Legislature(2007 - 2008)SENATE FINANCE 532
02/28/2008 09:00 AM Senate FINANCE
| Audio | Topic |
|---|---|
| Start | |
| HB273 | |
| SB230 | |
| HB61 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 273 | TELECONFERENCED | |
| += | SB 230 | TELECONFERENCED | |
| += | HB 61 | TELECONFERENCED | |
| + | TELECONFERENCED |
SPONSOR SUBSTITUTE FOR SENATE BILL NO. 230
"An Act establishing the film office in the Department
of Commerce, Community, and Economic Development; and
creating a transferable tax credit applicable to
certain film production expenditures incurred in the
state."
Co-Chair Hoffman MOVED to adopt the Work Draft to SB 230,
25-LS1275/V, 2/28/08, Bullard.
Co-Chair Stedman OBJECTED.
9:50:51 AM
DARWIN PETERSON, STAFF, SENATOR STEDMAN, addressed the
changes in CSHB 273:
· Page 1 includes a title "and providing for an effective
date".
· Page 2, line 5 inserts a new section requiring the
credits to be used within 3 years.
· Page 2, line 29 added sections (c) and (d) requires the
commissioner to appoint the director of the film office
from a list of five names provided to the commission by
the Alaska Film Group. The intent is to make sure that
there is partnership between the public and private
sector to ensure success of the office.
· Page 3 line 9, increases the qualifying expenditures
from $50,000 to $100,000. Additional language
clarifies that the $100,000 has to be reached within a
consecutive 24 month period.
· Page 3, line 12, subsection (b) provides a list of
productions that are not eligible for the credit.
Three productions were removed from that section which
takes them from the ineligible list, thereby making
them eligible for the credit. The three productions
removed are: finance, talk and game shows, sporting
events and award shows.
· Page 5, line 25 provides a list of expenses that
qualify for the tax credit. The cost of state and
municipal taxes levied on rental cars and lodging was
added as a qualified expense.
· Page 5, line 29, subsection (b) is a list of
expenditures that do not qualify for credit. The
addition to that list is on page 6, line 9;
compensation and wages paid to a highly compensated
individual, (defined on page 10).
· Page 6, lines 16 & 18, definitions for "commissioner"
and "department" were added.
· Page 6, line 28 is repealer language due to the 5 year
sunset for the tax credit.
· Page 7, line 9 establishes the July 1, 2013 sunset
language and transition language. Lines 1-8, allow a
company to receive the tax credit if they qualify prior
to the sunset date.
Senator Elton asked about a change on page 2 regarding the
hiring from a list provided by the Alaska Film Group. He
registered concern that a special interest group would
prepare the list and the commissioner was limited to hiring
from that list. He was unaware of any other authority
within government employing this form of hiring.
Mr. Peterson said the previous film office had not been very
successful. He explained that it is important that those
hired for the position have an understanding of the film
industry and the ability to establish and maintain a
relationship with the private sector.
9:56:57 AM
Senator Elton said there are many positions that require an
ability to work with the private sector. He said he
appreciated the reason for the accommodation, but was still
uncomfortable with the change. He felt that it is the
responsibility of the commissioner to resolve employee
problems as well as hire adequately qualified staff.
Senator Ellis said he appreciated the work of the Committee
and that there has been a good collaborative process.
Co-Chair Stedman said he felt that there has been success
with the fish tax credit. The bill is an attempt to provide
the same incentive to the film industry. The sunset date
allows the legislature to review credits and the potential
impact to the state treasury. It will allow them to
determine if there is a benefit from the provision.
9:59:25 AM
Senator Ellis said there have been over 75 letters of
support for SB 230 including, cities, native corporations,
municipal conferences, University of Alaska, labor, and
business groups.
Co-Chair Hoffman referenced page 6 line 25 and pointed out
that Bethel would not be considered rural under the
definition. He asked where "rural" is referred to in the
bill.
10:01:11 AM
Senator Ellis said SB 230 uses the standard definition of
"rural" from other statutes. He said he would be open to a
change if some adjustment needed to be accommodated.
Co-Chair Hoffman said he thought the overall definition
should be addressed at some point. He stated the community
had grown over the years, changing the rural status. He
wondered if there were other rural communities in a similar
situation. He asked the sponsor to identify the reference
to rural in the legislation.
Senator Stedman was uncertain as to why Juneau would be
included in the definition and Bethel would not be included.
Senator Elton said he understood rural to be defined as "not
connected by road or rail". The Alaska Marine Highway is
not considered road and that is why Juneau would qualify as
rural even though the population is over 30,000. He thought
the reason for the distinction within the provision was to
address the higher costs of production in rural areas.
MAX HENSLEY, STAFF, SENATOR JOHNNY ELLIS, clarified that on
Page 4, lines 13 & 14 provide for an additional 2 percent
credit above the base credit, for qualified expenditures
made in rural areas.
Co-Chair Hoffman said he found no need to address the
definition in SB 230.
10:03:04 AM
Senator Elton addressed the issue of defining "rural". He
noted that under the definition Juneau could qualify for the
credit and Bethel may not. He thought that was odd as the
costs for production would likely be much higher in Bethel.
Mr. Hensley referenced page 6, line 25, which defines rural
as a community with a population of 1,500 or a community
with 5,500 or less that is not connected by road or rail to
Anchorage and Fairbanks.
10:05:17 AM
MARK BRINSTER (Testified via teleconference), in support of
SB 230. He explained that when film makers come to Alaska
they do not hire Alaskans. He felt this could be addressed
by providing incentives to hire qualified local Alaskans.
He questioned the allowed "qualified expenses" and explained
that many of the expenses are not within the local economy.
10:10:17 AM
TERRI GOTTSTEIN (Testified via teleconference), in support
of SB 230. She endorsed comments regarding the
diversification of our economy. She pointed out that film
location selections are driven in two ways, by story; and by
business. Alaska can do some things to promote story there
are a number of things the state can do to promote business.
She pointed out that the longer daylight hours provide the
opportunity to shoot more footage in a day. She also
pointed out that the cost of filming in Alaska is less than
in Canada due to the value of the dollar.
10:13:08 AM
PAM FOREMAN (Testified via teleconference), in support of SB
230 and provided examples of missed opportunities due to a
lack of tax credits available to producers. She urged
passage of SB 230.
SANDY LORRIGAN, DIRECTOR, SITKA CONVENTION AND VISITOR
BUROUGH (Testified via teleconference), in support SB 230.
She provided examples of missed opportunities to for Alaskan
productions. She underlined the importance of film tax
incentives to attract film makers to Alaska.
REED STOOPS, LOBBYIST, MOTION PICTURE ASSOCIATION, testified
in support of SB 230. He explained that ten other states
adopted similar legislation in the last year. He said both
the tax credit and the reinstitution of the film office will
encourage film production in Alaska.
AT EASE: 10:18:54 AM
RECONVEINE: 10:20:54 AM
Co-Chair Stedman noted a previous concern by Senator Elton.
10:21:27 AM
Senator Elton MOVED to adopt a conceptual amendment to
reflect that the commissioner "shall" consider appointing
the director of the film office from a list of 5 candidates
submitted by the Alaska Film Group. This allows for the
submission of names, but does not limit the commissioner's
ability to hire outside of the list. Senator Ellis felt that
the conceptual amendment was a reasonable compromise.
There being NO OBJECTION, the conceptual amendment was
adopted.
Co-Chair Hoffman MOVED to REPORT CSSB 230 out of Committee,
as amended, with individual recommendations and accompanying
fiscal notes. There being NO OBJECTION, it was so ordered.
CSSB 230(FIN) was REPORTED out of Committee with a "do pass"
recommendation and with a new zero fiscal note by the
Department of Revenue and with a new fiscal note by
Department of Commerce, Community and Economic Development.
10:23:40 AM
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