Report Title:

Digital Media; Tax Credit; Appropriation

 

Description:

Establishes an additional five per cent tax credit for qualified production costs incurred by a qualified production in any county of the State; provided that the qualified production employs workers who are Hawaii residents, who are paid a base rate of $200 per day for a ten-hour day, who participate in on-the-job training, or complete a motion picture, digital media, or film production training course, and are certified as a trainee by the film industry branch of the department of business, economic development, and tourism; establishes a motion picture, digital media, or film production training course; appropriates funds. (SD1)

 


THE SENATE

S.B. NO.

2273

TWENTY-FOURTH LEGISLATURE, 2008

S.D. 1

STATE OF HAWAII

 

 

 

 

 

A BILL FOR AN ACT

 

 

RELATING TO DIGITAL MEDIA.

 

 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

 


SECTION 1. Section 235-17, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

"(a) Any law to the contrary notwithstanding, there shall be allowed to each taxpayer subject to the taxes imposed by this chapter, an income tax credit which shall be deductible from the taxpayer's net income tax liability, if any, imposed by this chapter for the taxable year in which the credit is properly claimed. The amount of the credit shall be:

(1) Fifteen per cent of the qualified production costs incurred by a qualified production in any county of the State with a population of over seven hundred thousand; or

(2) Twenty per cent of the qualified production costs incurred by a qualified production in any county of the State with a population of seven hundred thousand or less[.]; and

(3) Five per cent of the qualified production costs incurred by a qualified production in any county of the State; provided that the qualified production employs workers who satisfy the following requirements:

(A) Is a Hawaii resident;

(B) Is paid a base rate of $200 per day for a ten‑hour day, or $1,000 per week, as a comparable amount;

(C) Participates in on-the-job training, or completes a motion picture, digital media, or film production training course established under section 394-8(c) or approved by the film industry branch of the department of business, economic development, and tourism; and

(D) Is certified as a trainee by the film industry branch of the department of business, economic development, and tourism;

provided further that any credit claimed under this paragraph shall first be applied to a qualified production's qualified production costs prior to calculating any credit under paragraph (1) or (2).

[A] For the purposes of calculating a tax credit amount under paragraphs (1) or (2), qualified production occurring in more than one county may prorate its expenditures based upon the amounts spent in each county, if the population bases differ enough to change the percentage of tax credit.

In the case of a partnership, S corporation, estate, or trust, the tax credit allowable is for qualified production costs incurred by the entity for the taxable year. The cost upon which the tax credit is computed shall be determined at the entity level. Distribution and share of credit shall be determined by rule.

If a deduction is taken under section 179 (with respect to election to expense depreciable business assets) of the Internal Revenue Code of 1986, as amended, no tax credit shall be allowed for those costs for which the deduction is taken.

The basis for eligible property for depreciation of accelerated cost recovery system purposes for state income taxes shall be reduced by the amount of credit allowable and claimed."

SECTION 2. Section 383-128, Hawaii Revised Statutes, is amended by amending subsection (c) to read as follows:

"(c) The director shall require employers who use or who are assisted by any of these programs to contribute fifty per cent of the cost of the assistance in cash or in-kind contributions[.]; provided that this subsection shall not apply to section 394-8(c)."

SECTION 3. Section 394-8, Hawaii Revised Statutes, is amended to read as follows:

"[[]394-8[]] New industry training program. (a) There is hereby established the new industry training program, which shall be administered by the department of labor and industrial relations. Program moneys may be used to tailor training or retraining programs to meet the needs of qualifying businesses, to reimburse instructors for valid and approved expenditures in delivering instruction under the program, to rent appropriate training facilities and equipment, when necessary, to purchase or develop materials required to deliver the instruction, and for any other training-related expenses.

(b) The department shall utilize the resources of the University of Hawaii, including the community college system, the high technology development corporation, and other educational and training resources in the public and private sectors throughout the State as may be appropriate to be used to provide preemployment or employment training or on-the-job training for local residents hired by businesses relocating to Hawaii or expanding their local operations. The department may contract for these training needs from public agencies including the various University of Hawaii campuses, private educational institutions, nonprofit corporations, or private entities in order to provide the required training.

(c) The department shall be authorized to implement and operate motion picture, digital media, and film production training programs under this section; provided that these programs shall be developed and administered under the guidance of an advisory group consisting of members from the University of Hawaii, including the community colleges and the academy of creative media, the Hawaii film office, and trade unions; and provided further that moneys from the employment and training fund may be expended in support of the training programs, pursuant to section 383‑128(b)(3)."

SECTION 4. There is appropriated out of the general revenues of the State of Hawaii the sum of $           or so much thereof as may be necessary for fiscal year 2008-2009 for motion picture, digital media, or film production training approval and certification by the film industry branch, pursuant to section 235-17(a)(3), Hawaii Revised Statutes.

The sum appropriated shall be expended by the department of business, economic development, and tourism for the purposes of this Act.

SECTION 5. There is appropriated out of the employment and training fund the sum of $           or so much thereof as may be necessary for fiscal year 2008-2009 for development and implementation of the motion picture, digital media, and film production training programs, pursuant to section 394-8(c), Hawaii Revised Statutes.

The sum appropriated shall be expended by the department of labor and industrial relations for the purposes of this Act.

SECTION 6. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 7. This Act shall take effect on July 1, 2008; provided that section 1 of this Act shall be repealed on January 1, 2016, and section 235-17, Hawaii Revised Statutes, shall be reenacted in the form in which it read on the day before the effective date of this Act.