STAND. COM. REP. NO.648-02

Honolulu, Hawaii

, 2002

RE: H.B. No. 2803

H.D. 2




Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-First State Legislature

Regular Session of 2002

State of Hawaii


Your Committee on Finance, to which was referred H.B. No. 2803, H.D. 1, entitled:


begs leave to report as follows:

The purpose of this bill is to amend the motion picture and film production income tax credit by:

(1) Establishing a tax credit up to twenty-two percent of the cost of wages and salaries, up to a maximum of $25,000 for each taxpayer;

(2) Allowing a tax credit up to four percent of the total costs incurred in the production of motion pictures, television films, and commercials, excluding the costs for wages and salaries; and

(3) Making production costs of commercials eligible for the tax credit.

The Big Island Film Office, Department of Business, Economic Development, and Tourism, Hawaii Island Economic Development Board, FilmWorks Pacific Ltd., and an individual submitted testimony in support of this bill. The Department of Taxation submitted testimony in support of the intent of this bill. The Department of Budget and Finance submitted testimony in opposition to this bill. The Tax Foundation of Hawaii submitted comments on this bill.

Your Committee has amended this bill by:

(1) Clarifying that the amount of the tax credit is based on the first $25,000 of the wage and salary of each employee of the taxpayer who claims a tax credit;

(2) Deleting the percentage allowed for each tax credit; and

(3) Making technical, nonsubstantive changes for purposes of style and clarity.

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. 2803, H.D. 1, as amended herein, and recommends that it pass Third Reading in the form attached hereto as H.B. No. 2803, H.D. 2.

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