STAND. COM. REP. NO. 817

Honolulu, Hawaii

RE:    H.B. No. 1308

       H.D. 2

       S.D. 1

Honorable Shan S. Tsutsui

President of the Senate

Twenty-Sixth State Legislature

Regular Session of 2011

State of Hawaii

Sir:

     Your Committees on Economic Development and Technology and Education, to which was referred H.B. No. 1308, H.D. 2, entitled:

"A BILL FOR AN ACT RELATING TO DIGITAL MEDIA,"

beg leave to report as follows:

     The purpose and intent of this measure is to:

     (1)  Establish digital media enterprise subzones as unspecified geographic areas surrounding University of Hawai‘i campuses that are also designated as enterprise zones;

     (2)  Establish an unspecified digital media infrastructure tax credit;

     (3)  Change the name of the Hawaii Television and Film Development Board and the Hawaii Television and Film Development Special Fund to the Hawaii Film Office Board and the Hawaii Film Office Special Fund, respectively; and

     (4)  Amend the sources of revenue and the uses of the Hawaii Film Office Special Fund through June 30, 2021.

     Your Committees received testimony in support of this measure from the Department of Business, Economic Development, and Tourism and University of Hawai‘i System.  Your Committees received testimony in opposition to this measure from the Department of Taxation.  Your Committees received comments on this measure from the Office of Information Practices and Tax Foundation of Hawaii.

     Your Committees previously heard a companion measure, S.B. No. 1133, and has amended this measure by deleting its contents and replacing them with the language in S.B. No. 1133, S.D. 1.  As amended, this measure retains its original provisions and makes the following amendments:

     (1)  Changes the recapture percentage for the tax credit from ninety percent to twenty-five percent;

     (2)  Changes the effective date from July 1, 2112, to July 1, 2050, to allow for further discussion; and

     (3)  Makes technical, nonsubstantive amendments for the purposes of clarity and consistency.

     As affirmed by the records of votes of the members of your Committees on Economic Development and Technology and Education that are attached to this report, your Committees are in accord with the intent and purpose of H.B. No. 1308, H.D. 2, as amended herein, and recommend that it pass Second Reading in the form attached hereto as H.B. No. 1308, H.D. 2, S.D. 1, and be referred to the Committee on Ways and Means.

Respectfully submitted on behalf of the members of the Committees on Economic Development and Technology and Education,

____________________________ JILL TOKUDA, Chair

____________________________ CAROL FUKUNAGA, Chair