STAND

 

STAND. COM. REP. NO. 762-04

Honolulu, Hawaii

, 2004

RE: H.B. No. 2611

H.D. 2

 

 

 

Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-Second State Legislature

Regular Session of 2004

State of Hawaii

Sir:

Your Committee on Finance, to which was referred H.B. No. 2611, H.D. 1, entitled:

"A BILL FOR AN ACT RELATING TO THE ENTERTAINMENT INDUSTRY,"

begs leave to report as follows:

The purpose of this bill is to provide incentives to attract film, video, and sound recording production companies to the state by:

(1) Expanding the provisions for the motion picture and film production income tax credit (production tax credit) to include digital media and sound recording productions;

(2) Increasing the current production tax credit from four percent to 15 percent of costs incurred;

(3) Clarifying the requirements a production must have to qualify for the production tax credit, such as a minimum amount of expenditure and a minimum percentage of labor hired from within the State of Hawaii;

(4) Requiring qualifying taxpayers to submit to the Department of Business, Economic Development, and Tourism (DBEDT) a report detailing the costs incurred and tax credit claimed, after which DBEDT will issue a certificate of verification; and

(5) Establishing requirements that must be met by businesses producing performing arts products that are claiming the High Technology Business Investment Tax Credit.

DBEDT, Big Island Film Office of the County of Hawaii Department of Research and Development, Roy Sakuma Productions, Inc., Ohe Records, Punahele Productions, and several concerned individuals testified in support of this bill. The Department of Taxation supported the intent of the measure. The Office of Information Practices and Tax Foundation of Hawaii commented on the bill.

Your Committee has amended this bill by:

(1) Changing the percentages of the tax credits to an unspecified amount;

(2) Changing its effective date to July 1, 2010, to facilitate further discussion; and

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

Your Committee would like it noted that it has chosen to change the percentages of the various tax credits to an unspecified amount to take a cautious approach to the fiscal situation of the State, especially in anticipation of the next estimates by the Council on Revenues.

As affirmed by the record of votes of the members of your Committee on Finance that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 2611, H.D. 1, as amended herein, and recommends that it pass Third Reading in the form attached hereto as H.B. No. 2611, H.D. 2.

Respectfully submitted on behalf of the members of the Committee on Finance,

 

____________________________ DWIGHT Y. TAKAMINE, Chair