STAND. COM. REP. NO.  455

Honolulu, Hawaii

                , 2013

RE:   H.B. No. 726

      H.D. 1

Honorable Joseph M. Souki

Speaker, House of Representatives

Twenty-Seventh State Legislature

Regular Session of 2013

State of Hawaii

Sir:

     Your Committee on Economic Development & Business, to which was referred H.B. No. 726 entitled:

"A BILL FOR AN ACT RELATING TO FILM AND DIGITAL MEDIA INDUSTRY DEVELOPMENT,"

begs leave to report as follows:

The purpose of this measure is to encourage new film, television, entertainment, digital media, and music production in Hawaii by:

     (1)  Increasing the amount of the Motion Picture, Digital Media, and Film Production Income Tax Credit for qualified production costs incurred by a qualified production to:

          (A)  Twenty percent in any county of the State with a population of over seven hundred thousand; and

          (B)  Twenty-five percent in any county of the State with a population of seven hundred thousand or less;

     (2)  Eliminating the cap on the tax credit that may be claimed per qualified production; and

     (3)  Extending the Motion Picture, Digital Media, and Film Production Income Tax Credit until 2023.

NBC Universal Media, LLC; Maui Chamber of Commerce; and Island Film Group testified in support of this measure.  The Department of Business, Economic Development, and Tourism; Department of Taxation; Tax Foundation of Hawaii; and Honolulu Film Office submitted comments.

     Your Committee has amended this measure by:

     (1)  Changing the percentage increases in the amount of the tax credit for qualified production costs incurred by a qualified production to unspecified amounts;

     (2)  Reinserting language establishing the cap on the tax credit that may be claimed per qualified production but leaving the amount of the cap as an unspecified amount; and

     (3)  Making technical, nonsubstantive amendments for clarity, consistency, and style.

     As affirmed by the record of votes of the members of your Committee on Economic Development & Business that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 726, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 726, H.D. 1, and be referred to the Committee on Finance.

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

____________________________

CLIFT TSUJI, Chair