STAND. COM. REP. NO. 2485

Honolulu, Hawaii

RE:    S.B. No. 2790

       S.D. 1

Honorable Ronald D. Kouchi

President of the Senate

Twenty-Eighth State Legislature

Regular Session of 2016

State of Hawaii

Sir:

     Your Committee on Economic Development, Environment, and Technology, to which was referred S.B. No. 2790 entitled:

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

begs leave to report as follows:

     The purpose and intent of this measure is to extend the motion picture, digital media, and film production income tax credit for an additional five years to provide stability and economic incentive predictability for the film industry, allow Hawaii to remain competitive in attracting qualified productions, and generate additional revenue, jobs, and tourism marketing exposure.

     Your Committee received testimony in support of this measure from the Department of Business, Economic Development and Tourism; Department of Taxation; NBC Universal Media, LLC; CBS Corporation; SAG-AFTRA Hawaii Local; I.A.T.S.E. Local 665; American Federation of Musicians' Local 677; and Hawaii Teamsters & Allied Workers Local 996.  Your Committee received comments on this measure from the Tax Foundation of Hawaii.

     Your Committee finds that the film industry in Hawaii is an important component of a diversified economy and that the motion picture, digital media, and film production income tax credit has been effective in stimulating the economy and creating quality jobs in a clean industry while promoting Hawaii as a visitor destination.  Your Committee further finds that the film production process can extend over several years due to extensive planning and development in the preproduction stage; therefore, the motion picture, digital media, and film production income tax credit's current sunset date of January 1, 2019, should be extended well in advance of the sunset date to prevent the discouragement of new productions that may be in the development and preproduction phases at that point in time.

     Your Committee has amended this measure by:

     (1)  Inserting language to require the Department of Business, Economic Development, and Tourism to submit an annual report to the Legislature on the activities and expenditures of the motion picture, digital media, and film production income tax credit; and

     (2)  Making technical, nonsubstantive amendments for the purposes of clarity and consistency.

     As affirmed by the record of votes of the members of your Committee on Economic Development, Environment, and Technology that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 2790, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 2790, S.D. 1, and be referred to your Committee on Ways and Means.

Respectfully submitted on behalf of the members of the Committee on Economic Development, Environment, and Technology,

________________________________

GLENN WAKAI, Chair