Legislature(2007 - 2008)
04/07/2008 02:53 PM House FIN
| Audio | Topic |
|---|---|
| Start | |
| SB230 | |
| SB260 | |
| SB285 | |
| SB185 |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
CS FOR SPONSOR SUBSTITUTE FOR SENATE BILL NO. 230(FIN) am
An Act establishing the film office in the Department
of Commerce, Community, and Economic Development;
creating a transferable tax credit applicable to
certain film production expenditures incurred in the
state; and providing for an effective date.
Representative Hawker MOVED Amendment #3 (Copy on File):
Page 2, line 8, following "exceed"
Delete "$150,000,000"
Insert "$50,000,000"
Page 4, line 19, following "equal to"
Delete "30
Insert "20"
Page 9, line 11, following "equals" (lines 17, 23
to conform to CS)
Delete "$150,000,000"
Insert "$50,000,000"
Vice-Chair Stoltze OBJECTED for discussion.
2:54:20 PM
Representative Hawker described the Amendment as reducing
the rate of the authorized state subsidy. There was a
discussion regarding the efficacy of putting a cap on the
subsidies.
SENATOR JOHNNY ELLIS, SPONSOR, reiterated his concerns
regarding the Amendment. He thought the limits already built
into the legislation, the overall limit of $150 million, the
annual review and the five year sunset, were sufficient. The
limits were calibrated in consultation with the film
industry and he did not think the program would be
competitive if adjusted to the numbers proposed the in
Amendment, especially taking into account the high cost of
doing business in Alaska.
3:00:26 PM
Representative Hawker urged judgment as stewards of the
treasury.
Vice-Chair Stoltze favored the lower amounts in the
Amendment, with the ability to extend funding if all went
well.
Representative Crawford thought jobs were the issue and
wanted Alaska to remain competitive.
Vice-Chair Stoltze proposed dividing Amendment #3 into two
parts.
3:05:26 PM
Representative Hawker MOVED to ADOPT new Amendment #3, part
1, lines 5-7. Representative Thomas OBJECTED.
Representative Hawker clarified that the proposed new
amendment changed the base level of subsidization from 30%
of eligible qualified expenditures to 20%.
3:06:51 PM
Co-Chair Chenault MOVED to change part one of new Amendment
#3 to 25%. Representative Gara OBJECTED.
Representative Gara stated that cost is the major reason
films are not being made in Alaska. He argued for the higher
number to give the proposal a chance to work.
Co-Chair Chenault supported starting a new film industry but
was concerned with not knowing for five years. He compared
the issue with new taxes on oil. He urged caution.
3:12:30 PM
Representative Gara reminded the Committee of the expense of
transportation. He proposed accepting 25% with 30% for in-
state transportation and travel provided by an Alaskan
business.
3:14:19 PM
Senator Ellis asserted that going from 30% to 20% would take
Alaska out of competition for films, and 25% would put the
state at the bottom of competitiveness with other states.
Representative Gara REMOVED his OBJECTION. There being NO
further OBJECTION, Amendment #3, part 1, as amended to 25%,
was accepted.
Representative Gara OBJECTED.
A roll call vote was taken on the motion.
IN FAVOR: Thomas, Hawker, Chenault, Meyer
OPPOSED: Crawford, Gara, Joule, Nelson, Stoltze
Absent from the vote: Foster, Kelly
The MOTION FAILED (4/5).
3:18:07 PM
Representative Hawker MOVED Amendment #3, part 2, dropping
the five-year cap from $150 million to $50 million.
Co-Chair Meyer proposed amending part 2 to change the number
to $100 million.
Representative Crawford OBJECTED for DISCUSSION.
Senator Ellis explained that the amounts in the original
bill were open-ended in order to encourage major enterprise.
He added that no other state has a similar cap. He pointed
to other limits already built into the bill such as the time
limit.
3:21:11 PM
Representative Gara asked about caps in other states.
MAX HENSLEY, STAFF, SENATOR JOHNNY ELLIS, explained three
types of caps: per production, an annual appropriations cap,
and cap on the amount covered for wages. He listed the
states that do not have caps. The life-time program cap is
not used in other places.
Co-Chair Meyer offered that the bill could be re-visited if
the cap was reached.
Representative Crawford asserted that the $150 million cap
was already a significant deterrent and a reasonable
compromise. He MAINTAINED his objection.
Representative Thomas stated he supported starting with $100
million and coming back in future.
Representative Hawker supported the amendment to the
Amendment.
3:24:43 PM
Representative Gara urged trying to let it work without too
many constraints and come back later and analyze. He thought
the amendment would hurt the chances of the industry
working.
Senator Ellis pointed out that the program is speculative.
No money is spent until the State gains the benefit. He
encouraged planning ahead and making an investment.
Co-Chair Meyer reiterated that the cap could be adjusted.
Co-Chair Meyer MOVED Amendment #3, part 2 as amended to $100
million.
A roll call vote was taken on the motion.
IN FAVOR: Hawker, Stoltze, Thomas, Chenault, Meyer
OPPOSED: Crawford, Gara, Joule, Nelson
Absent from the Vote: Foster, Kelly
The MOTION PASSED (5/4).
AT EASE 3:30:32 PM
RECONVENE 3:32:07 PM
Representative Hawker explained that the motion before the
Committee was the adoption of Amendment #3, part 2, amended
to $100 million.
Representative Crawford MAINTAINED his OBJECTION.
A roll call vote was taken on the motion.
IN FAVOR: Hawker, Stoltze, Thomas, Meyer, Chenault
OPPOSED: Gara, Joule, Nelson, Crawford
Absent from the Vote: Foster, Kelly
The MOTION PASSED (5/4).
3:34:59 PM
SUZANNE ARMSTRONG, STAFF, CO-CHAIR MEYER, explained the
status of the Amendment. The base subsidy level was still at
30% but the cap was reduced to $100 million.
Vice-Chair Stoltze MOVED to REPORT SB 230 out of Committee
with individual recommendations and attached fiscal notes.
There being NO OBJECTION, it was so ordered.
HCS CS SS SB 230(FIN) was REPORTED out of Committee with a
"do pass" recommendation and with zero fiscal note #3 by the
Department of Revenue and fiscal note #4 by the Department
of Commerce, Community and Economic Development.
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