HOUSE OF REPRESENTATIVES
TWENTY-SEVENTH LEGISLATURE, 2013
STATE OF HAWAII
A BILL FOR AN ACT
RELATING TO ECONOMIC DEVELOPMENT.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
SECTION 1. Act 240, Session Laws of Hawaii 2012, is amended by amending section 8 to read as follows:
"SECTION 8. This Act shall take effect
upon its approval; provided that section 6 shall take effect on June 30, [
SECTION 2. Section 206M-52, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:
"(a) The affairs of the high technology innovation
corporation shall be under the general management and control of a board of
directors consisting of [
nine] seven ex officio, voting members.
[ Four members of the board of directors of the high technology development
corporation shall be ex officio, voting members of the high technology
innovation corporation's board and shall be selected by the high technology
development corporation's board of directors for terms to be determined by the
high technology development corporation's board. The executive director and
chief executive officer of the high technology development corporation shall
serve as an ex officio, nonvoting member of the high technology innovation
corporation board. The remaining four members shall be appointed by the
governor from lists of nominees provided by the president of the senate and the
speaker of the house of representatives. The governor shall appoint two
persons from the list submitted by the president of the senate and two persons
from the list submitted by the speaker of the house of representatives. The
lists of nominees provided by the president of the senate and the speaker of
the house of representatives shall consist of members of the general public
selected on the basis of their knowledge, interest, and proven expertise in,
but not limited to, one or more of the following fields: finance, commerce and
trade, corporate management, marketing, economics, engineering, information
technology and telecommunications, life sciences, and other high technology
fields. All the members appointed from the general public shall serve for a
term of four years, except that half of those initially appointed from the
public may have reduced terms in accordance with section 26-34, so as to
provide, as nearly as can be, for the expiration of an equal number of terms at
intervals of one year, with each term commencing on July 1 and expiring on June
30.] The members of the board shall be as follows:
(1) The executive director and chief executive officer of the high technology development corporation;
(2) The state film commissioner of the Hawaii film office;
(3) The president of the Hawaii strategic development corporation;
(4) The executive director of the natural energy laboratory of Hawaii authority;
(5) The executive director of the agribusiness development corporation;
(6) The executive director of the Hawaii housing finance development corporation; and
(7) The energy administrator of the Hawaii state energy office."
SECTION 3. Chapter 394, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:
"§394- Workforce development training program. (a) The department of labor and industrial relations shall administer a workforce development training program that provides wage reimbursement for on-the-job training to persons who are newly hired by motion picture, digital media, television, and film production entities that are prequalified by the department of business, economic development, and tourism to receive a tax credit as described in section 235-17(f). These prequalified entities shall be eligible for a fifty per cent reimbursement of wages, not to exceed a maximum duration of one thousand forty hours per employee who receive on-the-job training, is newly hired in a job paying at least thirty-two hours per week. Wages, fringe benefits, and other benefits paid to the new hire shall be the same or comparable to others similarly employed by that entity. The entity shall not be reimbursed for fringe and other benefits. The new hire shall be guaranteed full-time employment of a minimum of thirty-two hours per week with the entity upon successful completion of the training period or upon the termination of the motion picture, digital media, television, or film production.
(b) The director may adopt rules pursuant to chapter 91 to carry out the purposes of this section."
SECTION 4. Section 235-17, Hawaii Revised Statutes, is amended as follows:
1. By amending subsection (h) to read:
"(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, identifying:
(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 [
(i.e., department)] and by county."
2. By amending subsection (l) to read:
"(l) For the purposes of this section:
(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"] "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.] post-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 series pilot, single season (up to twenty-two episodes) of a television series regularly filmed in the State (if the number of episodes per single season exceeds twenty-two, additional episodes for the same season shall constitute a separate qualified production), television special, single television episode that is not part of a television series regularly filmed or based in the State, national magazine show, or national talk show. For the purposes of subsections (d) and (j), each of the aforementioned qualified production categories shall constitute separate, individual qualified productions; and
(2) Does not include: [
daily news ;
(B) Public affairs programs; [
(C) Non-national magazine or
talk shows; [
(D) Televised sporting events or
(E) Productions that solicit
(F) Productions produced
primarily for industrial, corporate, institutional, or other private purposes;
(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 or income tax under this chapter 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[
;], but excluding state and
county facility and location fees that are not subject to the 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."
SECTION 5. Act 88, Session Laws of Hawaii 2006, 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, [
2016;] 2025; and
(2) This Act shall be repealed on January 1,
2016,] 2025, 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 6. The department of business, economic development, and tourism shall submit an annual report to the legislature twenty days prior to each regular session beginning with the 2014 regular session. The report shall contain a cost benefit analysis of the motion picture, digital media, and film production income tax credit, including but not limited to the following:
(1) The total number of full-time, part-time, and contract personnel on the payroll necessary to administer the film production tax credit; and
(2) The average wage of each of the above personnel groups and total earnings for the year.
The department of business, economic development, and tourism shall report the data collected under this section along with a cumulative total of tax credits granted for each qualified production. The legislature may use the information to determine whether the tax credits are meeting the objectives of the motion picture, digital media, and film production tax credit and this part.
SECTION 7. 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 2013-2014 and the same sum or so much thereof as may be necessary for fiscal year 2014-2015 for the implementation of the workforce development training program established by this part.
The sums appropriated shall be expended by the department of labor and industrial relations for the purposes of this part.
SECTION 8. The Hawaii Revised Statutes is amended by adding a new chapter to be appropriately designated and to read as follows:
PUblic-private partnership authority
§ -1 Findings and purpose. The legislature finds that these are difficult economic times for all levels of government, as public service demands for an increasing population put pressure on revenue resources. The State faces the challenge of balancing a budget while addressing escalating infrastructure and service needs. Due to insufficient funding and postponed maintenance, the daily demands continue to increase.
Governments around the world have been engaging in public-private partnerships to address these economic challenges. State agencies are hamstrung by their limited missions and dwindling resources. Creating a partnership agency to collaborate with all state agencies and private sector entities may help to deliver services and facilities more effectively.
The purpose of this chapter is to create a vehicle and process to use the skills and assets of both the public and private sectors to deliver services and facilities for the economic, environmental, and social benefit of the people of Hawaii. This chapter establishes the public-private partnership authority to administer appropriate and culturally-sensitive projects. The authority shall coordinate and administer projects, while ensuring that resources are maintained for the people of Hawaii. The authority shall identify projects that are suitable under this chapter, carry out appropriate analyses, enter into public-private agreements, and provide leadership for the facilitation of financing, improvement, or enhancement of appropriate facilities, operations, and property.
§ -2 Definitions. As used in this chapter, unless the context clearly requires otherwise:
"Authority" means the public-private partnership authority.
"Board" means the board of directors of the public-private partnership authority.
"Cooperative agreement" means an instrument, such as a contract, compact, memorandum of understanding, or agreement, that is signed and binding upon all parties to the agreement.
"Management rights" means the authority to control and manage projects.
"Project" means a specific undertaking related to the operations and properties of any public agency, including and not limited to:
(1) Development of plans for a public agency; and
(2) Planning, improvement, construction, rehabilitation, alteration, maintenance, or repair of real property or energy generation.
"Qualified person" means any individual, partnership, corporation, not-for-profit organization, or public agency possessing the competence, expertise, experience, and resources, including financial, personnel, and tangible qualifications, as deemed desirable by the authority.
§ -3 Public-private partnership authority; established. (a) There is established the public-private partnership authority, which shall be a public body corporate and politic and an instrumentality and agency of the State. The authority shall be headed by a board of directors. The authority shall be placed within the department of business, economic development, and tourism for administrative purposes.
The authority shall:
(1) Identify projects that are suitable under this chapter;
(2) Conduct analyses, as appropriate;
(3) Enter into public-private partnership agreements, as appropriate; and
(4) Provide the leadership for public-private partnership projects.
(b) The board of directors of the public-private partnership authority shall consist of five voting members and one ex officio, non-voting member. The voting members shall include:
(1) The comptroller, or the first deputy to the comptroller;
(2) The director of finance;
(3) The director of business, economic development, and tourism;
(4) One member to be appointed by the speaker of the house of representatives; and
(5) One member to be appointed by the president of the senate.
The ex officio, non-voting member shall be the aha moku advisory committee member of the moku in which the project is sited.
The members appointed by the speaker of the house of representatives and the president of the senate shall possess sufficient knowledge, experience, and proven expertise in small and large businesses within the development or recreation industries, banking, real estate, finance, promotion, marketing, or management.
The term of office of the members appointed by the speaker of the house of representatives and the president of the senate shall be four years each.
(c) The board shall appoint an executive director, who shall serve at the pleasure of the board and shall be exempt from chapter 76. The salary of the executive director shall be set by the board.
(d) The board, through its executive director, may appoint officers, agents, and employees; prescribe their duties and qualifications; and fix their salaries, without regard to chapter 76.
§ -4 Powers; generally. Except as otherwise limited by this chapter, the authority may:
(1) Sue and be sued;
(2) Have a seal and alter the same at its pleasure;
(3) Make and alter bylaws for its organization and internal management;
(4) Adopt rules under chapter 91 necessary to implement this chapter in connection with its projects;
(5) Make and execute contracts and all other instruments necessary or convenient for the exercise of its powers and functions under this chapter;
(6) Manage projects by itself or in partnership with qualified persons or other governmental agencies;
(7) Receive, examine, and determine the acceptability of applications of qualified persons for public-private partnerships;
(8) Coordinate its activities with any federal or state programs;
(9) Provide advisory, consultative, training, and educational services and technical assistance to any person, partnership, or corporation, either public or private, to carry out the purposes of this chapter, and engage the services of consultants on a contractual basis for rendering professional and technical assistance and advice;
(10) Procure insurance against any loss in connection with its property and other assets and operations in amounts and from insurers as it deems desirable;
(11) Accept gifts or grants in any form from any public agency or any other source;
(12) Coordinate with any public agency;
(13) Recommend to the appropriate public agency the acquisition of any privately owned real or personal property that may be appropriate for the purposes of this chapter; and
(14) Do all things necessary or proper to carry out the purposes of this chapter.
§ -5 Projects and plans. (a) The authority may develop plans and implement projects on behalf of public agencies, as appropriate.
(b) The authority may enter into a cooperative agreement with any public agency to implement projects on behalf of the public agency.
(c) The authority may enter into cooperative agreements with persons or public agencies when the powers, services, and capabilities of the persons or agencies are deemed necessary and appropriate.
(d) Prior to implementing any project, the authority shall submit the proposed plan for the project, together with any amendments, to and obtain the prior approval of the board and any executive of an affected public agency.
§ -6 Approval of projects. All projects to be developed by the authority shall be approved by the board and any executive of an affected public agency.
§ -7 Transfer of management rights. (a) Notwithstanding chapter 171 or any provision of this chapter to the contrary, any public agency may transfer, subject to the approval of the board or executive of the public agency, management rights for projects under its jurisdiction to the authority for purposes of this chapter.
(b) If the authority finds that projects under the control and management of any public agency are suitable for its purposes under this chapter, the authority may lease properties from or agree to manage the properties of the agency having jurisdiction, upon terms and conditions as agreed to by the parties.
(c) Notwithstanding subsection (b) to the contrary, no property shall be leased to the authority if the lease would impair any covenant between the State or any county, or any department or board thereof, and the holders of bonds issued by the State or the county, or any department or board thereof.
§ -8 Public-private partnership revenues. Any revenues generated from public-private partnership projects and plans developed pursuant to this chapter shall be deposited into the general fund.
§ -9 Exemption from taxation. The authority shall not be required to pay state taxes of any kind.
§ -10 Application of chapter. The authority and all projects implemented under this chapter shall comply with all state laws, other than the exemption from state taxes in § ‑9.
§ -11 Reports and evaluation. (a) The authority shall submit a complete and detailed annual report of its plans and activities as follows:
(1) To the governor no later than twenty days prior to the convening of each regular session; and
(2) To the legislature, no later than sixty days after the submission of the report as specified in paragraph (1).
(b) The board shall submit to the governor and the legislature, no later than twenty days prior to the convening of each regular session, an evaluation of the executive director appointed pursuant to section -3."
SECTION 9. After the adoption of rules pursuant to section -4(a)(4), Hawaii Revised Statutes, the public-private partnership authority shall initiate pilot projects pursuant to chapter , Hawaii Revised Statutes, as follows:
(1) A film production facility on state lands on the most populous island of a county with a population between one hundred thousand and one hundred seventy-five thousand;
(2) A main-street project on state lands in Wahiawa, city and county of Honolulu; and
(3) One county initiated project.
SECTION 10. The public-private partnership authority shall include in its annual report to the governor and the legislature required by section -11, Hawaii Revised Statutes, a detailed report on the status of each pilot project.
The public-private partnership authority shall notify the governor and the legislature upon the completion of each pilot project and, within ninety days of each pilot project's completion, submit a report to the governor and the legislature containing a review and evaluation of each pilot project and any recommendations to improve the effectiveness of chapter , Hawaii Revised Statutes.
SECTION 11. The public-private partnership authority shall neither plan nor implement any projects other than the pilot projects nor enter into any agreements or contracts related to the planning or implementation of any projects other than the pilot projects identified in this part.
SECTION 12. 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 2013-2014 and the same sum or so much thereof as may be necessary for fiscal year 2014-2015 for:
(1) The establishment and operation of the public-private partnership authority pursuant to section 8 of this Act; and
(2) The funding of staff positions.
The sums appropriated shall be expended by the department of business, economic development, and tourism for the purposes of this part.
SECTION 13. If any provision of this Act, or the application thereof to any person or circumstance, is held invalid, the invalidity does not affect other provisions or applications of the Act that can be given effect without the invalid provision or application, and to this end the provisions of this Act are severable.
SECTION 14. This Act does not affect rights and duties that matured, penalties that were incurred, and proceedings that were begun before its effective date.
SECTION 15. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.
SECTION 16. This Act shall take effect upon its approval; provided that:
(1) Section 1 shall take effect on June 29, 2013;
(2) Section 7 shall take effect on July 1, 2013;
(3) Part II of this Act shall apply to taxable years beginning after December 31, 2012, and before January 1, 2025; and
(4) Part III of this Act shall take effect on July 1, 2013, and shall be repealed on July 1, 2018.
High Technology Innovation Corporation (HTIC); HTIC Board of Directors; Public-private Partnership Authority; Pilot Project; Creative Media Development; Tax Credit; Workforce Development Training Program; Appropriation
Part I extends the sunset date of the HTIC from 2013 to 2018 and changes the composition of the HTIC's board of directors. Part II establishes a workforce development training program that provides wage reimbursement for on-the-job training by entities who receive a motion picture, digital media, and film production tax credit; deletes internet-only distribution exclusion for advertising; clarifies definitions of qualified production costs; extends the sunset date of the tax credit to January 1, 2025; and appropriates funds for the training program. Part III establishes the public-private partnership authority (PPPA); requires the PPPA to initiate pilot projects; appropriates an unspecified sum for the PPPA; and repeals 07/01/2018. (Proposed SD1)
The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.