Legislature(2011 - 2012)SENATE FINANCE 532

03/21/2011 09:00 AM FINANCE


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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+= SB 18 DURATION OF REGULAR LEGISLATIVE SESSIONS TELECONFERENCED
Moved CSSB 18(FIN) Out of Committee
*+ SB 97 COMMUNITY REVENUE SHARING/EDUC FUNDING TELECONFERENCED
Heard & Held
*+ SB 102 AK AFFORDABLE HEATING PROGRAM PAYMENTS TELECONFERENCED
Heard & Held
+ SB 23 FILM PRODUCTION TAX CREDIT TELECONFERENCED
Heard & Held
+ Bills Previously Heard/Scheduled TELECONFERENCED
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."                                                                                                                 
                                                                                                                                
9:53:22 AM                                                                                                                    
                                                                                                                                
Senator Ellis welcomed MATT MOSER, STAFF, SENATOR ELLIS.                                                                        
                                                                                                                                
9:53:49 AM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
9:53:55 AM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
9:54:31 AM                                                                                                                    
                                                                                                                                
Senator   Ellis  presented   the  PowerPoint   Presentation,                                                                    
"Senate  Bill   23:  Extending   the  Film   and  Television                                                                    
Production  Tax Incentives."  He stated  that welcoming  the                                                                    
multi-billion   dollar   film  and   television   production                                                                    
industry  to  Alaska was  a  rare  opportunity to  grow  and                                                                    
develop a  new industry in  the state. It would  create jobs                                                                    
for Alaskans and  diversify the economy. He  stated that the                                                                    
legislation  would  continue  the   growth  and  success  of                                                                    
Alaska's  developing  film  and  television  production.  He                                                                    
stressed that  the private sector  was needed to  ensure the                                                                    
incremental   capital  investments.   He   felt  that   this                                                                    
legislation  would offer  the private  sector the  certainty                                                                    
that Alaska is open for business.                                                                                               
                                                                                                                                
9:55:11 AM                                                                                                                    
                                                                                                                                
Senator Ellis  stated, "The  film tax  credit passed  by the                                                                    
legislature in  2008 is largely  responsible for  the recent                                                                    
growth in this  industry. Since their inception  in 2008, 15                                                                    
productions   have  received   tax   credits.     These   15                                                                    
productions filmed  in Alaska  for a total  of 910  days and                                                                    
had a total Alaska spend of nearly $15 million dollars.                                                                         
As of January,  2011 there are an  additional 28 productions                                                                    
that are pre-qualified  for Alaska Film Incentives.   If all                                                                    
these productions are completed  they will have an estimated                                                                    
additional  projected Alaska  spend  of  nearly $85  million                                                                    
dollars. This brings the total  projected potential boost to                                                                    
Alaska's  economy   since  2008   to  nearly   $100  million                                                                    
dollars."                                                                                                                       
                                                                                                                                
9:56:31 AM                                                                                                                    
                                                                                                                                
Senator  Ellis  presented  slide   4.  He  stated  that  the                                                                    
projected boost  to the economy  since 2008 was  nearly $100                                                                    
million.                                                                                                                        
                                                                                                                                
9:57:02 AM                                                                                                                    
                                                                                                                                
Senator  Ellis  presented slide  5,  and  stated "This  $100                                                                    
million  dollars   translates  in  to  thousands   of  jobs,                                                                    
opportunities  for  businesses  large  and  small.  We  have                                                                    
already  seen the  benefits of  recent multi-million  dollar                                                                    
productions.  There were  hundreds  of  Alaskans working  as                                                                    
cast  and   crew,  in  jobs   as  varied   as  electricians,                                                                    
carpenters,  truck drivers,  caterers,  security guards  and                                                                    
plumbers.  Mr. Chairmen,  filming and  production has  taken                                                                    
place in 35 communities all over our state."                                                                                    
                                                                                                                                
Senator  Ellis presented  slide  6, and  stressed that  many                                                                    
small business were positively  affected by the legislation,                                                                    
including  ocean cargo  shipping, rental  cars and  RV's, to                                                                    
property rental, construction  work, hotels, restaurants and                                                                    
engineering firms.                                                                                                              
                                                                                                                                
9:57:55 AM                                                                                                                    
                                                                                                                                
Senator Ellis  presented slide 7,  and explained  that there                                                                    
were many  exciting projects in  progress. He  also stressed                                                                    
that there was potential for  training and education in film                                                                    
and    television   production.    He   pointed    out   the                                                                    
infrastructure  around  the  industry  was  so  booked  with                                                                    
shoots,  that they  did not  have  crew enough  to meet  the                                                                    
demands.                                                                                                                        
                                                                                                                                
9:58:51 AM                                                                                                                    
                                                                                                                                
Senator  Ellis  presented  slide   8  and  stated  that  the                                                                    
legislation would extend the  film and television production                                                                    
tax for ten  years, and offered and  additional $100 million                                                                    
dollars in tax incentives for each five-year period.                                                                            
                                                                                                                                
9:59:38 AM                                                                                                                    
                                                                                                                                
Senator  Ellis  presented  slide  9,  and  pointed  out  the                                                                    
legislation would  continue to  bring new money  to Alaska's                                                                    
economy; keep our businesses busy  and put Alaskans to work;                                                                    
and diversify our economy and  grow and develop this new and                                                                    
multi-million dollar business in Alaska.                                                                                        
                                                                                                                                
10:01:25 AM                                                                                                                   
                                                                                                                                
Senator  Ellis  presented  slide  10,  and  noted  that  the                                                                    
legislation  would create  diversification  of the  economy;                                                                    
new  private sector  jobs; new  opportunities for  large and                                                                    
small businesses;  infusion of construction  dollars; public                                                                    
relations; opportunities  in rural  Alaska; and  tax credits                                                                    
for Alaska corporations.                                                                                                        
                                                                                                                                
10:02:05 AM                                                                                                                   
                                                                                                                                
Co-Chair  Stedman  referred to  two  fiscal  notes from  the                                                                    
Department   of   Revenue   and  Department   of   Commerce,                                                                    
Community, and Economic Development.                                                                                            
                                                                                                                                
10:02:49 AM                                                                                                                   
                                                                                                                                
MAYA   SALGANEK,  UNIVERSITY   OF  ALASKA,   FAIRBANKS  (via                                                                    
teleconference), spoke in favor of  SB 23. She felt that the                                                                    
passing  of the  legislation would  encourage further  study                                                                    
and training in film and television production.                                                                                 
                                                                                                                                
10:07:23 AM                                                                                                                   
                                                                                                                                
WANETTA  AYERS,  DEPARTMENT   OF  COMMERCE,  COMMUNITY,  AND                                                                    
ECONOMIC  DEVELOPMENT,  presented  PowerPoint  Presentation:                                                                    
"Alaska Film  Office Program Overview"  (copy on  file). She                                                                    
stated  that there  was  a  desire to  develop  Alaska as  a                                                                    
preferred film destination.                                                                                                     
                                                                                                                                
10:08:17 AM                                                                                                                   
                                                                                                                                
Ms.  Ayers discussed  slide 2,  and stated  that the  Alaska                                                                    
Film   Office  had   five   mandates:   1.  cooperate   with                                                                    
organizations in  the private sector  for the  expansion and                                                                    
development of the film production  industries in the state;                                                                    
2.  promote  Alaska  as an  appropriate  location  for  film                                                                    
production;   3.  provide   production  assistance   through                                                                    
connecting  film directors  and makers,  and producers  with                                                                    
Alaska   location   scouts    and   contractors,   including                                                                    
contractors providing  assistance with  permit applications;                                                                    
4.  certify  Alaska   film  production  internship  training                                                                    
programs and  promote the employment  of program  interns by                                                                    
eligible productions; and 5.  in cooperation with Department                                                                    
of Revenue, administer the  Alaska Film Production Incentive                                                                    
Program.                                                                                                                        
                                                                                                                                
10:08:54 AM                                                                                                                   
                                                                                                                                
Ms.  Ayers discussed  slide 3,  and stated  that the  Alaska                                                                    
Film  Office approached  private sector  collaboration in  a                                                                    
variety of different ways. She  explained that their website                                                                    
was a portal for a  variety of information about the program                                                                    
and interacts with  the Alaska Film Office.  She stated that                                                                    
the   Alaska  Film   Office   was   engaged  with   industry                                                                    
organizations,  trade associations,  and allied  groups; and                                                                    
engaged in  outreach through speaking  engagements, targeted                                                                    
contacts, and fielding daily inquiries.                                                                                         
                                                                                                                                
10:09:51 AM                                                                                                                   
                                                                                                                                
Ms. Ayers  discussed slide  4, and stated  that there  was a                                                                    
variety  of  print  advertising in  magazines,  directories,                                                                    
brochures, and websites to promote Alaska.                                                                                      
                                                                                                                                
Ms.  Ayers displayed  slide 7,  and  stated that  it was  an                                                                    
example of  a customized program brochure  that outlined the                                                                    
production  incentive  and  the  advantages  of  filming  in                                                                    
Alaska.                                                                                                                         
                                                                                                                                
Co-Chair Stedman asked about Alaska  Hire provision, and how                                                                    
it  was implemented.  Ms. Ayers  replied that  there was  an                                                                    
additional  10  percent  credit  for  the  wages  that  were                                                                    
expended in Alaska for Alaska residents.                                                                                        
                                                                                                                                
10:11:21 AM                                                                                                                   
                                                                                                                                
Ms.  Ayers discussed  slide 8,  and stated  that the  Alaska                                                                    
Film  Office  provided  assistance by  responding  to  daily                                                                    
inquiries about filming in  Alaska; conducting follow-up and                                                                    
outreach with contacts  developed through advertising, trade                                                                    
show   and  other   promotional  activities;   meeting  with                                                                    
producers and  providing introductions  to states  and local                                                                    
contacts;  explaining the  Incentive  Program and  assisting                                                                    
producers   with   the    application   process;   providing                                                                    
alternatives   and   creative    solutions   to   production                                                                    
challenges; and  working with Alaskan  businesses, community                                                                    
representative and other  stakeholders regarding prospective                                                                    
projects.                                                                                                                       
                                                                                                                                
10:12:08 AM                                                                                                                   
                                                                                                                                
Ms.  Ayers looked  at slide  9, and  stated that  the Alaska                                                                    
Film  Office  wanted to  increase  hiring  of Alaskans.  She                                                                    
stated  that  hundreds  of Alaskans  had  been  employed  in                                                                    
Alaska.  She   stated  that  they  were   working  with  the                                                                    
Department  of  Labor  with regard  to  some  apprenticeship                                                                    
programs that  could lead to  technical careers in  the film                                                                    
industry. She furthered that the  University of Alaska would                                                                    
provide the academic programs that  lead to certificates and                                                                    
degrees  recognized by  the film  industry. She  stated that                                                                    
private sector efforts would provide on-the-job training.                                                                       
                                                                                                                                
10:14:02 AM                                                                                                                   
                                                                                                                                
Ms. Ayers  detailed Slide 10  and explained the  process for                                                                    
the review of the final  applications. She stated that there                                                                    
was a  pre-qualification process, which required  the Alaska                                                                    
Film Office  to work  with producers.  She stated  that once                                                                    
the pre-qualification  was approved, the  production process                                                                    
ensued.  Once  the  production  expenses  were  incurred  in                                                                    
Alaska,  there  was  an audit,  and  final  application  and                                                                    
approval of the  process. A review committee  that looked at                                                                    
the  final application  and advances  a notification  to the                                                                    
Department  of  Revenue  that   the  final  application  was                                                                    
approved, and the Department of  Revenue would take over for                                                                    
issuing a tax credit certificate.                                                                                               
                                                                                                                                
Co-Chair  Stedman surmised  that there  was an  audit before                                                                    
approval. Ms.  Ayers responded that there  was a requirement                                                                    
for  the production  company to  hire and  Alaskan Certified                                                                    
Public Accountant to audit the Alaska production costs.                                                                         
                                                                                                                                
Co-Chair  Stedman  asked if  the  audits  were current.  Ms.                                                                    
Ayers answered yes.                                                                                                             
                                                                                                                                
10:15:27 AM                                                                                                                   
                                                                                                                                
Ms. Ayers discussed slide 11,  and stated that the displayed                                                                    
chart  summarized  experience-to-date  with regard  to  pre-                                                                    
qualifications that  were approved by fiscal  year since the                                                                    
implementation  of the  film  production incentive  program.                                                                    
She furthered  that slide  12 displayed  a summary  based on                                                                    
pre-qualification.                                                                                                              
                                                                                                                                
                                                                                                                                
10:16:05 AM                                                                                                                   
                                                                                                                                
Ms. Ayers  looked at  slide 13, and  stated that  there were                                                                    
two  staff   positions  in  the  Alaska   Film  Office  with                                                                    
additional support provided by the state.                                                                                       
                                                                                                                                
Ms.  Ayers displayed  slide 14,  and explained  that at  the                                                                    
implementation of the program  conceived $275,000 per fiscal                                                                    
year.  She  stated  that  in the  current  year,  there  was                                                                    
$283,000  added,  but  it  did  not  include  estimation  of                                                                    
additional  support  costs. She  stated  that  there was  an                                                                    
unallocated  overhead  cost  of   $27,800  for  a  total  of                                                                    
$310,800.                                                                                                                       
                                                                                                                                
10:16:49 AM                                                                                                                   
                                                                                                                                
Ms.  Ayers  showed  slide  15,  and  stated  that  the  film                                                                    
industry  was rapidly  evolving.  She  explained that  there                                                                    
were a number  of productions that were ready  to produce in                                                                    
Alaska.                                                                                                                         
                                                                                                                                
Co-Chair  Stedman wondered  if the  Department of  Commerce,                                                                    
Community,  and Economic  Development supported  SB 23.  Ms.                                                                    
Ayers replied yes.                                                                                                              
                                                                                                                                
10:18:54 AM                                                                                                                   
                                                                                                                                
JOHN  RENSE,  SENIOR  OPERATIONS MANAGER,  NANA  DEVELOPMENT                                                                    
CORPORATION, spoke in  support of SB 23. He  stated that the                                                                    
bill would encourage economic diversity.                                                                                        
                                                                                                                                
10:23:23 AM                                                                                                                   
                                                                                                                                
BRICE HABERGER, TRADESMAN, JUNEAU, spoke  in favor in SB 23.                                                                    
He stated  that he provided  scouting services for  the film                                                                    
industry.                                                                                                                       
                                                                                                                                
10:25:31 AM                                                                                                                   
                                                                                                                                
DAVID    GREATHOUSE,     PRODUCER,    WARP     FILMS    (via                                                                    
teleconference), spoke in favor of SB 23.                                                                                       
                                                                                                                                
10:29:55 AM                                                                                                                   
                                                                                                                                
CINDY DRAPER, ABC MOTORHOMES  (via teleconference), spoke in                                                                    
favor of SB  23. She stated that they  provided business for                                                                    
the film, "Everybody Loves Whales."                                                                                             
                                                                                                                                
10:31:00 AM                                                                                                                   
                                                                                                                                
Senator  Ellis  expressed   excitement  for  the  discussion                                                                    
regarding  SB 23.  He looked  forward to  working towards  a                                                                    
committee substitute                                                                                                            
                                                                                                                                
10:31:19 AM                                                                                                                   
                                                                                                                                
Senator Olson wondered  if it was a  surprise how successful                                                                    
the original legislation had  become. Senator Ellis remarked                                                                    
that it was surprising. He  pointed out that there were some                                                                    
skeptics, but the legislation had been successful.                                                                              
                                                                                                                                
Co-Chair  Stedman remarked  that Alaska  was in  an economic                                                                    
upturn,  while  other   states  were  experiencing  economic                                                                    
trials.                                                                                                                         
                                                                                                                                
SB  23  was   HEARD  and  HELD  in   committee  for  further                                                                    
consideration.                                                                                                                  
                                                                                                                                

Document Name Date/Time Subjects
SB 18 Legislation Intro'd_byState.pdf SFIN 3/21/2011 9:00:00 AM
SB 18
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 18 Legislation Passed by State.pdf SFIN 3/21/2011 9:00:00 AM
SB 18
SB 18 New FN LAA Salaries and Allowances.pdf SFIN 3/21/2011 9:00:00 AM
SB 18
SB 18 New FN LAA Session Expenses.pdf SFIN 3/21/2011 9:00:00 AM
SB 18
SB 18 Ratio_Legislation Intro'd to Passed_byState.pdf SFIN 3/21/2011 9:00:00 AM
SB 18
SB 18 Sectional_CS_STA_ version I.pdf SFIN 3/21/2011 9:00:00 AM
SB 18
SB 18 Session Limit Methods.pdf SFIN 3/21/2011 9:00:00 AM
SB 18
SB 18 Sponsor Presentation.pdf SFIN 3/21/2011 9:00:00 AM
SB 18
SB 18 Sponsor Statement.pdf SFIN 3/21/2011 9:00:00 AM
SB 18
SB 18 Support Letter FbksNewsMiner.pdf SFIN 3/21/2011 9:00:00 AM
SB 18
SB 18 Support Letter Juneau Chamber.pdf SFIN 3/21/2011 9:00:00 AM
SB 18
SB 18 Support Letter JuneauEmpire.pdf SFIN 3/21/2011 9:00:00 AM
SB 18
SB 18_ Support Letter_ Fran Ulmer.pdf SFIN 3/21/2011 9:00:00 AM
SB 18
SB 97 2011_03_14 AML reThanks.pdf SFIN 3/21/2011 9:00:00 AM
SB 97
SB 102 Sponsor Statement.docx SFIN 3/21/2011 9:00:00 AM
SB 102
HB 67 - SB 23 Anch. Resolut Sppt.pdf HEDT 2/17/2011 10:15:00 AM
SFIN 3/21/2011 9:00:00 AM
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 Sponsor Statement.PDF SFIN 3/21/2011 9:00:00 AM
SL&C 2/22/2011 1:30:00 PM
SB 23
SB 23 Sectional Summary Version X.pdf SFIN 3/21/2011 9:00:00 AM
SB 23
SB 23 SFIN Version X.pdf SFIN 3/21/2011 9:00:00 AM
SB 23
SB 23 Additional Support Letters.pdf SFIN 3/21/2011 9:00:00 AM
SB 23
SB 23 Markel Letter of Concern.pdf SFIN 3/21/2011 9:00:00 AM
SB 23
SB 97 3 2 11 rev sharing with annual trigger.xls SFIN 3/21/2011 9:00:00 AM
SB 97
SB 97-CCED-DCRA-03-19-11.pdf SFIN 3/21/2011 9:00:00 AM
SB 97
SB 97-EED-ESS-3-20-11.pdf SFIN 3/21/2011 9:00:00 AM
SB 97