Legislature(2013 - 2014)BARNES 124
03/15/2013 03:15 PM House LABOR & COMMERCE
| Audio | Topic |
|---|---|
| Start | |
| HB112 | |
| HB76 | |
| HB74 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 112 | TELECONFERENCED | |
| += | HB 76 | TELECONFERENCED | |
| += | HB 74 | TELECONFERENCED | |
HB 112-REPEAL FILM PRODUCTION TAX CREDIT
3:17:32 PM
CHAIR OLSON announced that the first 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."
3:19:30 PM
REPRESENTATIVE JOSEPHSON asked whether the department could
testify.
3:19:48 PM
ROBERTA GRAHAM, Assistant Commissioner, introduced herself.
REPRESENTATIVE JOSEPHSON asked whether the film tax credit is a
moneymaker for the state.
MS. GRAHAM responded that certainly a number of businesses
ranging from production companies and caterers, as well as
actors, and others have begun as a result of the industry so it
is a growing industry. Based on total wages to date for the
industry, of the $35.1 million in tax credits issued,
approximately $10.4 million has been paid in wages to Alaskans.
Additionally, another $37.4 million has been paid to vendors,
including caterers, production workers, and any number of others
involved in the industry.
3:21:27 PM
REPRESENTATIVE JOSEPHSON recapped that the total benefits paid
to vendors and in wages was $47.8 million and the incentives
paid for the program totaled $35 million. He asked whether the
$47.8 million was spent in Alaska.
MS. GRAHAM answered yes; the wages and funds were paid to Alaska
companies and Alaska residents.
REPRESENTATIVE JOSEPHSON clarified that none of the money paid
went to pay an actor's salary, such as to Jon Voight.
MS. GRAHAM answered no, and noted that there is a category for
non-resident wages.
3:22:17 PM
RON HOLMSTROM, Screen Actors Guild (SAG), American Federation of
Television and Radio Artists (AFTRA), stated that since the
program has been in existence, the SAG/AFTRA membership of
professional actors in Alaska has more than tripled. The
reputation of Alaska's talent pool has been circulating in
Hollywood and he related his understanding that the Hollywood
industry is pretty amazed. He related that although the high
paying jobs have been going to Lower 48 people, as people in
Alaska become trained more [leading] roles are going to
Alaskans. He recapped that the industry outside Alaska has just
begun to recognize the wealth of talent in Alaska. He said he
was hired as an actor in Hollywood, but he hardly ever saw an
actor in the state he worked in on a film set. However, while
he was on the film set for The Frozen Ground he was amazed that
so many local actors had been hired for prominent roles. He
offered his belief that this is a growing industry and many
people joining the ranks of professional film workers. In fact,
many [Alaskan actors] are receiving residual checks for films
made in Alaska. In closing he said, "Let's keep the jobs coming
and let's grow an industry."
3:24:56 PM
D.K. JOHNSTON, Executive Producer/Director, Alaska Filmmakers,
related he is also representing several other organizations,
including the Alaska Actors Network and the Alaska Film Forum,
who have helped to educate, encourage, and showcase the growing
number of talented storytellers working to build and maintain a
professional production industry created by the Alaska film tax
incentive program. Additionally, he is representing a number of
filmmakers who cannot be here as they are on set working in the
industry that is being jeopardized by HB 112. He mentioned that
he has testified over the past few years about the creative and
hard-working film industry in Alaska. He said the film
incentive program provides filmmakers with opportunities that
would normally require all of them to relocate to pursue their
dreams and develop their talent. He urged members not to
support this bill, but instead to support the growth of an
industry that will only help further the creative minds of
Alaska's storytellers, both young and old. This film incentive
program not only helps create an opportunity for new sources of
revenue in Alaska, but will continue to create a new source of
jobs and creative opportunities for Alaskans. Unfortunately,
the bill in front of members today is sending a strong and
unpleasant message to the production community and if it is
enacted would require those who wish to continue to build their
lives and careers in the production field in Alaska to relocate
out-of-state in order to provide sufficient work and income to
sustain their livelihood. He concluded by stating this is not
just about work, but about families and communities of people
who want to do what they love in a place they call home. He
said he will submit written testimony from himself and those he
is representing today. He expressed hope members would consider
their written comments as they make decisions on HB 112.
3:27:16 PM
JOHN BUTZKE, Owner, Talking Circle Media, related that his
company is an Alaska film, television, and production company.
He began his career in Alaska in 1984. In 1989, he started his
own company in Anchorage. Currently, he has 6 full-time
employees, but has had as many as 17 full- and part-time
employees. He then related his opposition to HB 112 and urged
members to oppose it. He informed the committee that his
company has experienced gross revenues of approximately $500,000
spent by Lower 48 film and television companies directly related
to the film tax credit over the past five years. For example,
this week he is either renting out camera equipment or crew on
projects supported by the film tax incentives. The current film
tax credit brings in money to his business and their families,
but also brings in millions of dollars in income to non-video
related companies all over urban and rural Alaska. Last
legislative session he testified that the prior film tax credit
needed revisions, which were made after much public discussion
and with good judgment when the legislature passed the bill.
With its new restrictions the program is truly a local jobs
creation program. He said he is very confused that anyone would
present HB 112, which desecrates all the work everyone put into
crafting the new program that is scheduled to start this summer.
He offered his belief that HB 112 is based on misguided
information being presented to House leadership by biased
individuals who have no first-hand knowledge of the success of
the film tax credit program. The program has received little
public money, which has seen just under $110 million spent due
to Lower-48 film and television companies. Still, $8 million in
tax credits has been redeemed by corporations over the past five
years. Dozens of outside film companies have applied for
credits but did not finish the process. Thus in those instances
the state incurred no cost, which he believes is a good return
on investment. He urged members to kill or vote against HB 112.
3:30:38 PM
REPRESENTATIVE SADDLER referred to page 3 of the Alaska Film
Office's report to the legislature that indicates that as of
12/31/12 the Department of Revenue (DOR) has issued 55 credit
certificates to approve productions for $35 million rather than
$8 million previously mentioned.
MR. BUTZKE asked if he could respond.
CHAIR OLSON said that there are a number of witnesses who wish
to testify. He noted that members have copies of the report,
his written testimony, and anyone else can also submit written
testimony.
3:31:33 PM
ROBIN KORNFIELD, Vice President, Communications & Marketing,
NANA Development Corporation (NANA); President, Piksik, began by
explaining that Piksik is NANA's film production support
company. She then related her opposition to HB 112. After
several years of work dedicated toward the development of a new
industry, she stated that she is reminding Alaskans about the
value of programs that encourage the development of new
opportunities for the next generation of Alaska business. She
informed the committee that NANA supports the film tax credit
since the existing program has already created jobs for NANA's
shareholders and private-sector income for a wide array of
Alaska businesses. Additionally, NANA wants to be involved in
building new economies in the state. She said that NANA
developed Red Dog Mine and in doing so created opportunities for
thousands of Alaskans. She pointed out that NANA researched the
film business as it does any other opportunity and learned
characteristics about the film industry. She characterized the
industry as a platform industry, similar to natural resources in
that it creates primary products such as films, TV series, and
other programs. The film industry requires support services,
similar to what NANA does today in terms of supporting
construction, food service, technology services, hospitality,
and security. Additionally, it creates specialized job
opportunities that are not yet widespread in Alaska. Another
characteristic is that the entire state can be involved from
urban Alaska to remote locations. While the big productions get
attention, hundreds of cable channels worldwide want to fill up
24 hours of programming each day. In fact, NANA created a
documentary this past winter about the people of Diomede and
whales. Further, reality shows have brought lots of attention
to Alaska, which is mostly positive, as well as national
advertising, such as the COORS commercials filmed on Knik
Glacier or the Carhart's commercials shot last fall, which is
done with Alaska's talent and Alaska's production support.
3:34:11 PM
MR. KORNFIELD said that investments in training and facilities
that NANA would like to do are made at NANA's risk and are not
eligible for tax credits; however, the tax credits are necessary
to bring business to Alaska. Alaska competes with film
production destinations around the world, all of which offer
compelling incentives for producers to select their location.
She stated that NANA is opposed to HB 112 because right when
Alaska has finally achieved an extension on the tax credit
HB 112 "pulls the rug" out from under the potential of a new
industry. Alaska needs time to build this business and support
of the public sector is critical in the global marketplace in
which Alaska competes.
3:35:02 PM
BILL POPP, President & Chief Executive Officer, Anchorage
Economic Development Corporation (AEDC), stated that AEDC is a
501(c)(6) private non-profit membership organization
representing 240 businesses with business interests throughout
the state. He then related his opposition to HB 112. The AEDC
has been involved since the beginning of this new industry with
the focus on trying to find new ways to diversify the economy in
the coming decade. If the state is not going to be dependent
upon the price of a barrel of oil, a pound of fish, or an ounce
of gold, the state must start making the investments now and try
to find new industries.
MR. POPP indicated the AEDC has considered the film tax credit
as a means to employ caterers and film-related industry
businesses, but also to take the existing trades, including
plumbers, electricians, carpenters, and craftsmen of all kinds
who can provide services to the productions. He characterized
these people as local folks who enjoy the opportunity to be more
fully employed on an annual basis. The AEDC has also considered
the film program as an opportunity to focus on more
diversification in the economy. In 2011, the AEDC was
commissioned to do an economic impact study on the film, Big
Miracle. The AEDC was only halfway through the disclosure
process and identified the production had already spent $7.7
million in goods and services with Alaska companies and an
additional $4 million on payroll and benefits to Alaskans who
worked on the film as cast or crew. The aforementioned averaged
$285,000 spent for each of the 58 days of filming within the
state, plus 1,300 Alaskans were touched through the expenditures
from this one production. He suggested that once the indirect
and induced effects of the direct spending were tallied - in
working with the McDowell Group - the AEDC identified a total
economic impact of $16.5 million from this single production.
He said that the AEDC opposes the passage of HB 112 and believes
it is very premature to make judgments on the incentive program
since very few years have passed. The film industry previously
only had a very small presence in the state. This is not unlike
many industries that have become major parts of the state;
however, it often takes decades for an industry to grow and
develop, as well as the necessity of the state to provide
incentives to grow these industries. He concluded by saying
that the AEDC opposes HB 112.
3:38:25 PM
BRUCE OSKOLKOFF, Owner, Limelight Recording Studios, related
that he also works with the Ninilchik Native Corporation. He
said that this bill would eliminate or negatively impact the
film industry incentives in Alaska. This bill would be
devastating from an immediate perspective, but also from a long-
term growth perspective that may affect generations of Alaskans.
This bill, HB 112, would be a most devastating and detrimental
reaction and oversight in the haste to address other legitimate
economic conditions in Alaska. Enactment of HB 112 is not a
long-term meaningful solution and would have an adverse impact
on the current Alaska-based businesses, contractors, support
facilities, film industry, and film industry infrastructure as
well as the residents involved in the industry. This bill may
simply and quickly turn off this industry's development in
Alaska. As a lifelong Alaskan, he said he has witnessed the
halting of growth in various industries in the state via
innocuous legislation. He informed the committee that he has
participated in the film and recording industries in Alaska for
over 30 years and has benefited greatly as these industries have
taken hold in Alaska and shown signs of growth and enhancement.
Mr. Oskolkoff related that he maintains opposition to HB 112,
even after listening to the discussions on the bill.
Furthermore, he said he has been quite appalled the legislature
would consider this at a time when the state can benefit from
the program. Even the state's oil industry started slowly with
little support in the initial stages and required and still
requires structured incentives to maintain it as a viable part
of the economy, a resource for employment, and an industry that
supports many facets of the state's capacity, including our
educational college systems. He offered his belief that many
people are not fully aware of the magnitude of the film industry
and urged members to vote against HB 112 and take if off the
state's legislative table.
3:42:10 PM
THOMAS RANDELL DALY, HiSpeed Gear Inc., stated he runs several
HiSpeed companies in the state and also produces the Tom Randell
Daly Show. He related his opposition to HB 112, the effect of
which is the opposite of what Alaska needs, which is a
competitive, stable economy. As a business owner, he said
several things came to mind when he heard about HB 112.
Firstly, Alaska has a three-legged economy consisting of
government, energy, and all other sectors. However, the most
successful leg, energy, is in a cycle of decline as is expected
to be the case for the federal government revenue leg.
Therefore, the third leg of the economy, all other businesses,
will need to shoulder more of the economic responsibility.
Although the current film program, scheduled to end in July, is
not perfect, it still returned $2.05 in business revenue for
every $1.00 in film incentives spent, according to the numbers
reported in the recently completed legislative audit.
MR. Daly reminded the committee that the state is currently
completing its first five-year experience in the film industry.
A legislative audit recently reviewed the film [incentive]
program and determined that improvements needed to be made. If
two films cover the same topic but one casts a star like Tom
Cruise, the public will likely want to see the well-known actor
and this personifies the reason for the premiums paid in the
past. New ideas needed to be implemented if the program was
expected to move forward. After reviewing the existing program
and finding ways to make the film program better, the new film
[incentive] program set to become effective this year would
shift a greater emphasis on hiring Alaskans throughout all
levels of production and will maximize the benefit from the
program to Alaskans, Alaska's businesses, and the state, and
would increase the revenue per dollar of tax credit.
MR. DALY said he has spoken to most of the vendors involved in
film projects on the Kenai Peninsula, which has been known as a
federally recognized hub zone for traditionally high
unemployment. The overall experience with the film industry has
been very positive and the industry is well-received. However,
HB l12 will discontinue the film incentive program and for all
intent and purposes will kill the industry in Alaska. If that
happens, all the investments, capital, and time spent to develop
the film industry in Alaska to this point will have been wasted.
He urged members to kill HB 112 and allow the film industry to
grow.
MR. DALY then offered his belief that to repeal the film
production tax credit at this time would waste two years of
legislative work to produce a new more beneficial film
production program and five years of industry work, investment,
and training to set the foundations of the industry. Alaska's
competitors are investing more aggressively and are seeing
bigger gains. He suggested the legislature move forward with
the plan that was worked out together in the legislature last
session. He asked members to please join him in supporting
business and industry in the state and continue to diversify the
economy for a stronger future. He said, "Let's do what we
agreed to do. Invest in Alaska by providing a stable and
competitive environment for the film industry to grow in Alaska.
Join me in stopping HB l12 - an anti-business bill."
3:46:35 PM
DEBORAH SCHILDT, President, Alaska Film Group, informed the
committee that the Alaska Film Group is Alaska's largest non-
profit association of film and video professionals. Over the
past 20 years, the group has grown from 12 people in a garage in
Eagle River to 100-plus members from all around the state. The
group consists of film professionals, support service providers,
and ancillary businesses. Everyone in this group has seen an
economic boom from having a growing film industry in the state.
The state has gone from one or two outside productions per year
offering a few weeks work in the days prior to film incentives
to dozens of productions offering months of work. Incentives
are the way films work today, he said. Producers shop the globe
for incentives and take their projects to that location. It's
the reason why Alaskan stories like The Guardian went to
Shreveport, Louisiana. It's the reason that Big Miracle came
here. She said that HB 112 is a deal breaker for the film
industry in Alaska, an industry that has had positive economic
impact on many Alaskans, not just the Alaska Film Group's
membership. Hundreds of statewide businesses and several Alaska
corporations have benefited by using the tax credits in the
banking, fishing, mining, and tourism sectors of Alaska's
economy.
MS. SCHILDT said, with respect to labor, that students and
tradesmen are enrolled in programs statewide and hundreds of
Alaskans are employed by this industry. The new incentive
program will decrease incentives for outside hire and will
increase incentives for local hire. The film industry is a
proven job generator. She asked members not to discourage the
industry when the job rate is down from 2012. She said with
respect to commerce, that this program does pencil out as noted
on page 19 of the 2012 legislative audit by Northern Economic.
She read, "The state realizes a positive return on investment
from the AFPIP. It generates an estimated $2 in Alaskan
economic output for every $1 in tax credit - an economic
multiplier of 2.05 per the consultant's analysis." The new
program has $100 million allocated for each of two five-year
periods beginning in July 2013. She asked members to do the
math, work with the facts and not fiction when making the
decision. This program makes economic sense to many Alaskans,
from mom and pop operations to corporations building
infrastructure for this industry. She cautioned that none of
them can afford to lose their capital investments. These
companies are depending on the legislature. She offered her
belief that HB 112 is a losing proposition at a time when Alaska
needs to send a positive pro-business message. Alaskan
businesses need the legislature's vote of confidence in order to
continue to move forward with their investments in film
infrastructure. Producers from around the world need to hear
that Alaska's incentive program is stable and bankable when they
consider Alaska for their next production. This new 10-year
film tax incentive program is truly new and improved. It is
more Alaska centric in structure and implementation.
Furthermore, the new program offers credits, not subsidies, and
credits are issued only after the money is spent in Alaska. The
program offers proven value to Alaskans across the map. She
urged members to prove the film industry's worth before cutting
the program. She concluded that member's votes will impact
economic opportunities for all members of the Alaska Film Group.
3:50:40 PM
STACY BOLES, Director, Alaska Crew Training, informed the
committee she is a lifelong Alaskan from Sitka with a background
in theatre that she has been unable to use until the passage of
the film incentive program. She explained that Alaska Crew
Training is a nonprofit organization that responds to the needs
of film production because when productions come to Alaska the
companies want the assurance and confidence that a crew base and
infrastructure exist and that Alaska is doing its best to
provide trained crew who can work on their productions. The
film tax credit incentives have created this asset because when
companies hire Alaskans, the production companies also get a
better break. She said that Alaska Crew Training creates a
program to train entry level positions, but also identifies
existing labor and goods for production companies. Alaska Crew
Training works with local groups, including the University of
Alaska Fairbanks to provide curriculum designed to grow a person
from an entry-level position to a key position. The on-the-job
training is important as is the incentive program to lure
companies into the state and continue the training opportunities
otherwise opportunities for already trained workers in the film
industry are limited.
3:52:54 PM
MS. BOLES related that she taught a single one-week class and
within a week two people were put to work: one in a public
service announcement (PSA) announcement and the second was cast
in a national television commercial, which means these people
made good wages and were eligible for residual payments - all
from attending one class. She said her company is successful
and to date has trained 200 people and hopes to train 500 people
by the end of 2013. She noted that the Department of Labor &
Workforce Development (DLWD) has a program called Alaska Crew
and Cast Advancement Program (AKCCAP) which supports interested
Alaskans who wish to work in the film industry. The program
provides tuition and helps develop curriculum. Alaskans are
coming to the industry in an unconventional way. Her company
helps people "figure out the secret handshake," which means
everything to the industry. However, killing the Alaska Film
Production Incentive Program with passage of HB 112 will stop
the momentum of this growing industry. This bill is a short-
term reaction to long-range planning for the industry. She
urged members to think about the people who put the time into
developing this program and the workers that may be displaced.
She concluded that HB 112 will limit the amount of industry
coming to the state and the jobs for Alaskan workers. Many
Alaskans want to return to the state to work in the film
industry and remain in Alaska. She concluded by stating her
opposition to HB 112.
3:55:02 PM
BOB CROCKETT, General Manager, Piksik, stated that he has been
an Alaskan resident for 40 years and would like to testify in
opposition to HB 112. He related that he has worked in the film
industry for over 30 years during which time the industry has
evolved into a more sustainable industry. Since the advent of
Alaska's economic incentive in 2008, companies have invested
millions in infrastructure and equipment. For example, a new
sound stage is being built in south Anchorage and Piksik has
purchased and shipped industry-type trucks to Alaska that are
being rented to film productions. Other companies are making
similar investments in cameras and other high-dollar rental
equipment to meet the demand of increased production activity.
Workforce training is underway. However, the introduction of
HB 112 "has sent a chill around the world." Alaska's Film
Production Incentive Program is competitive in the industry but
needs fiscal stability. The program provides the competitive
driver for infrastructure and crew development. When a
commitment is made by a legislature, as was the case in 2008,
and again in 2011, the private sector moved forward and invested
millions of dollars. Uncertainty with Alaska's commitment to
industry has many investors putting everything on hold until the
fiscal uncertainty can be addressed.
3:56:54 PM
MR. CROCKETT said he is keenly aware of how the current and new
Film Production Incentive program works. He commended
Representative Costello, her staff, and the many legislators
that had the vision to create a more Alaska-centric program
during the 27th Legislature. He detailed improvements to the
program, including the non-resident above-the-line workers, such
as producers, directors, actors, and screenwriters, incentive
was reduced from 30 to 5 percent. Second, the resident hire
incentive increased from 10 to 20 percent, which means the more
Alaskans hired the more benefits the company receives for above-
the-line workers. Third, productions must spend all dollars in
Alaska and prove to the state that the film they prequalified
for remains the same when applying for final application. Those
dollars circulate throughout the economy and are compounded by
the productions direct spend - the suppliers spending to
restock, and wages each crew spends while visiting or living in
Alaska before a tax credit is even issued. Fourth, a cabinet-
level review of all projects is performed to ensure the best
interest of the state in residence. This review process will
occur in the pre-qualification phase, as well as the final
application phase. This includes a verification of Alaska
expenditures in a 99 percent sampling by a third-party certified
public accountant at production expense, which is more than any
other state.
MR. CROCKETT continued and stated that productions must submit a
non-refundable application fee assessed at two-tenths percent of
the total estimated qualified Alaska spend, except that the fee
must not be less than $200 or more than $5,000. Taxes and fees
are also collected through business licenses, business
registration fees, application fees, rental car taxes, and hotel
bed taxes. Tax relief to Alaska businesses occur through the
tax credit purchase thereby creating more capital to make
additional investments or hire additional Alaskans. To date,
industries that have purchased tax credits include mining,
tourism, fishing, banking, and retail. A 2012 legislative audit
by Northern Economics demonstrates that the Alaska Film
Production Incentive Program generated an estimated $2 in
economic output for every $1 in tax credits. He thanked members
for taking the time to address this important issue. In
closing, he urged the committee not to move HB 112.
3:59:47 PM
KATIE JOHNSTON began her testimony by informing the committee
her husband is a filmmaker and her family loves Alaska and wants
to continue to live in a state they call home. Her husband has
been a filmmaker since he was eight years old and has a passion
for it unlike any she has ever known. In order to follow his
dream, they left Alaska and moved to the Lower 48 to continue
his education. When the Alaska Film Production Incentive
Program passed they were thrilled since this was their ticket to
come home. When he graduated with a Master's Degree in
filmmaking, the family returned home to Alaska. She said, "This
is where we want to put our talents to work. This is where we
want to raise our children. And this is where we want to put
down our roots." She offered her belief that the Alaska film
incentive has allowed them to do just that and is crucial to
keep film and television production in Alaska and to keeping
Alaska's talent at home. This is not about the glamour of
Hollywood. This is about a growing industry of talented men and
women who want to work. She urged members not to send her
family to places like British Columbia, Michigan, and Louisiana
to do for those state's economies what they could do by staying
in Alaska and helping Alaska's economy.
4:01:26 PM
BRAD SWENSON, Chief Executive Officer (CEO), Crooked Pictures,
stated that Crooked Pictures is an award winning Alaska-based
film company that to date has not applied for any film credits.
He provided his film background and related that in 1991, he
moved to Alaska looking for opportunities. Eighteen years
earlier, his uncle, Rick Swenson, had moved to Alaska and became
a five-time Iditarod champion. "It worked out well for his
uncle, so why not give it a shot," he said. Like the Robert
Service poem, the first winter was hell. After the first winter
he met William Bacon III, arguably one of Alaska's greatest
filmmakers. The opportunity continued when he was asked to edit
his film, Tibet - a Moment in Time. This led him to be the
international product manager for Professional Editing Systems -
Fast Multimedia in Munich Germany. After the company sold the
technology to Avid [Technology, Inc.], he moved back to Alaska
and continued making films with Bill until his retirement. He
then joined Levi Taylor and his company, Crooked Pictures,
during the creation of his short film Way Up North that won the
Beverly Hills Film Festival in 2009 for best editing and best
short film. That film used 150 Alaskan actors, crew, and
artisans. Many of these people have gone on to work on other
feature films and other projects in Alaska. Crooked Pictures
has continued working on Alaska's films and stories and in 2012,
produced three short films, plus an hour long docu-drama. He
emphasized this company uses crew that has been trained on the
projects filmed in Alaska, which he characterized as
professional crew who hone their skills daily on projects coming
to Alaska as a result of the Alaska Film Production Incentive
Program. He offered his belief that this program is working.
In fact, the obvious audit results of a two-to-one ratio benefit
shows this program is bringing money and work to Alaska. He
stated that Alaska's film industry is a growing industry. He
applauded the legislature for creating opportunities for
Alaskans. In essence, there is no reason to stop this
partnership now, and therefore he said his company looks forward
to working in partnership by moving the program forward, not
restricting economic growth, and to end HB 112. He said he
looks forward to continuing in the great tradition of
storytelling.
4:04:48 PM
STEVE RYCHETNIK, Cinematographer, Sprocket Heads, speaking as a
filmmaker in Alaska since 1977, he related support for the
Alaska Film Production Incentive Program. Prior to the film
incentive program, he was faced with relocating to another
state. In 2010, he was hired as a first unit camera operator
for Everybody Loves Whales. He was also the sole camera
operator for the second unit that shot film in Barrow and
captured the local color of the community, which are images that
give the film its authenticity. He said when the Nicolas Cage,
John Cusack film, Frozen Ground was filmed, he worked as the
first unit cameraman and was the second unit director of
photography. Most recently, he has been asked to be director of
photography on December Echoes, an independent film to be shot
in Fairbanks and Anchorage. Years ago he scouted locations with
Batman director, Christopher Nolan as Mr. Nolan prepared to
shoot his Alaska-based thriller Insomnia [2002]. He offered his
belief that Mr. Nolan wanted to shoot his film in Alaska, but he
had to take it to British Columbia since Alaska did not offer
film incentives. He said, "Incentives always trump location."
Currently, Sprocket Heads is working with over 10 feature films
in various stages of development that want to shoot in Alaska.
One project of note is a military action series already approved
by the U.S. Department of Defense (DOD), which is a series that
will put down roots and give Alaska the steady economic infusion
like the Netflix produced House of Cards provided for Maryland.
While making motion pictures is hugely rewarding, the best part
of the Alaska Film Production Incentive program is for him to be
able to provide for his family while living in the place he
loves. He stated that he sees a brighter future for Alaska if
the Alaska Film Production Incentive program, which was signed
into law, is allowed to continue to 2023. In fact, the Alaska
State Legislature needs to keep its word, to keep the promise it
made to Alaska's businesses and Alaskans when it extended the
program to 2023, he emphasized.
4:07:41 PM
MIKE DEVLIN, Chief Executive Officer, Evergreen Films, stated
that Evergreen Films an Alaska-based film company with state-of-
the art 3-D production studios in both Anchorage and Los
Angeles. He provided his brief background in the software
business, noting that after graduating from the U.S. Air Force
Academy and Stanford University in computer science, he created
a software company called Rational Software. He and one of his
classmates grew this company from two employees to over 4,000
employees generating over $800 million in revenue. In 2002, his
company was purchased by IBM for $2.1 billion. In 2005, he came
to Alaska to start a new company focused on family-oriented
high-end feature films. In fact, currently he is in post-
production on his first theatrical release, Walking With
Dinosaurs 3-D, which is a co-production between Evergreen Films
and BBC Earth. He said that 20th Century Fox is releasing this
film in December 2013 and he anticipates the film will be a
worldwide blockbuster film. This film was shot in Girdwood, the
Kenai Peninsula, and New Zealand. Additionally, his company has
currently invested over $6 million in a film production facility
and these investments are not eligible for tax credits. If
HB 112 passes, this investment will need to be written off.
Therefore, he said he will need to relocate his operations
outside Alaska, as part of his responsibility to his
shareholders, although he would prefer to continue production in
Alaska. He related that he has produced high-paying jobs and
would like to do so again. However, he pointed out there is a
fine line between success and failure and the film incentive
program creates a level playing field to allow companies to work
in Alaska.
[HB 112 was held over.]