02/22/2011 01:30 PM Senate LABOR & COMMERCE
| Audio | Topic |
|---|---|
| Start | |
| SB90 | |
| SB23 | |
| Adjourn |
+ teleconferenced
= bill was previously heard/scheduled
| *+ | SB 90 | TELECONFERENCED | |
| *+ | SB 81 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | SB 23 | TELECONFERENCED | |
ALASKA STATE LEGISLATURE
SENATE LABOR AND COMMERCE STANDING COMMITTEE
February 22, 2011
1:33 p.m.
MEMBERS PRESENT
Senator Dennis Egan, Chair
Senator Joe Paskvan, Vice Chair
Senator Linda Menard
Senator Bettye Davis
Senator Cathy Giessel
MEMBERS ABSENT
All members present
COMMITTEE CALENDAR
SENATE BILL NO. 90
"An Act classifying and setting a monthly salary for the
executive secretary of the Board of Public Accountancy."
- HEARD AND HELD
SENATE BILL NO. 23
"An Act relating to transferable film production tax credits;
and providing for an effective date by amending the effective
dates of secs. 3 and 4, ch. 63, SLA 2008."
- MOVED SB 23 OUT OF COMMITTEE
SENATE BILL NO. 81
"An Act establishing as a standard for the procurement of group
life and health insurance for retirement systems for certain
public employees a requirement that dependent coverage medical
benefits provided to the systems' retiree members may not be
less than dependent coverage medical benefits provided to the
systems' active members."
- BILL HEARING POSTPONED
PREVIOUS COMMITTEE ACTION
BILL: SB 90
SHORT TITLE: BOARD OF PUBLIC ACCOUNTANCY SECRETARY
SPONSOR(s): LABOR & COMMERCE
02/16/11 (S) READ THE FIRST TIME - REFERRALS
02/16/11 (S) L&C, FIN
02/22/11 (S) L&C AT 1:30 PM BELTZ 105 (TSBldg)
BILL: SB 23
SHORT TITLE: FILM PRODUCTION TAX CREDIT
SPONSOR(s): ELLIS
01/19/11 (S) PREFILE RELEASED 1/7/11
01/19/11 (S) READ THE FIRST TIME - REFERRALS
01/19/11 (S) L&C, FIN
02/17/11 (S) L&C AT 1:30 PM BELTZ 105 (TSBldg)
02/17/11 (S) Heard & Held
02/17/11 (S) MINUTE(L&C)
02/22/11 (S) L&C AT 1:30 PM BELTZ 105 (TSBldg)
WITNESS REGISTER
DANA OWEN
Staff to the Senate Labor and Commerce Committee
Alaska State Legislature
Juneau, AK
POSITION STATEMENT: Commented on SB 90.
LISA ROGERS, Chairman
Legislative Committee
Alaska Society of CPAs,
POSITION STATEMENT: Supported SB 90.
MICHAEL NEECE
Alaska Film Works
Homer, AK
POSITION STATEMENT: Supported SB 23.
WES SCHACHT, owner
Omnitour Alaska
Fritz Creek, AK
POSITION STATEMENT: Supported SB 23.
KAREN TALLENT, studio teacher
Anchorage, AK
POSITION STATEMENT: Supported SB 23.
BOB CROCKETT
Alaska Film Group (AFG)
POSITION STATEMENT: Supported SB 23.
DANIEL LEE, owner
Dan Lee Videography
Anchorage, AK
POSITION STATEMENT: Supported SB 23, but wanted more protection
for film workers in it.
KAREN CASANOVAS, representing herself
Anchorage, AK
POSITION STATEMENT: Supported SB 23.
RICHARD BENAVIDES, President
International Alliance of Theatrical Stage Employees, Moving
Picture Technicians, Artists and Allied Crafts of the United
States, Its Territories and Canada (IATSE Local 918)
Anchorage, AK
POSITION STATEMENT: Supported SB 23.
WANETTA AYERS, Director
Division of Economic Development
Department of Commerce, Community and Economic Development
(DCCED)
POSITION STATEMENT: Commented on SB 23.
DAVE WORRELL, Manager
Alaska Film Office
Department of Commerce, Community and Economic Development
(DCCED)
POSITION STATEMENT: Answered questions on SB 23.
ACTION NARRATIVE
1:33:53 PM
CHAIR DENNIS EGAN called the Senate Labor and Commerce Standing
Committee meeting to order at 1:33 p.m. Present at the call to
order were Senators Paskvan, Giessel, Davis, and Chair Egan.
1:34:16 PM
SB 90-BOARD OF PUBLIC ACCOUNTANCY SECRETARY
CHAIR EGAN announced SB 90 to be up for consideration.
DANA OWEN, staff to the Senate Labor and Commerce Committee,
sponsor of SB 90, said the Board of Public Accountancy
approached the committee to introduce a bill to correct what
they believed to be an administrative oversight. He explained
the bill that passed last year creating the position of the
secretary of the Board of Public Accountancy had an attached
fiscal note that set the pay level at a range 23. An
appropriation for a range 23 is already in the budget, so SB 90
has a zero fiscal note.
MR. OWEN related that in order to enact the law the
administration felt it had to do a classification study on the
new position. In doing so, they arrived at a range 19 as the
correct pay range. The Board of Accountancy and every CPA they
have talked to since feels this is not adequate and want to keep
the pay at a range 23. He pointed out that all of the money that
goes into this position comes from CPA fees and they all are in
support of that.
1:37:00 PM
LISA ROGERS, Chairman, Legislative Committee, Alaska Society of
CPAs, supported SB 90. To her knowledge there is no opposition
to the bill. She thought the administration oversimplified the
complexities of the profession when the study was done. This
position needs a person who will travel to the NACPA meetings so
Alaskan CPAs have a voice at the table; they don't have that now
and never have. This is not good, because the profession is
undergoing a lot of change. Not only do statutes and regulations
have to be upheld, but CPAs are also subject to many standard
sitting bodies like the Financial Accounting Standards board,
the American Institute of Certified Public Accountants, the
Securities Exchange Commission, the Public Companies Accounting
Oversight Board, and the International Accounting Standards
Board. That position needs an appropriate level of compensation
to get a qualified person to fill it.
CHAIR EGAN closed public testimony and held SB 90 until the next
meeting.
SENATOR PASKVAN commented that he carried the Senate bill that
intended having the position at a range 23. He worked
significantly with the CPA community in that regard. Ultimately
the House bill became the vehicle that passed. He supported
having the range 23.
1:40:29 PM
SB 23-FILM PRODUCTION TAX CREDIT
CHAIR EGAN announced SB 23 to be up for consideration.
1:41:02 PM
At ease from 1:41:02 PM to 1:41:21 PM.
1:41:21 PM
MICHAEL NEECE, Alaska Film Works, Homer, explained that they
have been developing a film work force in Alaska for the last
several years, and he supported SB 23. He said he worked on
"Whales" and knows the need for a film workforce in Alaska is
great.
1:43:15 PM
WES SCHACHT, owner, Omnitour Alaska, Fritz Creek, said Omnitour
is an eco-tour company. He has worked with different film crews
over the years on everything from set location to hostelling,
and they are really anxious to come back to do more work. Alaska
needs to diversify its economy; this is a renewable resource
industry and a lot of money can be made through it.
1:44:23 PM
SENATOR MENARD joined the committee.
MR. SCHACHT added that the university could expand its
curriculum by having a real film school and starting a sound
stage somewhere.
1:44:56 PM
KAREN TALLENT, studio teacher, supported SB 23. She said it is
crucial to having a viable film industry in Alaska, an industry
that will bring millions of dollars to the state evidenced by
"Everybody Loves Whales." The film industry is a means to
diversify the state's economy, providing jobs for Alaskans, and
creating economic opportunities for Alaskan businesses.
MS. TALLENT said film and television projects also offer
invaluable marketing and promotion for Alaska tourism, products,
and businesses. Financial incentives have changed the way
filming decisions are made. Alaska's beautiful scenery and
unique locations are not enough to entice film makers to the
state. "It's all about the money and where producers can get the
most bang for their buck."
She said Alaska has to be able to compete with the 45 other
states that have incentive programs in place as well as Canada
with its incentives. Aside from letting the industry know Alaska
is open for business, extending the tax credit will create a
stable environment where Alaskan businesses can make long term
plans to capitalize on this lucrative industry. It would allow
for a more extensive crew base, building infrastructure such as
a sound stage, and help Alaskan businesses purchase the
specialty items film and TV productions need - like wardrobe
trailers, hair and makeup trailers, catering trucks, honey
wagons (portable dressing rooms and bathrooms), and more grip
trucks with lighting equipment.
As studio teacher for both "Everybody Loves Whales" and "Ghost
Vision," she said she saw firsthand the impact the film industry
had. She worked with at least 100 Alaskan crew members and saw
how many other Alaskans were hired for speaking roles and as
extras. She heard all about the activities the outside crew did
on their days off: they went to Seward, Girdwood, Talkeetna, and
Chena Hot Springs; they went flight seeing to Denali and dog
mushing; they went to the Anchorage Museum and to the Native
Heritage Center; and they went to restaurants each night and
shopped for gifts for family and friends. Even Drew Barrymore
bought Alaskan knit hats that she gave out to the crew on the
last day of filming.
Alaska's growing film industry provides economic diversity by
hiring Alaskan crews and vendors, casting Alaskan talent, and
contracting with Alaska film support service companies with each
production that shoots here. She concluded that "the film
production tax incentive makes it possible to continue growing
this industry, and it's a win-win for Alaska."
1:48:19 PM
BOB CROCKETT, Alaska Film Group (AFG), said they are a non-
profit film industry trade association formed in 1992 to pool
resources that would further their common goals. He said their
mission is to be a voice for the film and video industry of
Alaska, provide educational forums for improvement of their
craft, promote Alaska as a film and video destination, and
create economic opportunities for their membership and all
Alaskans. They supported SB 23 because it stimulates business
and puts Alaskans to work. Extension of the tax incentive will
allow producers to plan ahead, as it often takes three years for
a film to make its way to the screen. It also provides an
opportunity for Alaskan business to plan how to invest in
infrastructure. In addition to all these reasons, movies can
continue being shot in Alaska that actually have stories about
Alaska and Alaskans.
MR. CROCKETT said the common denominator to all successful film
locations around the world is aggressive incentives. An example
of a successful state is Louisiana. They have a base tax credit
of 30 percent, a 5 percent additional credit on Louisiana
residents, and a 40 percent credit on infrastructure
development. The state will even buy back a tax credit from a
producer for 85 cents on the dollar. And they have made their
tax incentive program permanent. He said with this tax credit
extension, Alaska is poised to create hundreds of new jobs,
stimulate existing business, create new businesses and diversify
Alaska's economy.
In 2008, industry salaries averaged $76,000, 72 percent higher
than the national average. This is an industry that builds
support service infrastructure and that will build Alaska's
economy and job base and multiply its economic impact through
increased tourism. It is an industry that will provide future
generations of Alaskans with diverse career opportunities and
meets the Governor and Alaska's vision of becoming steadily more
self sufficient.
1:51:48 PM
DANIEL LEE, owner, Dan Lee Videography, Anchorage, said he is a
free lance camera operator, a lifelong Alaskan, and a Marine
combat vet. He wanted to speak today about what is missing from
the incentive program: provisions to ensure that Alaskan workers
are well treated. He explained his concern is that companies
will come up and get this fantastic incentive and potentially
abuse or overuse Alaskans.
He related how he worked on three films in the last year that
qualified for the incentive. He said that film work tends to
attract a very passionate sort of person who will not always
look out for their best interests in the beginning and said it
is very easy to exploit this kind of person. He suggested adding
a provision that would allow for the denial of an incentive to
companies that act in a manner that is not conducive to the
well-being of Alaskans.
1:53:38 PM
SENATOR PASKVAN asked for specific examples of exploitation that
he observed.
MR. LEE answered from working on the Jon Voight picture, he
found that the hours were incredibly long and not very well
compensated for. He heard accounts that persons on the film
actually experienced hypothermia; one was actually hospitalized
for it. He said that the work is long and hard, but the
conditions in Alaska are an increased danger and it needs to be
accounted for. Places to warm up are needed, as well as for
protection.
1:55:39 PM
KAREN CASANOVAS, representing herself as an independent
contractor, said she worked on two movies here: for "Whales" as
an extras casting and production assistant and in set
decoration; for "Beyond" she was locations manager, set
decorator and buyer. She said these crew positions were possible
because of the Alaska Crew Training she received last June, her
prior experience in production design, and previous background
in the performing arts while growing up as a lifelong Alaskan.
MS. CASANOVAS said that Alaska needs to continue offering
incentives to producers who want to make movies here. "Everybody
Loves Whales" had approximately 300 crew members; about 133 were
Alaskans and over 2,000 extras were used. The last time she
checked, 28 productions were prequalified for FY11 and 14 were
slated to receive the tax credit. While non-fiction television
seems to be the bread and butter currently, she suggested
offering more incentives for feature films to be produced here.
She related that many producers of reality TV bring their own
crew and equipment, not always offering opportunities for
Alaskans to be part of the film team. To sustain the film
industry the Alaska film production incentive program must be
extended; secondly, trained crew is needed; and finally other
infrastructure such as a sound stage needs to be funded and
built. All related businesses benefit from the film industry:
hotel, crew, equipment rental and sales, floral and sign shops,
paint and lumber suppliers, and printing companies.
MS. CASANOVAS said as the State of Alaska develops a revised
commerce growth plan, the system must be structured to cause
networks of film related for profit businesses to flourish. In
2005, the US Library of Commerce designated "Cool Hand Luke" as
culturally, historically, or esthetically significant and
selected it for preservation in the National Film Registry. She
said, "With Alaskans writing screen plays and ramping up their
production companies, we, too, can have films that are viewed as
aesthetically significant and showcase the beauty of Alaska."
For the upcoming feature "Doppelganger Principle", the goal will
be to hire Alaskans for all crew positions except for Ed Asner
in the starring role. Continuing to keep residents gainfully
employed benefits everyone, she said. Our economic cycle has
shifted over time from the boom days of the pipeline era and we
need other industries to grow to prevent the $1.8 billion (DOLWD
figures) that leave our state.
MS. CASANOVAS said with the long term economic activity created
by the film industry, businesses can be sequestered so the
expansion could occur nearly all at the same time. She urged
them to support SB 23, because it is an economic development
initiative which helps grow the film industry.
RICHARD BENAVIDES, President, International Alliance of
Theatrical Stage Employees, Moving Picture Technicians, Artists
and Allied Crafts of the United States, Its Territories and
Canada (IATSE Local 918), said it is the recognized industry
union; their mission and goals are training and employment and
ensuring safe working conditions for all those unseen people who
make the magic of theatre and motion pictures that everyone
enjoys. They supported SB 23 as it would expand the working
opportunities for all of their members and every other Alaskan
who wishes to be part of this exciting industry. He said they
intend to work as a partner with all interested parties to make
this industry stronger in the state.
At ease from 2:03:15 p.m. to 2:03:33 p.m.
2:03:20 PM
SENATOR PASKVAN moved to report SB 23 from committee with
individual recommendations and attached fiscal note.
SENATOR MENARD objected to let Senator Giessel ask her
questions.
SENATOR GIESSEL said she is strongly in favor of diversifying
Alaska's economy, but she wasn't sure passing SB 23 would
actually employ more Alaskans. Ms. Casanovas just said that out
of crew of 300, only about one-third of those were Alaskans.
When she looked at section 4 on page 2, it talks about eligible
expenditures for the credit; they must be directly related to
the production and be incurred in the state. It doesn't say it
has to be Alaskan vendors or workers, only that the expenses be
incurred here. Are companies bringing up their own wardrobe
folks, photographers, and carpenters, and then counting those
expenses (wages) as qualified expenditures for this tax credit?
2:06:22 PM
DAVE WORRELL, Manager, Alaska Film Office, Department of
Commerce, Community and Economic Development (DCCED), responded
that his practice is to request that production companies use
local vendors and really works with them to provide
opportunities. They want to see local vendors providing the
types of equipment that productions use whether it be honey
wagons, specialty lighting equipment, or cameras. Several
production services companies in Alaska provide these services
and if the production goes through one of them, it is absolutely
qualified.
SENATOR GIESSEL remarked that he used the word "if" when they
use these production companies. But asked if they don't use
them, then do the expenses qualify for the tax credit.
MR. WORRELL answered that typically that is the case. It's
possible that a production might need some highly specialized
items, for example camera gear, that a local production company
wouldn't have available or be able to procure for a production,
in which case the production is encouraged to talk to him about
those expenses.
SENATOR PASKVAN asked if a process is followed where the film
producer would be able to challenge that.
MR. WORRELL answered yes: in a final application for a tax
credit. If after the CPA has submitted expenses and the
department wants more information, they request it. The
department could allow a particular expense and reduce the tax
credit by that amount. An appeal process goes through the
commissioner. Typically, things get worked out well in advance
during production.
2:10:02 PM
WANETTA AYERS, Director, Division of Economic Development,
Department of Commerce, Community and Economic Development
(DCCED), assured the committee that the statute already says
"the award of the credit under this section is conditioned on
the producers and the production's full compliance with all
applicable state laws and regulations."
SENATOR PASKVAN said he assumed she was addressing Mr. Lee's
issues about hours and cold, and commented that those are not
unique to the film industry.
SENATOR MENARD commented that whenever they tread down new
waters, which the film industry incentive is, there will always
be a few hiccups, but she felt confident that this industry
could flourish here.
SENATOR GIESSEL concurred with Senator Menard, but needed to ask
questions so Alaska would not to be taken advantage of by a
multimillion dollar industry that knows how to maneuver.
2:13:56 PM
SENATOR PASKVAN restated his motion to report SB 23 from
committee with individual recommendations and attached fiscal
note. There were no objections and it was so ordered.
2:14:28 PM
At ease from 2:14 p.m. to 2:15.
2:15:50 PM
Finding no further business to come before the committee Chair
Egan adjourned the meeting at 2:16 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| SB 23 Alaska Film Incentives - Economic Impact.pdf |
SFIN 3/21/2011 9:00:00 AM SL&C 2/22/2011 1:30:00 PM |
SB 23 |
| SB 23 Letters supporting.PDF |
SFIN 3/21/2011 9:00:00 AM SL&C 2/22/2011 1:30:00 PM |
SB 23 |
| SB 23 Muni of Anchorage economic goal.PDF |
SFIN 3/21/2011 9:00:00 AM SL&C 2/22/2011 1:30:00 PM |
SB 23 |
| SB 23 Press Clippings.PDF |
SFIN 3/21/2011 9:00:00 AM SL&C 2/22/2011 1:30:00 PM |
SB 23 |
| SB 23 Sectional Analysis.PDF |
SL&C 2/22/2011 1:30:00 PM |
SB 23 |
| Sb 23 Sponsor Statement.PDF |
SFIN 3/21/2011 9:00:00 AM SL&C 2/22/2011 1:30:00 PM |
SB 23 |
| SB023-CCED-DED-02-11-11.pdf |
SL&C 2/22/2011 1:30:00 PM |
SB 23 |
| SB23-DOR-TAX-02-12-11 film production tax credit.pdf |
SL&C 2/22/2011 1:30:00 PM |
SB 23 |
| SB 23 Letter from John Markel.pdf |
SL&C 2/22/2011 1:30:00 PM |
SB 23 |