Legislature(2013 - 2014)BARNES 124
03/18/2013 03:15 PM House LABOR & COMMERCE
| Audio | Topic |
|---|---|
| Start | |
| HB76 | |
| SB23 | |
| HB112 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 76 | TELECONFERENCED | |
| += | HB 112 | TELECONFERENCED | |
| + | SB 23 | TELECONFERENCED | |
HB 112-REPEAL FILM PRODUCTION TAX CREDIT
4:31:07 PM
CHAIR OLSON announced that the final order of business would be
HOUSE BILL NO. 112 "An Act repealing the film production tax
credit; providing for an effective date by repealing the
effective dates of secs. 31 - 33, ch. 51, SLA 2012; and
providing for an effective date."
4:31:13 PM
DAVE HUNSAKER, Screenwriter, informed the committee he has lived
in Alaska for approximately 40 years and has worked as a screen
writer for 25 years, working between Juneau and Hollywood.
Prior to that, he worked as the Artistic Director of the Naa
Kahidi Theater and Perseverance Theatre. He offered his belief
that the film industry is just getting started and has generated
a lot of interest in Hollywood. He has a project, The
Firecracker Boys, which is based on Fairbanks writer Dan
O'Neill's book about Project Chariot. This project is funded
and ready to go. He said Leonardo DiCaprio is the producer and
the director is Bronwen Hughes. He reported that the production
is in the process of casting and while the budget doesn't permit
the entire production to be in Alaska, some location shoots were
done in Alaska and location scouts have been hired. He related
the intention is to shoot 30 percent of the film here, which
would not be the case without the Alaska Film Production
Incentive Program credits. What has prevented more productions
from being filmed in Alaska is the lack of trained technical
crew, which is changing as more productions are filmed here. He
said that while a lot of money has been paid to people outside
Alaska thus far, the more projects that are filmed here the
bigger the base. He offered his belief that as more films are
filmed in Alaska, the filmmakers will discover the grandeur and
superior lighting in Alaska. Further, some things simply cannot
be found in other places. For example, there are not any good
Arctic locations in Canada that have the infrastructure film
crews need, noting, Canada is Alaska's huge competitor. Mr.
Hunsaker related that Canada has been aggressive. He stated
that people from the British Columbia Film office and the
Alberta office, which is where Alaska has been depicted, came to
Alaska with respect to filming Firecracker Boys. He predicted
that once people see the real Alaska it will make them more
prone to want to come to Alaska and anything shot here would be
good advertising for Alaska.
4:34:37 PM
PATRICIA HULL, Actor, Alaska Film Group, stated she moved to
Alaska in 1967 and has spent 31 cumulative winters in Alaska.
She said that she is representing the Alaska Film Group (AFG)
today. She works as a performing artist in music, theatre,
film, and television. The AFG is a nonprofit trade organization
for individuals and businesses that are involved in the film and
video industry in Alaska. The Alaska Film Group also encourages
workforce development so Alaskans can be hired into the well-
paying crew jobs. Additionally, the AFG has been active in the
development of infrastructure to support film production. She
offered her belief that Alaska is a really compelling place to
make films since it has dramatic locations and abundant summer
daylight. However, other places with beautiful locations, such
as New Mexico, Canada, and New Zealand, aggressively court the
film industry. She recalled that New Mexico even offers loans.
She turned to Canada, which in many ways is Alaska's twin. When
the Canadian dollar was strong it was really easy to keep films
in Alaska, but now that Alaska is 98 cents to the Canadian
dollar, Alaska is in a precarious balance point. She explained
that eliminating the Alaska Film Production Incentive Program
(AFPIP) at this point would have the effect of losing the
competitive advantage. Films that would normally come to Alaska
will instead go to Canada. In fact, she recalled hearing that a
film about the serum run in Nome will be shot in Canada. She
highlighted that a chilling effect has taken place due to the
risk of the incentive program being dismantled. Last year, the
10-year commitment was made it made people think big and long-
term and really start to put their irons in the fire, which has
changed with HB 112.
4:36:48 PM
MS. HULL pointed out that a number of enhancements were
scheduled to go into effect for the AFPIP, including cabinet
level review of projects to ensure the best interests of the
state and its residents are reflected in the films. Further, a
sliding scale application fee from $220 to $5,000 would be
implemented, based on the film budget's ground spend, she said.
Additionally, the incentive to hire Alaskan residents would be
increased from 10-20 percent, which means the film companies
will receive more tax credits if they hire more Alaskans, which
also would reduce non-resident funding. In fact, Alaskans are
trying to tweak the program to really make it work. In essence,
creative industries like film are the wave of the future. There
isn't any red tape, or any of the difficulties of other
industries, plus film companies leave things better than they
find them. In fact, one major production company needed a sound
stage and subsequently created a $6 million investment in the
sound stage. These types of investments are not reflected in
the incentive plan, but this sound studio is now part of
Alaska's infrastructure. She encouraged members to let the
wisdom of the 27th Alaska State Legislature move forward.
4:38:09 PM
RICHARD BENAVIDES, President, The International Alliance of
Theatrical Stage Employees - Local 918 (IATSE Local 918), stated
he is testifying in opposition to HB 112. He said the IATSE
Local 918 is the organization that represents both stage, film
and television technicians. However, IATSE also supports any
union or non-union person who works on films and is part of the
film community. The AFPIP has positively impacted IATSE. Over
the course of the program, over half of the IATSE Local 918 has
worked making good wages on several film or television projects,
such as Everybody Loves Whales, Frozen Ground, employing 160
members and 90 members, respectively. Additionally, the IATSE
Local 918 has been involved with the University of Alaska
Fairbanks (UAF) in training over 250 individuals in Fairbanks
and Anchorage. He said some activities conducted at studios to
train grip for films, which were streamed statewide so people
who could not attend in person could follow along via video,
which is still available for people to download. Additionally,
the IATSE Local 918 will offer courses this summer. In fact, a
student film will be made with UAF film students - assisted by
Alaskans already trained in film - to use technicians across the
state so students learn how to make a film from beginning to end
and learn all aspects of filmmaking, including technical and
acting. Referring to the Alaska Film Office's Report to the
legislature, Mr. Benavides highlighted the following bullet
points: "cooperate with organizations in the private sector for
the expansion and development of industry in the state; promote
Alaska as a location for production; provide production
assistance by connecting folks with Alaska contractors,
suppliers, and workers; and certify internship programs, and
promote the employment of interns by eligible people." He
suggested a person could insert "oil" or any industry in this
state into the language of the bullet points. These are the
things Alaskans always discuss. In fact, the mantra ever since
he worked as staff for the legislature has been to diversify the
economy. He asked members why one would destroy a fledgling
industry which has shown positive growth and fills the need to
help diversify Alaska's economy. He asked members to consider
what has occurred, including that the industry has been growing,
and thus far has been very positive. He urged members to please
vote against this bill.
4:42:24 PM
IRENE BEDARD, President, Sleeping Lady Films - Waking Giant
Productions, stated that she is Alaska Native and was born and
raised in Alaska. She said she has made her career in over 45
productions in the film and television industry. She also said
she is so happy to say that she has worked on the international
stage, but her home, Alaska, has always held her heart. She
said, "Alaska is where I'm from." Last year she incorporated
Sleeping Lady Films - Waking Giant Productions in Anchorage.
The company is an Alaska Native majority-owned company, with
minority partner, Thom Denomme from Canada who has expressed
great interest in the beauty and rich culture of Alaska's
people. However, for an entrepreneur and an international
producer, it was the film tax incentives that made starting a
company in Alaska a sound business decision. It has been their
mission and vision to show Alaska in all its beauty and
grandeur, to show the strength and integrity of Alaskans and to
tell their stories which are uniquely Alaska. She reported that
the slated projects could provide continuous work for Alaskans
and create a unique opportunity to train and develop the
workforce and infrastructure needed. She emphasized the key,
which has happened in Vancouver, British Columbia, as well, is
to have a series of projects moving forward to enable the
workforce to get trained, interned, and developed into a very
strong group of people who can be used on the international
stage.
4:44:32 PM
MS. BEDARD stated the company's strategic development has
traveled throughout the U.S. and Canada and has made connections
around the world, including Europe, Asia, and South Africa.
They have been ambassadors of goodwill for the burgeoning
industry in Alaska. She characterized the Alaska film industry
as one which creates the best overall public relations for
tourism and brings Alaska to the international stage at a pretty
high level. She offered her belief that it will be a missed
opportunity for Alaska if this bill goes through. She said,
"I'm deeply saddened to say it is not a good business decision
to keep my company here if it does go through and that would be
a great loss to our state." She read a statement from her chief
executive officer, Canadian producer, Thom Denomme, as follows
[original punctuation provided]:
I am writing to you in reference to HB 112 dealing
with the Alaska Film Tax Credits. I am curious that
this subject is once again being broached as we had
set our business plan to correspond with the passing
of the previous Bill on Tax Credits and it certainly
delivers a red flag to the industry as a whole about
shooting in Alaska.
The subject of controversy seems to arise in the
mistaken belief that the tax credits and incentives
are being used to pay the salaries of actors from
outside of Alaska, creating a campaign that states,
"Why should Alaska taxpayers pay the salary of rich
Hollywood stars?" This argument has as much
credibility as stating "Why should there be any
incentives programs for the oil and gas business in
Alaska? These incentives just go to pay the salaries
of rich oil and gas executives."
This would seem a strange statement as the oil and gas
industry is a multi-billion dollar industry creating
thousands of jobs across the State. Given the
opportunity, the film and television industry could
also be creating a myriad of opportunities not only in
the film/television business, but also in related
ancillary businesses. This includes shipping,
catering, the hospitality industry, construction,
transportation and most importantly, tourism.
4:46:44 PM
MS. BEDARD continued reading, as follows [original punctuation
provided]:
The best example of how this can affect a region is
from my home province of British Columbia. Utilizing
a diverse landscape and strong tax credits (sound
familiar?) British Columbia transformed itself to the
point that film and television is now one of our
biggest industries. When you add in the tourism and
that was created as a result of this, you can see how
this industry has been a tremendous boom to the
overall economy of British Columbia.
The challenge is that most producers have no idea of
the diversity of landscape that Alaska has to offer.
Unfortunately most of the shows shot on Alaska show
the State as inhospitable tundra. We've had producers
in LA tell us they have no winter scenes in their
film, so why should they shoot in Alaska? We of
course calmly explain that Alaska does indeed have
summer, show them pictures of the incredible scenery
and mention that in certain places, they can virtually
shoot around the clock as there is virtually no night.
Now, THAT gets their attention!
The challenge is that Alaska has created this
tremendous tax credit that has the potential to create
a whole new industry for the State and has done
absolutely nothing to promote it. The potential is
there, the template (from BC) is there, yet the only
thing being created is uncertainty and unease from
producers when they see Bills such as this one being
revisited. The key to making this work is less
bureaucrats and more salespeople.
Anchorage is ideally situated six hours from LA and
six hours from London England. Alaska should be
actively promoting to producers worldwide and
attending different film festivals such as MIPCOM and
NATPE. My partner Irene Bedard and I have been
promoting Alaska ourselves as international producers
and would be more than happy to work with the State in
this regard.
4:48:12 PM
MS. BEDARD continued reading [original punctuation provided]:
The second part of this equation is building the
infrastructure of talent to attract productions. This
means creating jobs. For our part, we are creating a
Film Institute to help train Alaskans, especially
First Alaskans, in the film industry. We would be
happy to have discussions on how we can all work
together to accomplish this. By following through on
this, we are now creating jobs for Alaskans, not for
outside production companies.
The last point I wish to comment on is likely the most
important and that is tourism. I am not privy to the
statistics, nor do I feel they can be accurately
predicted but I am going to guess that Alaskan based
shows have created a tremendous boost to tourism and
tourism based businesses. Other States with strong
Film Tax Credits, such as Louisiana and New Mexico
have also seen a growth to their tourism statistics.
Speaking for ourselves, we have a slate of shows that
will highlight Alaska in the most positive light. The
key to building this industry in Alaska is commitment,
training, cooperation between those with a vested
interest and a sustained promotional program. As a
personal note, I would also like to add that the State
has a strong promoter and ambassador in Ms. Irene
Bedard. She is the one who convinced me to open up
our production company in Alaska. She not only
believes in the incredible potential of the State but
wanted to help create something beautiful and
meaningful in the place she calls home. I will leave
you with that.
[Thom Denomme
CEO
Sleeping Lady Films/Waking Giants Productions]
4:49:36 PM
FRANCES CHEEVER, President & CEO, Squeaky Reel Productions;
Major, U.S. Army Nurse Corps, Retired, stated that she recently
retired after 32 years of service, with most of her service at
Walter Reed Army Medical Center caring for wounded warriors and
their families. She said she is passionate about telling
stories about American heroes through film and television, which
can entertain, educate, and heal America. As a screenwriter and
member of Veterans in Film and Television, she believes she can
do so, in particular, with her script 13 Pax, a high-stakes
contemporary, military page turner that takes the audience to
one of the military's far reaching power projection platforms:
Alaska. She described the basic mission and skill set of the
fictitious team, which is a motley crew of adrenaline junkies -
men and women - who have proven their mettle as the premier
combat-ready medical team. Last year, after spending only a
week in Anchorage she fell in love with Alaska and made the bold
move to take her feature film to Alaska and write an entire
sequel 13 Pax Derailed which is set in Whittier and makes Alaska
a central character. The film will showcase the beautiful
scenery, history, and people of Alaska, along with service men
and women. While in Alaska, she spent time with the Alaska Army
National Guard's Public Affairs Officer as well as the commander
of the 212th Rescue squad on Elmendorf Air Force Base (AFB) and
Richardson AFB. The military base has been very excited about
having her film come to Alaska since it has all the ingredients
of a high-concept feature film with sequel or episodic
television potential. Additionally, the film is under
consideration for optioning by some very big Hollywood hitters.
What has contributed to making this film a more attractive
venture is the AFPIP, she said. Further, she indicated the
Chief of Public Affairs for the U.S. Army wrote a letter of
encouragement for this film and endorses it as the script is in
concert with U.S. Army values and with funding. Once the U.S.
Department of Defense (DOD) production assistance agreement is
secured, the DOD will be inclined to support it, she said. She
emphasized that having military assets available at Elmendorf
Air Force Base and the U.S. Army's support makes Alaska an even
more attractive setting.
MS. CHEEVER said that currently, she is working with an Alaska-
based production company, Sprocket Heads. She anticipated
hiring hundreds of local people for this film, including
experienced local crew members, Alaska service members, veterans
and their families. She concluded by saying that HB 112 could
halt the potential future of her film, its sequel, and potential
TV series in Alaska. She urged members to please support the
AFPIP and honor the commitment to keep the program going until
2023.
4:53:32 PM
KELLY BENDER, Owner, Lazy Otter Charters, stated that her
company provides water taxi, sightseeing, and has a coffee shop.
While she is not directly affiliated with the local film
industry, her business is a local business that has benefited
from the industry. She related that the film industry has
provided direct business opportunities since her company has
taken out film productions on their boats. Additionally, her
business has enjoyed indirect benefits since the company has
taken crew and cast on sightseeing tours. She estimated the
industry has provided about $12,000-15,000 during the shoulder
season for her small mom-and-pop operation. Plus her business
also hires local Alaskans who live in the community. She
observed that the state often supports industries with finite
resources, but here is an opportunity to support an industry
that has infinite reach and can help small community-based
businesses and industries. She hoped members would understand
that this bill has a much farther reach than Hollywood since it
supports many businesses and people in Alaska.
4:55:35 PM
GARY ZIMMERMAN, General Manager, Alaska Rent a Car, Inc., stated
his business is an employee-owned licensee of the Avis Rent a
Car system that has operated in Alaska since 1955 in many
communities in Alaska. He currently employs approximately 100
full-time employees. He represents a company that is not
involved in film production; however, it benefits from the
increased activity this industry brings to Alaska. He offered
his belief that a huge economic benefit is felt throughout
Alaska from the film production dollars. Although some is as
general as increased business to hundreds of companies, other
impacts are as specific as direct wages to Alaskans, as well as
increased revenues returned to state and local government.
Although he only works in one service industry, this same
industry generates over $22 million in actual taxes and fees
collected from renters, which is paid to state and local
government, including hotel bed taxes, car rental taxes, and
general sales taxes. He emphasized that as receipts from
increased business activity increase so do revenues to
governmental agencies. Frankly, the state could not begin to
pay for the promotion of or spend marketing dollars that match
the advertising done by productions that feature Alaska. This
increased awareness helps further the state's goal to promote
tourism and aid the tourism industry such that Alaska will
surely rank high on tourists' list of where to spend their
vacation dollars. In fact, the film industry is just beginning
to get traction in Alaska with companies investing in people,
training, facilities, and equipment, but HB 112 will effectively
kill this industry and the companies that are working very hard
to help diversify Alaska's economy. He urged members to look at
the title of this committee and do what they can to promote
labor and commerce in Alaska by voting against HB 112.
[HB 112 was held over.]