New Production Incentive Bill Introduced!
Among the first bills submitted as the 2009 legislative session opens

A proposal to revamp and expand the state's film and television production incentive program was introduced during the opening day of the 2009 session of the Colorado General Assembly Wednesday, January 7.

Production industry representatives plan a noon rally on the capitol steps January 14 to show support for the proposal, which a University of Colorado study concludes would create permanent new primary jobs and spur economic development in the state.

The proposal, House Bill 1010, would create a 20 per cent production tax incentive, remove restrictions in the current program, expand the incentive to the creation of video games and industrial productions, and establish a permanent film office within state government.

Colorado Film and Video Association president Sarah Beatty said the CFVA strongly supports an expanded incentive program to bolster the state's production industry, create permanent jobs and generate needed economic activity.

"Especially in this difficult economic climate, a bigger, more vibrant film and video production industry will provide hundreds of high-paying jobs," Beatty said. "We know from the hundreds of small businesses that list in our Colorado Production Resource Guide that many, many related businesses like hotels, ranches, caterers, and even helicopter companies benefit from the industry as well."

During the last session of the Legislature, the House Finance Committee killed a similar proposal to expand the state's current incentive program, which is considered too small and restrictive to be effective.

The new bill was sponsored by Reps. Tom Massey, R-Poncha Springs, and Anne McGihon, D-Denver. The primary Senate sponsors are Sens. Dan Gibbs, D-Silverthorne, and Nancy Spence, R-Centennial. The bill was introduced in the House, where it must pass before going to the Senate for consideration. Hearings on the measure will be scheduled before a House committee in the near future.

A special legislative task force made up of industry and legislative representatives developed the new proposal during the past nine months.

The incentive proposal faces tough sledding as legislators will be forced to cut state spending by $600 million because of revenue shortfalls caused by the current economic downturn.

"This is going to be one of the hardest legislative sessions in the past decade to get any bill that requires money to get passed," said Colorado Film Commission Executive Director Kevin Shand said in an email statement.

He said he expects the bill will be amended to make it "revenue neutral," which means supporters of the bill must be able to show that the state will receive one dollar back in tax revenue for every dollar spent on the incentive.

"We have been told by many people at the capitol that revenue neutral is the only way our bill, and others, will get a fair hearing and get passed" Shand said.

For example, if the state expends $10 million in production incentives in any given year, budget analysts need to show the state treasury will receive $10 million back in tax revenue generated by the production's economic activity.

Colorado currently provides a 10 per cent cash rebate on production expenditures made within the state, but with restrictions that make it difficult for Colorado to compete with other states.

Colorado's existing incentive program requires production companies to spend at least 75 per cent of their budgets within the state and mandates that 75 per cent of the production crews must be Colorado residents, which disqualifies virtually every out-of-state production company. Both of these requirements are eliminated under the new proposal.

The new proposal streamlines eligibility requirements. Any production company spending $250,000 or more in the state would be eligible for the proposed incentive. Currently, in-state production companies need to spend at least $100,000 in the state and out-of-state companies must spend at least $1 million in Colorado to be eligible for the rebate.

Instead of a direct cash rebate, the proposed bill would provide a transferrable tax credit equal to 20 per cent of the eligible local expenditures. This means the production company could sell its tax credit at a discount to some other company that owes taxes to the state of Colorado.

Key elements of the proposed incentive bill:

• Creates a 20 per cent transferrable tax credit for eligible in-state production expenditures.
  
  
• Establishes a Colorado Office of Film, Television and Media within the state Office of Economic Development to promote the state as a location for feature films, television shows, still photography, music videos, television commercials, video games and other "emerging mass media projects." (The current state film office is a non-profit organization which receives state funding.)
  
  
• Expands incentive eligibility from film and episodic television productions to include video game productions.
  
  
• Expands the venues for viewing eligible production from theaters, television and home markets (DVDs) to include "industrial, corporate, or institutional use."
  
  
• Eliminates the requirement that 75 per cent of the production budget be spent in Colorado.
  
  
• Eliminates the 75 per cent local hire requirement.
  
  
• Caps eligible salaries for featured actors, directors and other crew members at $3 million each, and only if Colorado income taxes are paid on the eligible salary component.
  

--Dick Schneider
Copyright ©2009 by the Colorado Film & Video Association. All rights reserved. To see the CFVA's policy on reprinting eBulletin articles, or to make a request to re-use any portion of this material click here.

Showing Your Support for the New Film Incentives Bill!

Everything you ever wanted to know about contacting your legislators!

Your CFVA has been encouraging you to contact the Governor's office and your State Senator and Representative to show your support, and the information here will tell you exactly how to do that and what to say.

All you have to do is pick up the phone!

It actually will make a difference in how legislators respond to this bill if they hear from you!

Please consider making the six calls outlined below these first few weeks of January.

These are tough economic times, but our industry can bring jobs to Colorado quickly; that's good for us and good for the state.

WHO SHOULD I CALL?

1. Governor Ritter's Office at 303-866-2471
   
   
2. Your State Senator and House Representative.
   If you don't know yours, go here to find your House and Senate information by simply entering your zip code.
   
   
3. ANY three people from the lists below (and more if you want to). These legislative leaders and committee members are the folks most likely to be raising their hands for or against film production incentive legislation. It's important that they hear from the grassroots!

WHAT SHOULD I SAY?

Be friendly, courteous and to the point that you are calling because performance-based film incentives are important! Here's a sample script:

Hi, my name is _____. I am calling you because I am a (producer, gaffer, director etc.) in the film industry (OR a business owner who would benefit it the film industry were revived in Colorado, OR interested in rebuilding the film and production industry in Colorado) because I believe we need to diversify our economy. The film industry will bring jobs and development. I would like to ask for your support of House Bill 09-1010 which gets Colorado on that path again. It is non-partisan, and was introduced by Rep. Tom Massey. THANK YOU!

WHAT IF THEY ASK ME A WHOLE LOT OF QUESTIONS I DON'T KNOW THE ANSWER TO?

They won't. But here a few basics facts you might want to know.

The Bill's sponsors this year are Representative Tom Massey (R), Representative Anne McGihon (D), Senator Nancy Spence (R), and Senator Dan Gibbs (D).

The Leeds School of Business at CU has just completed a study on the impact of film incentives on the Colorado economy and public revenues, which backs up this proposed legislation with solid data! (Look here to read it yourself!)

For further information, refer them to Kevin Shand or Marcia Morgan at the Film Commission, 303-592-4065

LEGISLATORS TO CALL FOR SUPPORT OF PERFORMANCE BASED PRODUCTION INCENTIVES

CALL ANYONE ON THIS LIST. THOSE APPEARING OVER YELLOW SPONSORED SOME OR ALL FILM LEGISLATION LAST YEAR. IT'S TOTALLY FINE TO CALL THEM THIS YEAR, JUST REMEMBER TO THANK THEM!