August News

Tax Incentive Update

Following is a letter from Mike McGinn, current present of the Arizona Film & Media Coalition (AFMC) regarding efforts to gear up for next year’s legislative session with the presentation of a new motion picture tax incentive program.

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To the Arizona film community,

As we get further into the summer and further removed from the disappointing campaign to change and extend the Arizona film tax incentive program, I thought I should provide an update on what has been happening and what appears to be the course of action before us.

While enjoying cooler climates on my vacation this summer, I continued to work with various groups and Senators to lay the groundwork for the next chapter in the Arizona film incentive saga. There have been numerous meetings, conference calls and open forums to build on and expand the support and progress we made last spring.

As a result, we will have a draft of a new Bill ready for review the first week of September. It is modeled on SB 1409, the Bill from the last session with changes and improvements.

It is also a consensus bill in that the components were approved after a long series of meetings and compromises by the various groups working to enact new motion picture tax incentives. I know from being at nearly every meeting from November of last year through today that the new bill’s components are a vast improvement from the existing law.

That said, no agreement, bill or law that is a compromise could incorporate the views or goals of the various groups represented in their entirety. This bill has pieces of each group’s wants and needs. The draft bill that will be available next week is a starting point. It may change in many ways in the coming months and during the next legislative session.

Some of the items included are: Making the program a rebate instead of a tax credit, putting TV series at the front of the line after their first year of production, expanding the expenses that qualify and putting a time line and process in place for submitting paperwork after filming has been completed.

These are just some of the changes. I encourage you to look at the AFMC web site in the coming weeks for a posting of the draft bill.

The AFMC is having elections in September, and that means someone else will be leading the charge for the next year. It will be hard to not be at the forefront of this fight. I have always fought for the best interests of the Arizona film community and you, the members of that community.

Thank you for the support you have shown to the AFMC and all you have done to help us make Arizona the best filming destination it can be.

Sincerely,

Michael McGinn
President AFMC
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Photos Still Needed for 2011 Arizona Production Guide

The APA is still accepting location and recent (within the last calendar year) still photos shot on set for publication in the 2011 printed version of the Arizona Production Guide. Photos must be submitted on disk and have a minimum print resolution of 300 dpi. Please include photo credit info. Please note that submitters must have permission to publish and reproduce any photos submitted for consideration.

Please mail all disks to APA or drop off at:

6615 N. Scottsdale Road, Suite 101
Scottsdale, AZ 85251

APA Polls Candidates on Arizona Film Industry

Now that the primary is over, APA is sending out information on the benefits of the current MOPIC program and a brief survey to all of the remaining candidates to determine whether or not each candidate feels informed on the local production industry and would support a new tax incentive program in the upcoming legislative session. Each packet contains the highlights of the independent review completed last year by ESI Corporation, info on where they can find the full report, and a return envelope to send back their completed surveys.

Thanks to APA Board Member and Past President Randy Murray for heading up this effort. We’ll keep you posted on the results prior to the general election.

Two New Motion Picture Tax Incentive Bills Introduced

TWO NEW competing tax incentive bills were introduced in the 2010 legislative session. Both Bills were sponsored by developers who wish to build or already have studio sites in Arizona. Both would have replaced the existing incentive program. Neither bill was introduced by the local production industry.

SB1420 was closest to our existing incentive program. Main difference upon first glance is that "For taxable years beginning from and after December 31, 2010, a credit is allowed against the taxes imposed by this title for motion picture production costs paid during the taxable year by a motion picture production company that are directly attributable to the production of one or more motion pictures.  The amount of the credit is equal to twenty per cent of the amount of qualified production costs incurred in production activities as certified by the department of commerce pursuant to section 41-1517, but shall not exceed twenty million dollars with respect to any individual production." This Bill died early in the process, and remaining efforts were poured into SB1409.

SB1409 was a little more complex, but your editor’s summary is that it would have made lucrative incentives available to production companies who go through “privately funded production facilities” in Arizona (.i.e STUDIOS built in this state) and lesser incentives for those that did not. Any amount of credit that exceeded the taxes due could have been issued as a REFUND to the production company, and any unclaimed credit could have been sold or transferred under certain conditions.

The AFMC (Arizona Film & Media Coalition) the group that represents our local industry for lobbying for tax incentives for us, was originally opposed to this Bill. However, on Thursday, February 18, the groups behind the Bills met with representatives from the Tucson and Phoenix Film Offices and the AFMC (Arizona Film and Media Coalition). They agreed to change the language of SB1409 to make it more agreeable to the local production community representatives. As a result, the AFMC added its support to this Bill. An amendment to the Bill was heard on February 23 by the Senate Commerce and Economic Development Committee, and the amendment PASSED through this committee.

Read the full description here: SB1409

To read the amendment to SB1409, CLICK HERE.

To assist the AFMC in its efforts, VOLUNTEERS from the APA produced a video to show to legislators that demonstrates the positive impact that our CURRENT program has had in Arizona. Many APA members donated their equipment and talents to produce this piece, and copies of the finished DVD were handed out to legislators the week of March 22.

To view the Tax Incentive Video on YouTube, CLICK HERE.

SB1409 passed through the Senate Rules Committee with amendments on Thursday, March 25. It then went to the Senate floor, where it initially failed. A second vote was held on April 6, and this time it passed through the Senate and was sent on immediately to the House of Representatives. It passed unopposed through the House Commerce Committee, which requested additional amendments be made to the Bill. After the amendments and due to considerable efforts on behalf of Mike McGinn of the AFMC and the bill's sponsors, it also passed through the House Rules Committee.

In fact, it passed through all of the House Committees. The only thing left was to have the Speaker of the House, Kirk Adams, put it on the agenda for a final vote. Unfortunately, Mr. Adams failed to put this Bill on the agenda, so it died at the close of the 2010 legislative session.

In July a forum was held at Collins College in Tempe to start the discussion going about a new version of this Bill, and input was sought from the local production industry on what changes should be made in the new version. The hope is that a special session of the Legislature will be called before the end of summer, and that a revised version of a motion picture tax incentive bill can be entered into the special session.

State Park Closures Affect ALL Types of Filming in AZ

Don’t think the state’s budget cuts will affect you and your business? THINK AGAIN. Not only are we in danger of loosing our tax incentive program, which is a big part of why companies come here to shoot in the first place, we’re also about to lose our best FILMING LOCATIONS – our STATE PARKS. As these parks CLOSE, we lose a vast majority of the scenic photo opps we have to offer for motion pictures, commercials and still photography. So even if you don’t work in “film” and rely on commercial production, your clients won’t have those locations either. When a park closes, filming is NO LONGER ALLOWED on that land.

Following is a compilation of information we received from Ken Chapa of the Arizona Film Office, which technically NO LONGER EXISTS, as no funds were allocated in this year’s budget to keep it open. He was responding to questions asked at APA’s Annual Membership Meeting on January 19:

“Julie, this is a response to the question that came up at last night’s APA meeting about accessing closed State Parks. This came directly from the Public Information Officer’s office.
 
‘The protocol is that if the park is closed no one can enter. We wouldn't have staff for management of any film on site. I would take each request to the Director and she would evaluate the situation individually. That is how we are handling everything right now.’
 
Believe me when I state that this is not an easy decision for the parks, but simply something they have to do in order to deal with current circumstances.
 
In the meantime, anyone wishing to film at a closed State Park should contact me immediately and be prepared to write a 1-2 page outline of the project detailing crew size, time needed on location (including set up and strike), product/client, etc. Until I get a better sense of how this process will work we are going to need to treat each request as formally as possible.
 
I've received a few emails about hiring "off duty" rangers. I don't see how this will be possible as State Parks reduced their staff by nearly 2/3, meaning the rangers that were designated to the impacted parks were most likely dismissed. I'm still trying to figure out a creative solution that won't impede production, but in the meantime we will have to follow the protocols the Parks PIO office outlined above.

The following parks will remain open:

Buckskin Mountain State Park in Parker
Catalina State Park near Tucson
Cattail Cove State Park in Lake Havasu City
Dead Horse Ranch State Park in Cottonwood
Fool Hollow Lake Recreation Area in Show Low
Kartchner Caverns State Park in Benson
Lake Havasu State Park
Patagonia Lake State Park
Slide Rock State Park in Sedona

The closures to the other parks have already started. The next round of closures will begin in late February and then the final phase occurs in March.

Please visit the State Parks Website for more information: http://azstateparks.com/press/2010/PR_01-15-10.html

Regards,
Ken Chapa
Executive Director, Arizona Governor's Film & Television Commission
Business Attraction Manager, Arizona Department of Commerce
Office: 602.771.1116   Cell: 602.541.0781   Fax: 602.771.1211
Email: kenc@azcommerce.com Web: www.azcommerce.com”

Since we no longer formally have a state film office, Ken has been doing the work of the film office on a VOLUNTEER basis.

The Phoenix Film Office is also is danger of being shut down if the incentive program is not renewed. It has posted two reports to its web site – one on the economic impact of all types of filming to the Greater Phoenix area in 2009 and another on the impact that the MOPIC program had in Phoenix. Read those reports at: http://phoenix.gov/econdev/filmphx/

January News

2010 APA Board of Directors

These results will also be published in the next issue of our printed newsletter, On the Arizona Set. Our Board contact page here on the web site has been updated with all contact info.

To access the old news page, click here.