Legislature(2015 - 2016)SENATE FINANCE 532
03/24/2015 09:00 AM Senate FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| SB51 | |
| SB39 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | SB 39 | TELECONFERENCED | |
| + | SB 51 | TELECONFERENCED | |
| + | TELECONFERENCED |
SENATE BILL NO. 39
"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."
10:02:50 AM
SENATOR BILL STOLZE, SPONSOR, shared that the legislation
was intended to reign in state spending during the current
fiscal climate. He stressed that he was not making a value
judgement on the product turned out by the film industry.
He believed that the Film Tax Credit should be repealed in
order to cut state expenditures.
10:07:02 AM
DANIEL GEORGE, STAFF TO SENATOR BILL STOLTZE, overviewed
the sectional analysis (copy on file):
As a preliminary matter, note that a sectional summary
of a bill should not be considered an authoritative
interpretation of the bill and the bill itself is the
best statement of its contents. If you would like an
interpretation of the bill as it may apply to a
particular set of circumstances, please advise.
Section 1 removes a reference to the film tax credit
from AS 43.75.130(f), related to the revenue sharing
with local governments of the fisheries business tax.
The effective date of this section is July 1, 2015.
Section 2 removes a reference to the film tax credit
from AS 43.75.130(f) as it is amended in sec. 14, ch.
61, SLA 2014. The effective date of this section is
the same as the effective date of sec. 14, ch. 61, SLA
2014, December 31, 2016.
Section 3 removes a reference to the film tax credit
from AS 43.77.060(e), related to the revenue sharing
with local governments of the fisheries resource
landing tax. The effective date of this section is
July 1, 2015.
Section 4 removes a reference to the film tax credit
from AS 43.77.060(e) as it is amended in sec. 17, ch.
61, SLA 2014. The effective date of this section is
the effective date of sec. 17, ch. 61, SLA 2014,
December 31, 2016.
Section 5 makes amendments conforming with the repeal
of AS 44.25. I 00 - 44.25 .190, related to the film
production incentive program. The effective date of
this section is July 1, 2015.
Section 6 removes a reference to the film tax credit
from sec. 28(b), ch. 61, SLA 2014, (the transition
language of SCS CSHB 306(FIN) am S of the 28th
Legislature) relating to the repeal of the film tax
credit and other tax credits. This section has an
immediate effective date.
Section 7 repeals AS 24.20.271(12) (related to the
duty of the legislative audit division to conduct
audits of the film production incentive program), AS
43.98.030 (film production tax credit), AS 44.25.100 -
44.25.130 (film production incentive program), AS
44.25.140 -44.25.190 (film production incentive
program), and AS 44.33.231(c) (administration of the
Alaska film production incentive program (AS
44.25.110)). The effective date of this section is
July 1, 2015.
Section 8 repeals AS 44.25.135, effective July 1,
2021, allowing six years for the recovery of the film
production tax credit after the credit program is
repealed if the film office determines that the film
producer or production is liable for damages to the
state, or any political subdivision of the state. This
section has an immediate effective date.
Section 9 repeals multiple sections of ch. 51, SLA
2012 and ch. 61, SLA 2014, related to the film tax
credit. The effective date of this section is July 1,
2015.
Section 10 provides transition language for the repeal
of the film tax credit. The effective date of this
section is July 1, 2015.
Section 11 repeals certain sections of ch. 51, SLA
2012, related to the film tax credit. The effective
date of this section is July 1, 2015.
Sections 12 - 15 provide the effective dates for the
bill, noted above. These various dates are necessary
because 2014 legislation will amend some sections in
2016, and to allow recovery of damages after the
program is repealed.
10:09:26 AM
Co-Chair MacKinnon OPENED public testimony.
10:09:54 AM
RONAN P. NAGLE, SELF, FAIRBANKS (via teleconference), spoke
in opposition to the bill. He shared that he was self-
employed and made his living contracting out to production
companies that came to Alaska to create reality television.
He believed that the tax credit was an important factor in
the diversification of the state's economy. He felt that
the industry would not in the state without incentive. He
suggested tying local hire requirements to tax credits. He
said that the show Ultimate Survival Alaska had spent
millions of dollars in the state and believed that removing
the credits would cause production companies to look
elsewhere for filming locations.
10:13:04 AM
JAMES HASTINGS, LAST FRONTIER AVIATION GROUP AND
PATHFINDER, INC., MATSU (via teleconference), echoed the
comments of the previous speaker. He shared that he worked
for a veteran owned and veteran run company. He spoke of
his concerns for smaller local businesses that had
benefited from the incentives.
10:15:21 AM
ELINOR MAYA SALGANEK, DIRECTOR, FILM PROGRAM, UNIVERSITY OF
ALASKA FAIRBANKS, FAIRBANKS (via teleconference), spoke in
opposition to the legislation. She related that the program
graduated its first student in 2012. She said that the
university had worked to develop pathways between students
and the industry and that the work was now just coming to
fruition; the degree program was one of the largest growing
degree programs in the state. She relayed film was second
largest export of the United States and that the funding
available to the industry was astronomical. She believed
that the industry could be a vehicle for Alaska language
and history and should be supported.
10:18:34 AM
ASMERET PAYNE, FILM STUDENT, UNIVERSITY OF ALASKA
FAIRBANKS, FAIRBANKS (via teleconference), testified in
opposition to the bill. She related that she was majoring
in film at UAF and if the incentives were to disappear then
she would have to leave the state as well. She believed
that films made in Alaska, and viewed worldwide, would
prompt more tourism and lead to economic growth. She
believed that the film industry touched on numerous other
industries in a positive way.
10:19:49 AM
CEDAR CUSSINS, CO-OWNER, 49TH STATE MOTOR TOURS, ANCHORAGE
(via teleconference), spoke in opposition to the bill. She
shared that through her husband's work as a contractor on
the film "Big Miracle" he had found a way to earn
significant wages to support their family. She hoped that
the committee would consider the financial impact the
incentives had on families statewide. She concluded that
she understood the reasoning behind putting a freeze on
incentives but hoped they would not be permanently
eliminated.
10:22:48 AM
THOMAS DALY, PRESIDENT, ALASKA FILM GROUP, KENAI (via
teleconference), opposed the bill. He commented that in
order for a new industry to grow in the state it needed
stability; a stable economy required diversification, and
as the state was currently living through the downside of
an economy heavily dependent on one sector, the incentives
were vital. He asserted that the continued changes in the
incentives for the industry created doubt in the minds of
investors. He noted that the incentives were currently on
hold and all state film positions had been terminated,
which meant that passage of the bill would not save the
state any additional money. He said that he had recently
met with film producers in California who had been excited
to film in Alaska, but that a competitive film incentive
was necessary. He opined that the bill would kill new jobs
in technology and destroy a business environment that was
necessary for Alaskan businesses to make decisions for
investment in hardware, training, and infrastructure. He
stressed that there was a plethora of new businesses and
positions that had been created in the state due to the
film industry. He believed that a film program could be
designed that the legislature could support, but that the
legislature needed to define what it believed was a
fiscally responsible rate of return on investment. The last
legislative audit showed a return of $2.10 for each dollar
of tax credit issued and out of the $100 million budget
only $43 million had been issued.
10:26:27 AM
FRANK FLAVIN, FLAVIN PHOTOGRAPHY, ANCHORAGE (via
teleconference), testified in opposition to the bill. He
stressed the importance the industry in the state. He hoped
that the film office would not be closed entirely.
10:29:04 AM
ANDREW MACEBO, SELF, ANCHORAGE (via teleconference), spoke
in opposition to the bill. He said that his business had
benefited greatly from the film industry. He believed that
shutting down the office would send a negative message to
the rest of the world. He felt that the state should
diversify its economic portfolio.
10:31:23 AM
ELMER PEKOALOK, SELF, NOME (via teleconference), spoke in
opposition to the bill. He praised the film tax incentive
as the catalyst for bringing in the movie "Big Miracle." He
related that he had been an actor in the film. He felt that
the industry brought hope to rural Alaska and could be a
positive influence on the high rate of suicide and
depression the area. He highlighted the myriad of jobs
associated with the film industry.
10:34:00 AM
DR. GEORGE GUTHRIDGE, SELF, DILLINGHAM (via
teleconference), spoke against the legislation. He relayed
that he had taught in rural Alaska for 40 years. He thought
that passage of the bill would close the door on future
economic opportunities. He believed that there should be
Alaska hire contingency language added to the legislation.
He shared that he was the coach for the "Kids from
Nowhere", the only Native Americans in history to win the
national championship in academics, and he had written a
screen play about it that had won 5 national awards. He
feared that without the tax incentive program his film
would never be produced. He felt that children in the state
needed to see inspiring film with Alaskan role models.
10:37:55 AM
Co-Chair MacKinnon CLOSED public testimony. She encouraged
testifiers to send any additional testimony to her office.
SB 39 was HEARD and HELD in committee for further
consideration.