STAND. COM. REP. NO. 1132

Honolulu, Hawaii

RE: S.B. No. 1237

S.D. 1

Honorable Ronald D. Kouchi

President of the Senate

Thirty-Second State Legislature

Regular Session of 2023

State of Hawaii

Sir:

Your Committee on Ways and Means, to which was referred S.B. No. 1237 entitled:

"A BILL FOR AN ACT RELATING TO THE HAWAII FILM INDUSTRY,"

begs leave to report as follows:

The purpose and intent of this measure is to facilitate film production in the State.

Specifically, the measure:

(1) Establishes the Hawaii Film Commission and transfers certain rights, powers, functions, and duties of the existing Hawaii State Film Office to the Commission;

(2) Establishes and appropriates $140,000 for each of the fiscal years 2023-2024 and 2024-2035 for an executive director position within the Hawaii Film Commission; and

(3) Extends from December 31, 2032, to December 31, 2038, the sunset date for the motion picture, digital media, and film production income tax credit.

Your Committee received written comments in support of this measure from the Screen Actors Guild – American Federation of Television and Radio Artists, Teamsters Local 996, IATSE LOCAL 665, and twenty-three individuals.

Your Committee received written comments on this measure from the University of Hawaii System; Department of Taxation; Department of Business, Economic Development, and Tourism; and Tax Foundation of Hawaii.

Your Committee finds that the film industry plays an important role in the State's economy. Your Committee believes that the administrative changes and tax credit extension proposed by this measure will improve and strengthen the industry.

Your Committee has amended this measure by:

(1) Establishing a new film studio tax credit and qualifications to claim the tax credit;

(2) Amending the administration of the motion picture, digital media, and film production income tax credit;

(3) Changing from $50,000,000 to an unspecified sum the statutory annual aggregate cap amount on the motion picture, digital media, and film production income tax credit;

(4) Requesting the Auditor to conduct a performance and financial audit of the Hawaii Film Office and appropriating an unspecified amount for the audit;

(5) Clarifying that the person who served as the State Film Commissioner immediately before the effective date of the measure shall serve as the initial executive director of the Hawaii Film Commission, until that person resigns or until the Commission appoints a replacement, whichever occurs first;

(6) Inserting language to facilitate the transfer of certain rights, powers, functions, and duties from the Hawaii State Film Office to the Hawaii Film Commission;

(7) Changing to an unspecified amount the appropriation to fund the executive director position;

(8) Changing the effective date to July 1, 2050, to facilitate further discussion on the measure; and

(9) Making numerous technical nonsubstantive amendments for purposes of clarity, consistency, and style.

As affirmed by the record of votes of the members of your Committee on Ways and Means that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 1237, as amended herein, and recommends that it pass Third Reading in the form attached hereto as S.B. No. 1237, S.D. 1.

Respectfully submitted on behalf of the members of the Committee on Ways and Means,

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DONOVAN M. DELA CRUZ, Chair