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.]