographic matter or a pornographic performance."

SECTION 3. New statutory material is underscored.

SECTION 4. This Act shall take effect on July 1, 2112.