Bill Text: HI SB3049 | 2024 | Regular Session | Introduced
Bill Title: Relating To The Film Industry.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced - Dead) 2024-01-26 - Referred to EET, WAM. [SB3049 Detail]
Download: Hawaii-2024-SB3049-Introduced.html
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THE SENATE |
S.B. NO. |
3049 |
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THIRTY-SECOND LEGISLATURE, 2024 |
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STATE OF HAWAII |
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A BILL FOR AN ACT
RELATING TO THE FILM INDUSTRY.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
SECTION 1. Chapter 201, Hawaii Revised Statutes, is amended by adding to part IX a new section to be appropriately designated and to read as follows:
"§201-
Hawai`i film advisory council; established. (a) There is established within the
department of business, economic development, and tourism for administrative
purposes only a Hawai`i film advisory council. The council shall consist of thirteen members
who shall be appointed by the governor, in the manner prescribed in section 26-34, except
as otherwise provided in this section; and shall be composed of:
(1) Five members who
are employees from each of the four county film offices in
the State and the department's state film office;
(2) Seven members who are employed by or
serve in leadership positions of organizations or businesses from the Hawai`i Film and Entertainment Board, film industry labor unions,
film industry guilds, higher education in film and media, entrepreneurs in media,
native Hawaiian cultural organizations, or New Zealand film industry organizations that have experience in one or more of the following fields:
(A) Film and television production;
(B) Film commission management;
(C) Investment and tax credits;
(D) Film production finance and accounting;
(E) Post-production;
(F) Entertainment industry labor union leadership;
(G) Hawaii film production organization and non-profit film production organization;
(H) Workforce and skills development training organization; or
(I) Commercial real estate and development.
(3) The director of business, economic development, and tourism, or the director's
designee, who shall serve as an ex officio, voting member of the council.
(b) The council shall advise the department, make recommendations,
and provide industry insights to increase business development, workforce, jobs,
and infrastructure in the film industry statewide. The council shall also provide the department with input on setting strategic
priorities to accelerate the growth of the film industry.
(d) The council shall appoint a chair,
and other leadership positions as deemed necessary.
(e) The council shall make recommendations to the department on the appointment of a film industry
development liaison."
SECTION 2. Chapter 237, Hawaii Revised Statutes, is amended by adding a new section to be appropriately
designated and to read as follows:
"§237- Exemption for certified development of film
studio facilities. (a) Any provision of law to the contrary notwithstanding,
and upon receipt of the certification required by subsection (b), there shall be
exempted from, and excluded from the measure of, the taxes imposed by this chapter,
the gross proceeds of a qualified person arising from the planning, design, construction,
or retrofitting of film studio infrastructure in the State.
(b) Application for the exemption provided by this
section shall first be made to the department of business, economic development,
and tourism, who shall certify that the qualified person meets the
requirements in this section.
(c) As used in this section:
"Film
studio infrastructure" means:
(1) New or retrofit construction of structures in the State to accommodate soundstages for the production needs of the film industry;
(2) Permanent space primarily used for production,
including:
(A) Actors, on‑screen personnel, producers, directors, writers, and related support staff spaces;
(B) Catering facilities;
(C) Laundry facilities;
(D) Post-Production spaces, including editing suites, screening rooms, and control rooms;
(3) Facilities that are used for production purposes, which may include:
(A) Set design, build, construction, and
painting;
(B) Costume fabrication and related areas
for construction;
(C) Dining and food prep;
(D) Office accommodations for all production
personnel and departments;
(E) Prop, picture car, and other vehicle
parking, and related storage;
(F) Sustainable alternative energy source
where applicable;
(G) Facilities equipped with private
network fiber connectivity; and
(H) Security infrastructure.
"Production"
has the same meaning as in section 235-17(o).
"Post-production"
has the same meaning as in section 235-17(o).
"Qualified
person" means an individual, partnership, joint venture, corporation, association,
limited liability partnership, limited liability company, business, trust, or any
organized group of persons or legal entities, or any combination thereof, that possesses all professional or vocational licenses necessary to
do business in the State in conjunction with the planning, design, construction,
or retrofitting of film studio infrastructure.
(d) The department of business, economic development,
and tourism and the department of taxation may adopt
rules pursuant to chapter 91 for the purpose of this section.
(e) This section shall not apply to gross proceeds received after December 31, 2034."
SECTION 3. Section 235-17, Hawaii Revised Statutes, is amended by amending subsection (h) to read as follows:
"(h)
Every taxpayer claiming a tax credit under this section for a qualified production
shall, no later than ninety days following the end of each taxable year in which
qualified production costs were expended, submit a written, sworn statement to the
department of business, economic development, and tourism that identifies:
(1) All
qualified production costs as provided by subsection (a), if any, incurred in the
previous taxable year;
(2) The
amount of tax credits claimed pursuant to this section, if any, in the previous
taxable year; and
(3) The
number of total hires versus the number of local hires by category and by county.
If the qualified
production costs of a taxpayer exceed $1,000,000 in a taxable year,
the written, sworn statement shall be accompanied by an independent third party
certification, performed by a qualified certified public accountant, that verifies
all representations made for the purpose of claiming the credit under this section. The certification shall be prepared and submitted
in accordance with standards and procedures prescribed
by the department of business, economic development, and tourism and the department
of taxation. This information may be reported from the department
of business, economic development, and tourism to the legislature pursuant to subsection
(i)(4)."
SECTION 4. Section 235-17, Hawaii Revised Statutes, is amended by amending subsection (n) to read as follows:
"(n) The total amount of tax credits allowed under
this section
in any particular year shall be [$50,000,000;] $60,000,000; however,
if the total amount of credits applied for in any particular year exceeds the aggregate
amount of credits allowed for that year under this section, the excess shall be
treated as having been applied for in the subsequent year and shall be claimed in
the subsequent year; provided that no excess shall be allowed to be claimed after
December 31, [2032.] 2038."
SECTION 5. Section 235-17, Hawaii Revised Statutes, is amended
by amending subsection
(o) to read as follows:
"(o)
For the purposes of this section:
"Commercial":
(1) Means
an advertising message that is filmed using film, videotape, or digital media, for
dissemination via television broadcast or theatrical distribution;
(2) Includes
a series of advertising messages if all parts are produced at the same time over
the course of six consecutive weeks; and
(3) Does
not include an advertising message with Internet-only distribution.
"Digital media" means production methods
and platforms directly related to the creation of cinematic imagery and content,
specifically using digital means, including but not limited to digital cameras,
digital sound equipment, and computers, to be delivered via film, videotape, interactive
game platform, or other digital distribution media.
"Post-production" means production
activities and services conducted after principal photography is completed, including
but not limited to editing, film and video transfers, duplication, transcoding,
dubbing, subtitling, credits, closed captioning, audio production, special effects
(visual and sound), graphics, and animation.
"Production" means a series of activities
that are directly related to the creation of visual and cinematic imagery to be
delivered via film, videotape, or digital media and to be sold, distributed, or
displayed as entertainment or the advertisement of products for mass public consumption,
including but not limited to scripting, casting, set design and construction, transportation,
videography, photography, sound recording, interactive game design, and post-production.
"Qualified production":
(1) Means
a production, with expenditures in the State, for the total or partial production
of a feature-length motion picture, short film, made-for-television movie, commercial,
music video, interactive game, television (inclusive of broadcast and streaming
platforms) series pilot, single season (up to twenty-two episodes[)]
for broadcast television; and up to eight episodes for an ongoing series for
streaming platforms) of a [television] series [regularly] filmed
in the State [(if]. If the
number of episodes per single season for a broadcast series exceeds twenty-two,
and if a streaming series exceeds eight episodes, additional episodes for
the same season shall constitute a separate qualified production[),]. A "qualified production"
also includes a
television or streaming platform special, single [television] episode
that is not part of a television or streaming platform series regularly filmed
or based in the State, national magazine show, [or] and national talk
show. For the purposes of subsections (d)
and (l), each of the aforementioned qualified production categories shall constitute
separate, individual qualified productions; and
(2) Does
not include:
(A) News;
(B) Public
affairs programs;
(C) Non-national
magazine or talk shows;
(D) Televised
sporting events or activities;
(E) Productions
that solicit funds;
(F) Productions
produced primarily for industrial, corporate, institutional, or other private purposes;
and
(G) Productions
that include any material or performance prohibited by chapter 712.
"Qualified production costs" means
the costs incurred by a qualified production within the State that are subject to
the general excise tax under chapter 237 at the highest rate of tax or income tax
under this chapter if the costs are not subject to general excise tax and that have
not been financed by any investments for which a credit was or will be claimed pursuant
to section 235-110.9. Qualified production
costs include but are not limited to:
(1) Costs
incurred during preproduction such as location scouting and related services;
(2) Costs
of set construction and operations, purchases or rentals of wardrobe, props, accessories,
food, office supplies, transportation, equipment, and related services;
(3) Wages
or salaries of cast, crew, and musicians;
(4) Costs
of photography, sound synchronization, lighting, and related services;
(5) Costs
of editing, visual effects, music, other post-production, and related services;
(6) Rentals
and fees for use of local facilities and locations, including rentals and fees for
use of state and county facilities and locations that are not subject to general
excise tax under chapter 237 or income tax under this chapter;
(7) Rentals
of vehicles and lodging for cast and crew;
(8) Airfare
for flights to or from Hawaii, and interisland flights;
(9) Insurance
and bonding;
(10) Shipping
of equipment and supplies to or from Hawaii, and interisland shipments;
and
(11) Other
direct production costs specified by the department in consultation with the department
of business, economic development, and tourism;
provided
that any government-imposed fines, penalties, or interest that are incurred by a
qualified production within the State shall not be "qualified production costs". "Qualified production costs" does not
include any costs funded by any grant, forgivable loan, or other amounts not included
in gross income for purposes of this chapter.
"Streaming
platform" means an online provider of media content that delivers
the content via internet connection to
the subscriber's computer, television, or mobile device through a paid subscription."
SECTION 6.
Act 88, Session Laws of Hawaii 2006, as amended by section 3 of Act 89, Session
Laws of Hawaii 2013, as amended by section 3 of Act 143, Session Laws of Hawaii
2017, as amended by section 4 of Act 217, Session Laws of Hawaii 2022 is amended
by amending section 4 to read as follows:
"SECTION 4. This Act shall take effect on July 1, 2006; provided
that:
(1) Section
2 of this Act shall apply to qualified production costs incurred on or after July
1, 2006, and before January 1, [2033;] 2039; and
(2) This Act shall be repealed on January 1,
[2033,] 2039, 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."
SECTION 7.
Act 143, Session Laws of Hawaii 2017, is amended by amending section 6 to
read as follows:
"SECTION 6. [No later than January 1, 2018, and each January
1 thereafter, each film production that has production expenditures of $1,000,000
or more and is claiming a tax credit pursuant to section 235-17, Hawaii Revised
Statutes, shall obtain an independent third party certification of qualified production
costs eligible for the motion picture, digital media, and film production income
tax credit in the form of a tax opinion, as required under section 235-17(h), Hawaii
Revised Statutes, submitted to the department of business, economic development,
and tourism.] Repealed."
SECTION 8. The
department of business, economic development, and tourism shall establish one full-time
equivalent (1.0 FTE) permanent film industry development liaison
position to oversee development of the film industry, exempt from chapter 76.
SECTION 9. There is appropriated out of
the general revenues of the State of Hawaii the sum of $130,000 or
so much thereof as may be necessary for fiscal year 2024-2025
for the position established by this Act and associated
administrative costs.
The sum appropriated shall
be expended by the department of business, economic development, and tourism for
the purposes of this Act.
SECTION 10.
Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.
SECTION 11. This Act, upon its approval, shall take effect on January 1, 2025; provided that sections 1, 2, 8, and 9 shall take effect on July 1, 2024; provided further that sections 2 through 7 shall apply to expenditures made after December 31, 2024.
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INTRODUCED BY: |
_____________________________ |
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BY REQUEST |
Report Title:
DBEDT; Motion Picture, Digital Media, and Film Production Income Tax Credit; Hawai`i Film Advisory Council; General Excise Tax Exemption; Civil Service Exemption.
Description:
Establishes a Hawai`i Film Advisory Council within the Department of Business, Economic Development, and Tourism. Provides exemption for certified development of film studio facilities from taxes imposed under chapter 237, HRS. Amends the Motion Picture, Digital Media, and Film Production Income Tax Credit allowed under section 235-17, HRS, to (1) clarify and amend the requirement for an independent third-party certification, (2) increase the annual credit cap to $60,000,000 from $50,000,000, (3) extend the sunset date to January 1, 2039, and (4) expand the definition of "qualified production" to include streaming platforms. Establishes, exempt from chapter 76, and appropriates funds for the film industry liaison position.
The summary description
of legislation appearing on this page is for informational purposes only and is
not legislation or evidence of legislative intent.
