THE SENATE	S.B. NO.	2461
TWENTY-SIXTH LEGISLATURE, 2012
STATE OF HAWAII

A BILL FOR AN ACT

 

 

relating to digital media industry development.

 

 

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

 

     SECTION 1.  Chapter 201, part IX, Hawaii Revised Statutes, is amended to read as follows:

     "[[]PART IX.[]]  HAWAII [TELEVISION AND] FILM AND DIGITAL MEDIA DEVELOPMENT

     [[]§201-111[]]  Definitions.  As used in this part:

     "Applicant" means a person applying for a grant [or venture capital investment] from the board under this part.

     "Board" means the Hawaii [television and] film and digital media development board.

     "Eligible Hawaii project" or "project" means an entertainment project in which at least seventy-five per cent of the budget for the production costs, excluding salaries and costs for the producer, director, writer, screenplay, and actors in the project, is dedicated for the purchase or lease of goods or services from a vendor or supplier who is located and doing business in the State.

     "Fund" means the Hawaii [television and] film and digital media development special fund.

     ["Venture capital investment" means any of the following investments in a project:

     (1)  Common or preferred stock and equity securities without a repurchase requirement for at least five years;

     (2)  A right to purchase stock or equity securities;

     (3)  Any debenture, whether or not convertible or having stock purchase rights, which is subordinated, together with security interests against the assets of the borrower, by their terms to all borrowings of the borrower from other institutional lenders, and that is for a term of not less than three years, and that has no part amortized during the first three years; and

     (4)  General or limited partnership interests.]

     [[]§201-112[]]  Hawaii [television and] film and digital media development board.  (a)  There is established the Hawaii [television and] film and digital media development board.  The board shall be attached to the department of business, economic development, and tourism for administrative purposes only.  The board shall administer the grant [and venture capital investment programs] program and the Hawaii [television and] film and digital media development special fund established under this part[.  The board shall also assess and consider the overall viability and development of the television and film industries and make recommendations to appropriate state or county agencies.] to promote digital media industry development.

     (b)  The board shall be composed of [nine] eleven members, [four] six of whom shall be appointed by the governor pursuant to section 26-34, and all of whom shall serve four-year staggered terms.  [One] Two of the governor's appointments shall be made from a list of nominees submitted by the president of the senate and [another appointment] two of the governor's appointments shall be made from a list of nominees submitted by the speaker of the house of representatives.  The [four] appointed members shall possess a current working knowledge of the film, television, or entertainment industry.  The director of business, economic development, and tourism, and the chairs of the four county film commissions or its equivalent, [shall] may serve as ex officio voting members, who may be represented on the board by designees.

     The chairperson and vice chairperson of the board shall be selected by the board by majority vote.  [Five] Six members shall constitute a quorum, whose affirmative vote shall be necessary for all actions by the board.  The members shall serve without compensation but shall be reimbursed for expenses, including travel expenses, necessary for the performance of their duties.

     (c)  The film industry branch [development] manager shall serve as the executive secretary of the board.

     (d)  The board may adopt rules pursuant to chapter 91 to effectuate the purposes of this part.

     [[]§201-113[]]  Hawaii [television and] film and digital media development special fund.  (a)  There is established in the state treasury the Hawaii [television and] film and digital media development special fund into which shall be deposited:

     (1)  Appropriations by the legislature;

     (2)  Donations and contributions made by private individuals or organizations for deposit into the fund;

     (3)  Grants provided by governmental agencies or any other source; and

     (4)  Any [profits or] other amounts received from [venture capital investments.] international or national funding sources.

     (b)  The fund shall be used [by the board] to assist in, and provide incentives for, the production of eligible Hawaii projects that are in compliance with criteria and standards established by the board in accordance with rules adopted by the board pursuant to chapter 91.  In particular, the board shall adopt rules to provide for the implementation of [the following programs:] a grant program.

    [(1)  A grant program.  The board shall adopt rules pursuant to chapter 91 to provide conditions and qualifications for grants.]  Applications for grants shall be made to the board and shall contain such information as the board shall require [by rules adopted pursuant to chapter 91].  At a minimum, the applicant shall agree to the following conditions:

          [(A)] (1)  The grant shall be used exclusively for eligible Hawaii projects;

          [(B)] (2)  The applicant shall have applied for or received all applicable licenses and permits;

          [(C)] (3)  The applicant shall comply with applicable federal and state laws prohibiting discrimination against any person on the basis of race, color, national origin, religion, creed, sex, age, or physical handicap;

          [(D)] (4)  The applicant shall comply with other requirements as the board may prescribe;

          [(E)] (5)  All activities undertaken with funds received shall comply with all applicable federal, state, and county statutes and ordinances;

          [(F)] (6)  The applicant shall indemnify and save harmless the State of Hawaii and its officers, agents, and employees from and against any and all claims arising out of or resulting from activities carried out or projects undertaken with funds provided hereunder, and procure sufficient insurance to provide this indemnification if requested to do so by the department;

          [(G)] (7)  The applicant shall make available to the board all records the applicant may have relating to the project, to allow the board to monitor the applicant's compliance with the purpose of this chapter; and

          [(H)] (8)  The applicant, to the satisfaction of the board, shall establish that sufficient funds are available for the completion of the project for the purpose for which the grant is awarded[; and

     (2)  A venture capital program.  The board shall adopt rules pursuant to chapter 91 to provide conditions and qualifications for venture capital investments in eligible Hawaii projects.  The program may include a written agreement between the borrower and the board, as the representative of the State, that as consideration for the venture capital investment made under this part, the borrower shall share any royalties, licenses, titles, rights, or any other monetary benefits that may accrue to the borrower pursuant to terms and conditions established by the board by rule pursuant to chapter 91.  Venture capital investments may be made on such terms and conditions as the board shall determine to be reasonable, appropriate, and consistent with the purposes and objectives of this part].

     [[]§201-114[]]  Inspection of premises and records.  The board shall have the right to inspect, at reasonable hours, the plant, physical facilities, equipment, premises, books, and records of any applicant in connection with the processing of a grant to the applicant."

     SECTION 2.  Section 201-3, Hawaii Revised Statutes, is amended to read as follows:

     "§201-3  Specific research and promotional functions of the department.  Without prejudice to its general functions and duties, the department of business, economic development, and tourism shall have specific functions in the following areas:

     (1)  Industrial development.  The department shall:

         (A)  Determine through technical and economic surveys the profit potential of new or expanded industrial undertakings;

         (B)  Develop through research projects and other means new and improved industrial products and processes;

         (C)  Promote studies and surveys to determine consumer preference as to design and quality and to determine the best methods of packaging, transporting, and marketing the State's industrial products;

         (D)  Disseminate information to assist the present industries of the State, to attract new industries to the State, and to encourage capital investment in present and new industries in the State;

         (E)  Assist associations of producers and distributors of industrial products to introduce these products to consumers; and

         (F)  Make grants or contracts as may be necessary or advisable to accomplish the foregoing;

     (2)  Land development.  The department shall:

         (A)  Encourage the most productive use of all land in the State in accordance with a general plan developed by the department;

         (B)  Encourage the improvement of land tenure practices on leased private lands;

         (C)  Promote an informational program directed to landowners, producers of agricultural and industrial commodities, and the general public regarding the most efficient and most productive use of the lands in the State; and

         (D)  Make grants or contracts as may be necessary or advisable to accomplish the foregoing;

     (3)  Credit development.  The department shall:

         (A)  Conduct a continuing study of agricultural and industrial credit needs;

         (B)  Encourage the development of additional private and public credit sources for agricultural and industrial enterprises;

         (C)  Promote an informational program to acquaint financial institutions with agricultural and industrial credit needs and the potential for agricultural and industrial expansion, and inform producers of agricultural and industrial products as to the manner in which to qualify for loans; and

         (D)  Make grants or contracts as may be necessary or advisable to accomplish the foregoing;

     (4)  Promotion.  The department shall:

         (A)  Disseminate information developed for or by the department pertaining to economic development to assist present industry in the State;

         (B)  Attract new industry and investments to the State; and

         (C)  Assist new and emerging industry with good growth potential or prospects in jobs, exports, and new products.

          The industrial and economic promotional activities of the department may include the use of literature, advertising, demonstrations, displays, market testing, lectures, travel, motion picture and slide films, and other promotional and publicity devices as may be appropriate; and

     (5)  Self-sufficiency standard.  The department shall establish and update biennially a self-sufficiency standard that shall incorporate existing methods of calculation, and shall reflect, at a minimum, costs relating to housing, food, child care, transportation, health care, clothing and household expenses, federal and state tax obligations, family size, children's ages, geography, and the number of household wage earners.  The department shall report to the legislature concerning the self-sufficiency standard no later than twenty days prior to the convening of the regular session of 2009, and every odd-numbered year thereafter.  The recommendations shall address, among other things, the use of any federal funding that may be available for the purposes of establishing and updating the self-sufficiency standard.

     The department shall be the central agency to coordinate film and digital media permit activities in the State."

     SECTION 3.  Section 201-14, Hawaii Revised Statutes, is amended as follows:

     1.  By amending the title to read:

     "§201-14  Consolidated film and digital media permit processing."

     2.  By amending subsection (d) to read:

     "(d)  The department may approve and issue a permit to [film] visually record at any of the sites identified by the appropriate state or county agency under subsection (a).  If any site requested for use by the applicant is not identified under subsection (a), the department shall consult with the appropriate state or county agency having jurisdiction over the site to obtain a permit.  If the matter of a permit cannot be resolved in this manner, the department shall refer the application to the appropriate state or county agency to obtain a permit."

     3.  By amending subsection (h) to read:

     (h)  A vessel engaged in temporary use for film and digital media production purposes in accordance with a [film] permit issued by the department shall not be considered to be a "commercial vessel" within the meaning of section 200-9, 200-10, or 200-39; provided that:

     (1)  The period of temporary use does not exceed fourteen hours per day, five days per week, excluding weekends, and for a period not to exceed thirty calendar days; and

     (2)  The department may make allowances to include weekends for film and digital media production purposes due to inclement weather conditions during the weekday period."

     SECTION 4.  Statutory material to be repealed is bracketed and stricken.  New statutory material is underscored.

     SECTION 5.  This Act shall take effect on July 1, 2012.

 

INTRODUCED BY:	_____________________________

 

 

Report Title:

Hawaii Film and Digital Media Development

 

Description:

Amends chapter 201, part IX, Hawaii Revised Statutes, to change all references to Hawaii television and film development to Hawaii film and digital media development; deletes the venture capital program; increases the Hawaii film and digital media development board from nine to eleven members; authorizes moneys received from international and national sources to be deposited into the Hawaii film and digital media development special fund; makes additional conforming amendments.

 

 

 

The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.