Legislature(2011 - 2012)BARNES 124

02/15/2011 10:15 AM House ECON. DEV., TRADE & TOURISM


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10:19:53 AM Start
10:20:15 AM Discussion on Planned Closure of the Kenai Liquefied Natural Gas Plant
11:21:17 AM HB67
11:45:02 AM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ Discussion on Planned Closure of the Kenai TELECONFERENCED
Liquified Natural Gas Plant
-- Testimony <Invitation Only> --
+= HB 67 FILM PRODUCTION TAX CREDIT TELECONFERENCED
Heard & Held
-- Public Testimony --
+ Bills Previously Heard/Scheduled TELECONFERENCED
               HB  67-FILM PRODUCTION TAX CREDIT                                                                            
                                                                                                                                
11:21:17 AM                                                                                                                   
                                                                                                                                
CHAIR HERRON announced  that the next order of  business would be                                                               
HOUSE  BILL  NO.  67,  "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."                                                                                                                          
                                                                                                                                
REPRESENTATIVE FOSTER introduced Amendment 2, labeled 27-                                                                       
LS0356\A.2, Bullock, 2/14/11, which read:                                                                                       
                                                                                                                                
     Page 2, following line 5:                                                                                                  
     Insert a new bill section to read:                                                                                         
        "* Sec. 4. AS 44.33.235(c) is amended to read:                                                                      
          (c)  In determining the amount of the tax credit,                                                                     
      the percentage provided by (b) of this section shall                                                                      
     be increased by the film office based on the following                                                                     
     criteria:                                                                                                                  
               (1)  an additional 10 percent of qualified                                                                       
     expenditures that are wages paid to Alaska residents;                                                                      
               (2)  an additional four [TWO] percent of                                                                     
     qualified expenditures made in a rural area; and                                                                           
               (3)  an additional two percent of qualified                                                                      
      expenditures made in the state between October 1 and                                                                      
     March 30."                                                                                                                 
                                                                                                                                
     Renumber the following bill sections accordingly.                                                                          
                                                                                                                                
REPRESENTATIVE FOSTER  explained the purpose of  the amendment is                                                               
to increase  the tax credit for  the rural area incentive  from 2                                                               
percent to 4  percent.  He said this will  address the additional                                                               
operational costs and logistical  issues incurred when filming in                                                               
communities of rural Alaska.                                                                                                    
                                                                                                                                
11:22:48 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE OLSON introduced Amendment 3 labeled 27-                                                                         
LS0365\A.3, Bullock, 2/14/11, which read:                                                                                       
                                                                                                                                
     Page 3, following line 9:                                                                                                  
     Insert a new bill section to read:                                                                                         
        "* Sec. 5. AS 44.33.239(7) is amended to read:                                                                      
               (7)  "rural area" means a community with a                                                                       
       population of 1,500 or less or a community with a                                                                        
        population of 6,500 [5,500] or less that is not                                                                     
     connected by road or rail to Anchorage or Fairbanks."                                                                      
                                                                                                                                
     Renumber the following bill sections accordingly.                                                                          
                                                                                                                                
REPRESENTATIVE OLSON explained the purpose of the amendment is                                                                  
to increase the population of an identified rural area from                                                                     
5,500 to 6,500.                                                                                                                 
                                                                                                                                
11:23:21 AM                                                                                                                   
                                                                                                                                
CHAIR HERRON opened public testimony.                                                                                           
                                                                                                                                
11:23:40 AM                                                                                                                   
                                                                                                                                
PETE  KALAMARIDES said  he was  the  local captain  on the  movie                                                               
Everybody Loves  Whales, and  was employed with  a crew  of 30-40                                                               
others.   Mr. Kalamarides expressed  his support of the  bill and                                                               
the  proposed  amendment,  because  the movie  was  a  very  good                                                               
economic  stimulus  for  Anchorage,  and the  cast  was  welcomed                                                               
throughout town.                                                                                                                
                                                                                                                                
11:24:43 AM                                                                                                                   
                                                                                                                                
CINDY  DRAPER, Rentals  Manager,  ABC Motorhome  and Car  Rental,                                                               
Inc., said  her company rented  motorhomes during the  filming of                                                               
Ghost Vision and  Everybody Loves Whales.   These contracts added                                                               
over  1,500 additional  rental days  to their  rental season  and                                                               
made a "significant boost to,  you know, a fairly small company."                                                               
Ms. Draper said she was in favor of extending the tax credits.                                                                  
                                                                                                                                
11:25:41 AM                                                                                                                   
                                                                                                                                
BRICE HABERGER informed the committee  he is a life-long Alaskan.                                                               
He referred to  his past testimony on  legislation supporting the                                                               
creation of jobs.  Mr.  Haberger worked on Everybody Loves Whales                                                               
as  a  production scout  and  as  a grip  on  Ghost  Vision.   He                                                               
expressed his  belief that the bill  will allow Alaska to  grow a                                                               
crew base that  will rival that of any other  state, and one that                                                               
is  technically proficient  and  knowledgeable.   He pointed  out                                                               
that the private  sector has begun training  Alaska residents for                                                               
work in this industry.                                                                                                          
                                                                                                                                
11:28:03 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE  FOSTER asked  whether Mr.  Haberger had  seen the                                                               
films screened at the Alaska Federation of Natives (AFN) events.                                                                
                                                                                                                                
MR. HABERGER said no.                                                                                                           
                                                                                                                                
11:28:21 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE FOSTER urged support for  the work done for AFN by                                                               
students  in the  Lower Yukon  region, and  other areas  of rural                                                               
Alaska.                                                                                                                         
                                                                                                                                
REPRESENTATIVE TUCK asked  how  much  work  the  two  productions                                                               
generated.                                                                                                                      
                                                                                                                                
11:28:52 AM                                                                                                                   
                                                                                                                                
MR.  HARBEGER  said  he  worked   for  about  one  week  on  each                                                               
production.    In further  response  to  Representative Tuck,  he                                                               
explained  that  after  graduating  from  college  in  film,  his                                                               
classmates looked  for work  in Los Angeles,  but he  is pursuing                                                               
his career in Alaska.                                                                                                           
                                                                                                                                
11:30:09 AM                                                                                                                   
                                                                                                                                
TED SMITH  said he  was a  member of the  cast of  On the  Ice, a                                                               
movie that was  filmed in Barrow.  The movie  was screened at the                                                               
Sundance  Film  Festival and  received  excellent  reviews.   Mr.                                                               
Smith said he was in favor  of the bill, because movies create an                                                               
opportunity to introduce the cultures of rural Alaska.                                                                          
                                                                                                                                
11:31:47 AM                                                                                                                   
                                                                                                                                
GARY  ZIMMERMAN,   General  Manager-Statewide,   Avis  Rent-A-Car                                                               
(Avis),  stated  his company  employs  110  residents across  the                                                               
state and  is in  favor of HB  67.    There is  a benefit  to all                                                               
facets  of the  economy  from  filming movies  on  location.   He                                                               
pointed out that a portion of  his company's revenue is the state                                                               
vehicle  rental tax  that goes  to the  state, and  the municipal                                                               
taxes  that  support  communities.   Mr.  Zimmerman  opined  that                                                               
Alaska  needs  to  diversify  its  economy  through  a  long-term                                                               
commitment to the film industry.                                                                                                
                                                                                                                                
11:34:27 AM                                                                                                                   
                                                                                                                                
MAYA SALGANAK,  Assistant Professor of Film/Video  Arts, Director                                                               
of  Film Studies,  University of  Anchorage  Fairbanks, said  her                                                               
responsibility is  to help guide  students interested  in working                                                               
in the  film industry.   The University  of Alaska (UA)  Board of                                                               
Regents is  reviewing a proposal  on whether to begin  a Bachelor                                                               
of  Arts  (BA)  degree  program  in film  by  2013.    Since  the                                                               
establishment  of the  Alaska Film  Office, Division  of Economic                                                               
Development,  Department   of  Commerce,  Community   &  Economic                                                               
Development (DCCED),  there has been  amazing growth in  film and                                                               
she  has  been  able  to  place  students  with  dozens  of  film                                                               
companies  from all  over the  world.   Students  have worked  in                                                               
television  commercials   and  feature  films,  in   venues  from                                                               
Anchorage to  Barrow, and the  program has received  funding from                                                               
various sources.  Student enrollment  in the UAF film program and                                                               
related courses has  grown by 60 percent in the  last four years.                                                               
Ms. Salganek  said tax credits  are the first  consideration when                                                               
the film  industry decides  on a location;  in fact,  without the                                                               
incentive  program  the  long-term  growth  of  the  industry  is                                                               
threatened, even  if the university supports  the availability of                                                               
film crews through a BA program.   She advised that extending the                                                               
incentive program  will solidify the  state's ability to  bring a                                                               
"full-force infrastructure into the state."                                                                                     
                                                                                                                                
11:37:36 AM                                                                                                                   
                                                                                                                                
GREG  KESSLER, Alaska  Commercial Director,  Totem Ocean  Trailer                                                               
Express, Inc.  (TOTE), stated that  in the past year  his company                                                               
shipped  cargo for  two productions,  Everybody Loves  Whales and                                                               
Ghost Vision.   In fact, TOTE moved about 35  shipments north and                                                               
south  for  the  movie  production   companies,  and  is  in  the                                                               
preparation stages for future shipments.   His company and others                                                               
will benefit from  the reauthorization of the  tax credits, which                                                               
will continue  to make  Alaska an attractive  place for  the film                                                               
industry, and  bring new  and diversified  business opportunities                                                               
to the state.                                                                                                                   
                                                                                                                                
11:39:38 AM                                                                                                                   
                                                                                                                                
KAREN  TALLENT, Studio  Teacher, said  she worked  on three  film                                                               
projects  as a  studio  teacher.   As required  by  state law,  a                                                               
studio  teacher provides  education  for, and  ensures the  legal                                                               
protection  and  safety  of,  minors  who  are  involved  in  the                                                               
entertainment  industry.   Ms. Tallent  expressed her  support of                                                               
the  bill  saying  her  experience was  that  the  film  industry                                                               
provides  jobs  for  film   crews,  economic  opportunities,  and                                                               
marketing   promotion   for   Alaska   tourism,   products,   and                                                               
businesses.   She is  now a studio  teacher full-time  because of                                                               
the  increased interest  in  filming  in Alaska  due  to the  tax                                                               
credits.  Forty-five other  states, Canada,  and other  countries                                                               
have incentive programs  in place and it is  important for Alaska                                                               
to have  a viable and  competitive program.   Ms. Tallent  saw at                                                               
least  100 crew  and  2,000 extras  employed  in Everybody  Loves                                                               
Whales  and  related  that  the  out-of-state  cast  shopped  and                                                               
traveled while in  Alaska.  She concluded the film  industry is a                                                               
multi-million dollar  industry that  will diversify  the economy,                                                               
provide jobs, and increase tourism.                                                                                             
                                                                                                                                
11:45:02 AM                                                                                                                   
                                                                                                                                
[HB 67 was heard and held.]                                                                                                     

Document Name Date/Time Subjects
EDT - News Items on Pending Kenai LNG Plant Closure.pdf HEDT 2/15/2011 10:15:00 AM
EDT - LNG Plant Closure Hearing - List of Participants.pdf HEDT 2/15/2011 10:15:00 AM
HB 67 - Letters of Support 021411.pdf HEDT 2/15/2011 10:15:00 AM
HB 67
EDT 2.15.11 RCA Response to Committee Inquiry Cook Inlet Gas Contracts.pdf HEDT 2/15/2011 10:15:00 AM