As the major proponent of Act 88, the Hawai'i Film and Entertainment Board would like to provide a perspective and important information missing from the Jan. 16 article written by Sean Hao.

Act 88 was written to encourage the growth of an industry while providing significant economic development in the state. The legislation carefully balances tax credit expenses and tax revenues generated by the film industry so that the state spends virtually no money on this credit while enabling Hawai'i to be globally competitive.

The film industry is a clean industry, highly sought-after around the world because it creates meaningful jobs and by its nature, infuses the economy with broad-based spending across a wide spectrum of businesses ("Lost" used nearly 1,000 different vendors in its first two seasons), and it provides Hawai'i with invaluable worldwide exposure.

Omitted from the article are the tax revenues generated by in-state film industry spending, 13 cents of every production dollar spent, which offsets the expense of the credit. A 15 percent tax credit minus the 13 percent tax revenue collected means, using the preliminary figures quoted in the article, that it costs the state $1.6 million in tax credits to spur on $79.5 million in economic activity. UH economist Dr. William Boyd calculates that the difference is not "statistically different from zero."

Act 88 is fiscally responsible legislation because it pays only on actual dollars spent, limits the amount a production can receive and, because it is a more cost-effective incentive than we have had and has strict guidelines that address the issue of double-dipping, it is estimated to save the state $5 million annually.

Act 88 is fiscally responsible legislation, passed by knowledgeable decisionmakers and leaders who have a deep understanding of the complex business of film, its benefits to the state and what is needed to grow the industry.

A large part of our local industry has been in the business for 20 to 30 years. This depth of knowledge is what the law is intended to harness, expand and build upon to take our industry from a cyclical to a sustainable one that allows local filmmakers to thrive.

To accomplish this, an incentive equally accessible to local and non-local filmmakers is critical. Both sectors should grow side-by-side to foster the dynamic synergy that leads to exchange of resources and development of infrastructure. In the six months since Act 88 took effect on July 1, 2006, we have seen this dynamic interchange begin. Local and non-local projects that prior to Act 88 could not be made in Hawai'i because of costs or that normally would have sought ways to minimize their Hawai'i expenses, started seeking ways to spend more here. The end result is more projects filming, more days of shooting, more people hired for longer, more money spent on resources in the state instead of out-of-state and more focus on working with local business resources traditionally done off-island, such as post production.

Act 88 cost-effectively drives workforce development and provides the necessary tools to aggressively compete globally. By design, it fosters the development of our local film industry.

A critical mass of production is essential to make it cost-effective for private industry to invest in developing Hawai'i's film industry infrastructure. Volume and throughput in the production pipeline are what's needed. In our record production year of 2004 we began to see the dynamic effect critical mass can have. We saw the foundation of our industry spread, former Hawai'i industry residents returned home to gainful employment, and we began to train a whole new generation of filmmakers. We also saw this quickly evaporate when the promise of a broad-based incentive did not pan out.

What we have seen in the first days of Act 88 is a renewed interest in the building blocks of the future of the industry. Studio developers are in active discussion, training courses are full and the likes of NBC, Disney and HBO have us on their radar screens. Hawai'i was selected as one of the Top 10 filming destinations in the country in September, and we have had the chance to bid for projects that would have bypassed us without consideration. In other words, we're back in the game. And perhaps most significant of all, local filmmakers are not excluded and have a viable avenue to begin to tell our stories.

Brenda Ching is chairwoman of the Hawai'i Film and Entertainment Board and executive director, Screen Actors Guild, Hawai'i Branch. She wrote this commentary for The Advertiser.