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.]