The state is preparing to hand out millions of dollars in tax credits to encourage production companies to film in Hawai'i. However, a list of applicants for the credits shows that several are projects that probably would have filmed here anyway.

When adopting the new credits, which took effect July 1, lawmakers said they were needed to attract film and television productions to Hawai'i and compete effectively against other states that offer similar incentives, such as New Mexico and Louisiana.

Following a state information request from The Advertiser, the Hawai'i Film Office released the names of the 12 productions that have applied for up to $12 million in tax credits, and at least four are projects with strong Hawai'i connections.

They include two commercials being shot for the state to market Hawai'i as a tourist destination, one commercial for Hawaiian Telcom and a feature-length movie about the Trans-pacific Yacht Race from Los Angeles to Honolulu.

When asked if the tax credit was needed to bring these productions to Hawai'i, state Film Commissioner Donne Dawson said, "I don't think it's as black and white as these guys would have done this anyway and now they're getting tax credits."

Dawson said it's not clear the commercials would have gone forward or spent as much money in the absence of the credits. In addition, it would be difficult, if not impossible, to create a tax credit that could only be claimed by projects that would not have otherwise come to Hawai'i, she said.

Two of the projects that applied for credits are being funded with state tax revenues. These were commercials for Hawaii Tourism Japan and the Hawai'i Visitors & Convention Bureau. Both are subcontractors to the Hawai'i Tourism Authority, the state's tourism marketing agency.

When Rex Johnson, president and chief executive for the HTA, learned from The Advertiser last week that two subcontractors had applied for the film tax credits, he asked them to void the applications.

"These types of things (film credits) are meant to stimulate productions to come here to Hawai'i, and they would have done those things here anyway," Johnson said. "We shouldn't be funding our stuff with general fund money."

The Hawai'i Tourism Authority is funded via a state tax on hotel rooms.

Among other productions seeking state income tax credits were those involved with ABC's hit TV show "Lost" and MTV Networks' "Living Lahaina" and "Island Fever."

The 12 productions planned to spend a total of $79.5 million on expenses that qualify for the tax credits and hire 774 residents and 316 nonresidents, according to reports filed with the film office. If all that money were spent on O'ahu, the amount of tax credits available would be $12 million.

Dawson said the credits were crucial in attracting the two MTV productions.

"MTV has indicated to us that their decision to come here had everything to do with the tax credit," she said.

Officials for MTV did not return a call seeking comment.

CREDITS DEFENDED

In addition to attracting some productions, Dawson added that the cost of the credits is more than offset by the economic activity and publicity for the state that are generated.

"Rather than focus on what the cost of these incentives will be, it's the dollars that are spent and pumped through our economy that say everything about the effectiveness of these credits," Dawson said.

Lawmakers increased the state's 4 percent production tax credit on July 1 to 15 percent on O'ahu and 20 percent on the Neighbor Islands.

The credits are available to commercial projects with budgets of $200,000 or more, and the amount of credit is capped at $8 million per production.

Movie and TV productions spend about $100 million in Hawai'i annually and create about 3,500 jobs, though many are only temporary.

Dawson denied an Advertiser request in September to release the names of productions applying for the new credits. At the time, she said disclosing the names and other information might discourage companies from filming in the state or discourage them from sharing accurate information with the state.

The Advertiser appealed that decision, and in December the Office of Information Practices, which administers the state's open-records law, ruled that the names must be released.

The film office disclosed the identities of 12 productions last week but kept financial data for individual projects confidential.

FIRST DISCLOSURE

This marks the first time the state has been forced to disclose the identities of productions benefiting from state tax breaks. However, the Office of Information Practices' ruling does not require the disclosure of the identities of companies that claimed production tax credits before July 1 of last year.

Six of the 12 projects seeking credits were commercials or advertising-related projects. However, the bulk of the nearly $80 million in projected spending that qualifies for credits involves TV and film productions, Dawson said.

Through Dec. 6, only one feature-length film sought to take advantage of the new credits. That film, "Morning Light," will be distributed in 2008 by Walt Disney Co. and features the 2007 Transpacific Yacht Race.

Rich Roberts, a spokesman for the producer of "Morning Light," said it was inevitable that portions of the film, created by Roy Disney, would be filmed locally. The race concludes in the waters off O'ahu, after which boats are greeted with celebrations at local harbors.

The film will provide positive exposure for Hawai'i, Roberts added.

"Absolutely," he said. "I don't know if there's any other race that ends like that where you get a sense of aloha."

State film officials hope the credits eventually will draw more major motion picture productions to Hawai'i.

"We have not yet had the full opportunity to market this tax credit," Dawson said. "So the word is still getting out there that we've got this credit."

Reach Sean Hao at shao@honoluluadvertiser.com.