Iowa Film Insider

Write the Iowa House of Representatives ....NOW!

2012-02-09T20:02:00.000-08:00

If you read the previous posting by Gene Hamilton about his and Jay Villwock's visit to the capitol, you'll know that we are in a potential crisis situation. A proposed budget of $400,000 for a reincarnated Iowa Film Office is passing through the Iowa Legislature and in the Iowa House some Republicans want to cut it down to $150,000.

Considering that the Film Office has to essentially from scratch after being looted and stripped bare by marauding IDED staffers after it was closed, $150,000 is not only inadequate but an insulting low amount. Computers need to be bought, enough staff needs to be hired, a film guide needs to be reconstructed and a whole new locations database has to be constructed from scratch and these few legislators want to provide the office with pocket change.

Budget cuts were a very strong factor in the decline of the original Iowa Film Office. At one time we had the opportunity to attract films like "Field of Dreams" and "The Bridges of Madison County" but then the budget was trimmed and with that the original head of the office left. When the office needed more money to compensate for the fact that other states were now offering film incentives, the legislator cut resources. The limited resources contributed to it only having a limited salary to offer a Film Office manager, certainly not the conditions to hire the most qualified person. And we all know where that led... And even after than, when film tax incentives complicated things, when it would have been prudent to increase the budget in order to hire someone who knew what they were doing in regards to film tax incentives they decreased the budget almost directly after the passed the legislation bringing these incentives into being.

Yes, the new Iowa Film Office - the new one that will be under the umbrella of Cultural Affairs and will not have tax incentives to complicate things - definitely does need the whole $400,000 in order to get off the ground and become effective at doing its job. If nothing else, it probably needs even more that what is being asked for. If only $150,000 is allocated for it, it will be about like not even having a film office because it will not have the resources to do its job.

Write the members of the House. All of them if you can. Most of them if you must. Most definitely the House Republicans. Show your displeasure for this proposed reduction and let them know that cuts didn't work in the past and they are certainly not a good way to get started this time around.

Here is a link to the page that has email addresses of members of the Iowa House of Representatives:

https://www.legis.iowa.gov/Legislators/house.aspx

Help the Iowa Film Office Plight NOW!!!!!!!!!!

2012-02-09T15:26:00.000-08:00

The Iowa Film Office Needs Your Help NOW!!!

When the Iowa Film Office was shut down, locations files and the production guide disappeared, likely from someone taking computers and erasing all data just so the computers could be used for other purposes. When the Iowa Film Office opens again, those missing files will have to be re-created. New computers will need to be purchased, a great deal of travel will be necessary to once again establish locations for future movies made here. Various office equipment will be needed and phone calls and letters will have to be made in order to re-establish trust in the minds and hearts of film producers.

In order to do all of this, a staff will be put in place to work alongside the director.

With all of the above in mind, our governor, Terry Branstad, who brought the first Iowa Film Office into existence, has recommended that the Iowa Film Office be funded with $400,000. Despite this recommendation the Iowa House of Representatives is suggesting slashing the budget to only $150,000. When our film industry's best friend and fiercest proponent, Senator Bill Dotzler, Jr. told us about this, our knees weakened and our posture turned into exaggerated slumps. We felt as though our three years of weekly visits to Iowa's Capitol had yielded a pathetic result.

The budget approval process is not finished though. There is still a chance that the Iowa Senate will counter the House suggestion with a higher sum and that this may go back and forth in true political form. And this means that any reader of this article who wants to once again work as an actor or a crew person or as a provider of services or supplies to movie makers should now - and I do mean NOW- take a few minutes to write to all the Iowa legislators and say how vital it is to leave the governor's $400,000 alone because the film office cannot do a proper job without sufficient funding. This is supposed to be a legislature dedicated to creating jobs and improving our state economy and with film production comes many jobs and a huge influx of money to all communities hosting the making of films.

I think we should also write to Governor Branstad and let him know how important it is to keep his budget figure secure. We should thank him for going to bat for us, which he truly is doing I assure you all.

I have asked my dear friend David Thrasher to post the names and addresses of Iowa legislators on my blog, The Iowa Film Insider, and on my Facebook group page, IACT (Iowa Actors and Crew Together and Producers, Too). He will post this info late tonight, so check for that later.

Gene L. Hamilton, in the dirty trenches of politics and severely wounded, as is my fellow activist, Jay Villwock, who is also nursing gashes and slashes..... HELLLLLLLLLLLLLLLP US!!!!!!!!!

(photo is from today at the State House: Jay Villwock, Iowa Senator Bill Dotzler, Jr. of Waterloo, and me)

Making Good Use of An Empty Capitol

2012-02-03T16:02:00.000-08:00

I prepared written notes to members of the Iowa Legislative leadership. My message stated that I hoped they would support the governor's budget proposal to allocate $400,000 to fund the revival of the Iowa Film Office. Jay Villwock and I knew the capitol would be vacant today because legislators usually return to their homes for the week-ends, but we knew getting our notes into the hands of key leaders was important so we made the trip anyway. And we knew that Wendol Jarvis would be there to meet with the governor or others and we always enjoy chatting with him.

We immediately found Wendol.... actually, he found us, and together we entered each empty legislative chamber. We were helped by the senate master-at-arms as he kindly took our notes to senate leaders' desks or mailboxes. And on the other side, the house chamber, we found a secretary behind the chamber who gave us a form to fill out which allowed our notes to reach certain state representatives.

For anyone wishing to contact these same leaders and ask for their support of Governor Branstad's budget allocation of $400,000 for reviving the Iowa Film Office, here is who to contact, and their contact information is available on the internet and their email addresses are easy to copy and paste:

Here are the names of those who did receive our notes:

The President of the Senate is Democrat Jack Kibbie of the 4th District (Emmetsburg). The Majority Leader is Democrat Michael Gronstal of the 50th District (Council Bluffs). The Minority Leader is Republican Jerry Behn of the 24th District (Boone).

Regarding the House: In the House, the Speaker is Kraig Paulsen, R-Hiawatha, and the Speaker Pro Tempore Jeff Kaufmann, R-Wilton. Partisan House leadership includes Majority Leader Linda Upmeyer, R-Mason City, and Minority Leader Kevin McCarthy, D-Des Moines.

Members of the Iowa Senate Appropriations Committee: Robert Dvorsky is Chair, Matt McCoy is Vice Chair, Bill Dix is ranking member.

I believe that our friend Wendol Jarvis will return to lead the Iowa Film Office. He's worked tirelessly for several years to lay the groundwork to make the film industry work well here. I know he has driven thousands of miles and spent a lot of his own money to do this. And I have personally heard the governor say that he feels Wendol would be the best choice to run the film office.

When governor Culver terminated the film program the Iowa Film Office files mysteriously disappeared. This includes many thousands of photos and information in the locations file, places in Iowa for producers to consider for shooting future movies. And the Iowa film production guide was also removed from the office, plus posters and other items. As a result, the production guide must be re-created and the locations information and photo files will also need to be gathered yet again.

I hope some of you who may be reading this will take action, to bolster the chances of the Iowa senate and house approving the specific recommendation of the governor's budget plan.

gene l. hamilton
(photo shows Jay and I with Iowa film industry's strongest ally, Senator Bill Dotzler, Jr.)

Iowa Legislative Leaders

2012-01-26T14:35:00.000-08:00

In the event someone out there wishes to contact key Iowa Legislative members to say please leave the governor's suggestion of allocating $400,000 to fund the Iowa Film Office, and NOT reduce that sum, here are some names to contact, such as simply by emailing them:

The President of the Senate is Democrat Jack Kibbie of the 4th District (Emmetsburg). The Majority Leader is Democrat Michael Gronstal of the 50th District (Council Bluffs). The Minority Leader is Republican Jerry Behn of the 24th District (Boone).

Regarding the House: In the House, the Speaker is Kraig Paulsen, R-Hiawatha, and the Speaker Pro Tempore Jeff Kaufmann, R-Wilton. Partisan House leadership includes Majority Leader Linda Upmeyer, R-Mason City, and Minority Leader Kevin McCarthy, D-Des Moines.

Members of the Iowa Senate Appropriations Committee: Dvorsky is Chair, McCoy is Vice Chair, Dix is ranking member.

Gene L. Hamilton

A Bit Unsettled In the Capitol Today

2012-01-24T16:33:00.000-08:00

A Bit Unsettled In the Capitol Today

Jay Villwock and I marched up the hill to the beautiful gold domed Iowa State Capitol building (yer left, yer left, yer left-right-left) and after Jay shed his bracelets and assorted other jewelry we were passed through the security screeners at one of the entrances. It was early, before eight in the morning, but we timed it that way to get closer parking and a good selection of free goodies, such as breakfast sandwiches and yogurt with fruit on top.

And while we milled around nibbling on these morsels we bumped into several legislators, such as Senator Jack Hatch and Representative Dan Kelley. Both of these legislators are solidly behind us with our hope to get the Iowa Film Office sufficiently funded and to return Wendol Jarvis to run that office once more.

Todd Schulz, the governor's legislative liaison, spoke with us and made suggestions to us as to which key legislative committee members would be most important to meet with. We also said hello to Des Moines Register political reporter, Jason Clayworth. We chatted about the current status of filmmaking in Iowa.

Our most unsettling experience was when we met with Senator Bill Dotzler, Jr., in the Senate lounge. He said the senate leadership could possibly be hesitant in approving the full sum recommended by the governor, $400,000, to run the Iowa Film Office. Because of this, I think it's vital for anyone who is interested in getting back to work in the movie industry here to contact all Iowa legislators. This can take the form of an e-mail and I have previously cited links listing their individual e-mail addresses, but that information can be found by doing a basic Google search.

It would also be a good idea to contact Governor Terry Branstad and let him know how you feel about the film industry, such as how it may have positively impacted your own lives.

Another Trip To Push For The Iowa Film Office

2012-01-19T14:06:00.001-08:00

Another Trip To Push For the Iowa Film Office

The time is coming when the Iowa Film Office will get off the ground and stand up straight, revived and ready to rebuild the film program here. It's been such a long, long time. This is the third year that Jay Villwock and I have circulated within the Iowa Capitol Building and this may be the last session because our primary goal has been to ask Iowa senators and representatives to look with favor upon supporting the film industry here and it looks like our film office will set-up shop this summer. We feel this way because things are lining up nicely - that the governor's 2013 budget will be approved, at least his specific recommendation that $400,000 be allocated to support the IFO's return. And we also feel that our friend, Wendol Jarvis, will certainly be back to run that office, with the Governor's and the legislature's blessings.

We met with Representative Stu Iverson, a longtime legislator, who told us he didn't see any problems as far as both houses approving the suggested funding. And the governor's legislative liaison, Todd Schulz, shared that sentiment. Chairman of the House Appropriations SubCommittee, Representative Jason Schultz told us he, too, is in favor of this.

Vice Chairman of the Senate Appropriations SubCommittee, Senator Joe Seng, said that his committee went over the IFO budget suggestion in their meeting today and feels there is a strong likelihood it will pass both houses. He added that with committee Chairman Senator Bill Dotzler, Jr.'s certain approval, it will become even more likely to pass. Both Senator Seng and Dotzler have been there for us since the crisis began under Governor Culver's administration.

Jay and I met with Wendol Jarvis today as well. He has made countless trips from his Kansas City home to the capitol to meet with key legislators and many times directly with Governor Branstad. He has spent his own time and money to assist us all.

Once the budget is approved by both Iowa houses, it will go to the governor for his signature and become law. The new budget becomes effective on 1 July 2012. And as I have reported before, the Iowa Film Office will be placed in Iowa Cultural Affairs, where Mary Cownie is director. Mary is married to Representative Pete Cownie, who many times told us of his own support for the Iowa film industry. Jay and I met with Mary last summer and feel she is behind us as well.

Gene L. Hamilton

Article by Julie Hinds of The Detroit Free Press

2012-01-18T04:02:00.001-08:00

Less Interest In Michigan With Film-incentive Limits, Report Shows

By Julie Hinds

Detroit Free Press

George Clooney's "The Ides of March," partially shot in Michigan in 2011, was one of the last big-name films approved for state incentives before the changes.
Purchase Image Zoom
George Clooney's "The Ides of March," partially shot in Michigan in 2011, was one of the last big-name films approved for state incentives before the changes. / REGINA H. BOONE/Detroit Free Press

A just released semiannual report from the Michigan Film Office shows the impact of last year's shake-up of the state's film incentives.

The report reveals a nearly two-thirds drop in applications during the latter half of 2011 as compared to the same time frame in 2010.

Also mentioned: Three projects withdrew their applications or supplied insufficient information, including one with an anticipated $90 million in Michigan spending. It is a Steven Spielberg film called "Robopocalypse," according to sources in the local film community.

In February, Gov. Rick Snyder announced plans to revamp the incentives. He proposed limiting the previously uncapped program at $25 million annually, a figure that became official later in the year.

The new report's numbers look like this: From July 1 to Dec. 31 of 2011, 16 productions applied for the film and digital media incentives. Compare that to the same time frame in 2010, when 42 productions applied.

Four projects were approved for incentives in the latter of half of 2011, for a total of $915,000 in credits on about $2 million in estimated in-state spending. In the final six months of 2010, 26 projects were approved for a total of nearly $66 million in incentives on more than $168 million in in-state spending.

One factor explaining the lower numbers in the second half of the year: By early October, the state had already awarded everything but $427,000 of the available $25 million.

The "Robopocalypse" thriller, set to be directed by Spielberg, was described in the report as an untitled Fox-Dreamworks project. It projected Michigan expenditures of $90 million and was seeking $24 million in film incentives -- nearly equaling the $25-million cap that the film office abided by for most of 2011.

In October, Senate Majority Leader Randy Richardville, R-Monroe, hinted during a local radio interview that good news might be coming soon on a Spielberg project. Speaking to the Free Press in December, Spielberg said he couldn't publicly discuss where the film would be shot, but that he was open to places with film incentives.

The Michigan Film Office's report also revealed that "Iron Man 3," which wound up choosing North Carolina after its Michigan deal fell through, applied for nearly $34 million in credits on $102 million in anticipated spending.

The Free Press reported in 2011 that the state had matched North Carolina's $20-million offer to "Iron Man 3," but the deal was contingent on future legislative approval, while it was guaranteed in North Carolina.

Also lacking sufficient information or withdrawing was the reality show "All-American Muslim."

Four projects are pending, including "Cadillac High," which has projected spending of $27 million. A local film source says it's a feature about the real-life 1975 visit of the rock group Kiss to the city of Cadillac.

Overall last year, some 85 productions applied for the state's film incentives and 22 projects were approved (including two small-budget holdovers from 2010). That brought the total of approved incentives to $24.7 million.

In 2010, there were 119 applications, and roughly $146 million in approved incentives for the 62 approved projects that moved forward.

Michigan Film Office director Carrie Jones said Monday that the semiannual report figures were a snapshot of a specific time period and shouldn't be considered a forecast for 2012. This year, quarterly reports will be issued by the office.

"I think that our next quarterly report will show a very different story," said Jones, who expects the state will have a busy year in films.

"We've got world-class infrastructure, we've got a skilled and talented work force and we've got diverse locations. We also have a competitive incentive program. Michigan still is on the map for producers," said Jones.

The chairman of one of the big groups fighting for the film incentives doesn't think the numbers are necessarily an indicator of a new reality, either.

Kirk Miller of Michigan Film First, an industry coalition working to preserve and grow Michigan's film industry, said an unclear approval process had a big impact in 2011. Last year, filmmakers complained the process was vague and done behind closed doors.

"The way the MEDC was interpreting the legislation was a real turnoff to the West Coast," said Miller. "When people are budgeting their film, they need to know what Michigan offers, and they didn't know what Michigan offered, because it was different for every film."

Legislation passed in December that outlines the process for distributing the revamped incentives should help allay the uncertainty, according to Miller. He said Michigan needs to get the word out again that it's open for film business.

Miller also cited recent news that the state's budget is healthier than previously thought. "We are hoping the state will see the benefit of what the film industry had done for the state and give us more money to use."

Communities will benefit from renewed state film office

2012-01-17T06:30:00.000-08:00

(Letter to the Editor Des Moines Register - January 16,2012)

In response to Kathie Obradovich’s Jan. 12 column, “Seats Filling Rapidly for Trip to Florida”:

By bringing back the Iowa film office, Gov. Terry Branstad will also bring back the potential for good paying jobs for creative Iowans. And if filming resumes here, whole communities will also benefit when film production companies consume considerable amounts of goods and services.

Beautiful Iowa towns have been used in the making of several well-known feature films. When such films are released, they serve to attract tourists to Iowa so they can see for themselves just how lovely our towns and citizens are.

— Gene L. Hamilton, Screen Actors Guild member, Des Moines

The Iowa Film Office Regaining Consciousness

2012-01-12T11:13:00.000-08:00

Boy, what it ever cold and windy when Jay Villwock and I walked up the big hill on the west side of the Iowa State House today. Our first encounter was with Representative Clel Baudler. When Jay asked for his support, Clel said "So, the governor givea the Fair zero and wants to give $400,000 to the film office?", and then turned from us and abruptly walked away.

That didn't stop us. When Senator Thomas Courtney said hello to us and said he supports our cause, and when Senator Jack Hatch cheerfully met us and suggested putting the Iowa Film Office on a two year budget track, we knew things were looking better. Representative Dan Kelley of Newton also affirmed his continuing support, as did representative Peter Cownie, whose wife Mary heads the Iowa Department of Cultural Affairs, where the Iowa Film Office will now be located.

We tried to visit with Representative Ruth Ann Gaines, but she was not available. However, her assistant, Jawon, assured us that she is also in favor of the Iowa Film Office. Representative Gaines was a drama teacher at East High School in Des Moines prior to being elected to the Iowa House.

Jay and I left our handwritten notes of thanks for David Roederer, Director of the Iowa Department of Management, and also for Governor Branstad, for their work in reviving the Iowa Film Office and recommending the allocation of sufficient funding for that office.

I hope all Iowa film actors and crew will write to all Iowa legislators and tell them how vital it is to approve the governor's suggested funding of the IFO. Just refer to my previous Facebook Group Page posting on I.A.C.T. (Iowa Actors and Crew and Producers, too) for links to legislators' email addresses. It makes a huge difference when they receive letters, so do it now without delay.

gene l. hamilton

Iowa Film Office News

2012-01-10T15:56:00.000-08:00

It's been such a long time since Iowa actors and crew were employed by movie production companies. Some, including my dear friend Neil Wells, were forced to move out of Iowa for greener pastures. But now there truly is a brighter light shining on the path for the return of the Iowa Film Office.

Today I returned once more to the Iowa Capitol Building with fellow actor Jay Villwock. We arrived just after Governor Branstad had finished delivering his Condition of the State Address. Our good friend and supporter, Senator Bill Dotzler, was not on hand because of the passing of his father yesterday. But we did meet with a few Iowa senators, including Jack Hatch, who said he was for us and to call upon him anytime for his assistance. We spoke with Senator Joe Seng, too, who said he'd like to meet with us when there is a solid block of time for a conversation. He voiced his support for the Iowa film industry last year and the year before as well. Senator Black once again voiced his encouragement to us and even displayed a thumbs up to accent his sentiments.

As we were leaving we discovered that the governor's Fiscal Year 2013 Program and Budget Report included this: "Reinstate the Iowa Film Office. The Iowa Film Office, eliminated in 2010, had a solid reputation and a positive impact on film production in Iowa prior to the 2007 establishment of film tax credits and an expanded role for the Office. Over the years, the Film Office helped create jobs and revenue, showcasing Iowa to the world in productions such as Field of Dreams, The Bridge of Madison County, Twister, and many more. While suspension of the film tax credits should remain in place, Governor Branstad recommends reinstating the Iowa Film Office with the Iowa Department of Cultural Affairs".

In this report, the governor recommends that the Iowa Film Office be allocated $400,000 from the state's general appropriations fund. This recommendation must now be approved by both the Iowa House and Senate, which means anyone who wants the Iowa Film Office to indeed come back should now contact all Iowa legislators.

To contact members of the Iowa House, go to: Iowa House
https://www.legis.iowa.gov/Legislators/house.aspx

To contact members of the Iowa Senate, go to: Iowa Senate
https://www.legis.iowa.gov/Legislators/senate.aspx

You really must contact every legislator and tell them that it is vitally important that they approve the governor's proposed funding of the Iowa Film Office - so, PLEASE do this now... do NOT procrastinate, pretty please with cream/soy milk and sugar on top!!!!

Gene L. Hamilton

Jay & I Return To Scout The Iowa Capitol Today

2012-01-06T10:12:00.000-08:00

Jay suggested we make a spur of the moment trip to the Iowa Capitol Building this morning, and so we did. Inside the beautiful building we found that it was nearly deserted but we poked our old heads inside the office of the Director of the Department of Management and asked to see Director David Roederer, who very kindly gave us a short meeting during which we discussed the Iowa Film Office situation.

Mr. Roederer said he thought the reopening of the Iowa Film Office would come on July 1st or even sooner. He and Governor Branstad both fully favor the Iowa film industry and do want to get things back on track. We all agreed that there's still some ugly baggage remaining from when things went terribly wrong with the abuse of the Iowa film tax credits.

Jay and I also popped in on the governor's office manager, Leo Hough, who briefly spoke with us about the film office. Both Leo and David have always freely given their time to us.

We looked in both the senate and house chambers to find that absolutely nobody was there yet, although on Monday both houses will be full when the next legislative session begins once again.

While on the rotunda level we looked over the photos of the members of the Iowa legislature and remembered who some of our key supporters are. In the senate: Bill Dotzler, Dennis Black, Jack Hatch, Joe Seng, Brad Zaun, and Wally Horn. In the house: Peter Cownie, whose wife Mary is head of the office of Iowa Cultural Affairs, where the Iowa Film Office is possibly going to relocate, and these other representatives: Erik Helland, Dan Kelley, Craig Paulsen, and Ruth Ann Gaines.

We will return to speak with these and other legislators next week and during the entire session to continue to do what we can to let these people know how vitally important it is to get film production going again in Iowa. I think it's a bit of a tough row to hoe, but I truly believe it will happen.

Lee Rood Article in Des Moines Register

2011-12-25T05:20:00.000-08:00

Written by
LEE ROOD

Iowa’s former film chief has a message for state employees: Beware. You, too, could be convicted of misconduct in office.

Interviewed for the first time since his conviction in October, Tom Wheeler told The Des Moines Register last week that he believes the verdict in his high-profile case means any state employee could wind up being charged criminally “through no fault of their own.”

Wheeler said he had no training, no employee handbook and no legal coaching on the ramifications of screwing up when he was drafted to run Iowa’s film program.

“Nobody was clear about the minimum or maximum I was supposed to do,” Wheeler said Wednesday from the downtown office of his Des Moines lawyer, Angela Campbell. “The precedent of this law leaves the door open for the state to use the law well beyond what was expected.”

In September, Polk County jurors found Wheeler guilty of submitting falsified documents involving projects from filmmaker Wendy Weiner Runge. He received a deferred judgment and probation, meaning his record will be wiped clean if he stays out of trouble for the next two years.

Still, Wheeler said he has spent about $250,000 in legal fees, court costs and the like, and “it nearly destroyed my life.”

Now working at a hardware store in Indianola, Wheeler said he will never be able to pay his debts on his current salary. He said he will have to look for work out of state if he ever wants to get ahead.

But he also said he still believes film incentives were a great thing for Iowans, and he thinks they should be revived with better safeguards in place, such as formal audits before credits are awarded.

Wheeler was found not guilty on eight counts of fraud, conspiracy and felonious misconduct. Judge Douglas Staskal said at sentencing that Wheeler deserved punishment for shirking his responsibilities to Iowa taxpayers, but he acknowledged that jurors had “essentially exonerated Mr. Wheeler of any evil criminal intent” when they acquitted him of the other charges.

Wheeler said in the interview that he did not knowingly submit falsified records.

Jeff Thompson, a deputy attorney general involved in Wheeler’s prosecution, had no comment.

Wheeler’s interview came in the same week that filmmaker Bruce Elgin was ordered to pay $4.38 million in restitution to the state, but two others were awarded more than $5 million in taxpayer money in connection with the film program’s collapse.

Elgin, 42, of Washington, Ia., dodged a prison sentence when he was given a deferred judgment and two years’ probation for records tampering. Prosecutors alleged Elgin claimed $7.8 million in illegal expenses to gain state tax credits.

Meanwhile, the makers of big-budget movies “The Experiment” and “The Crazies” reached the largest settlements of all filmmakers whose productions were entitled to payments, but who were unable to collect after the state’s incentive program was suspended in 2009.

Magnet Media of Beverly Hills, Calif., producer of “The Experiment,” is to receive $4.1 million. Jekyll Productions, also of Beverly Hills, will get almost $1.4 million in cash and $2 million in tax credits for “The Crazies,” according to Deputy Attorney General Jeff Thompson.

The film program was run by Iowa’s Department of Economic Development, which employed Wheeler. A state audit released in 2010 found 80 percent of the tax credits awarded before the program collapsed — $26 million of $32 million — were issued improperly.

By Mike Scott, Times-Picayune/NOLA.Com

2011-12-22T03:22:00.000-08:00

Louisiana comes in at No. 1 in ranking of best states in which to film
By Mike Scott, The Times-Picayune NOLA.com

With just 10 days to go before the new year, Hollywood South is closing out 2011 on a high note, topping P3 Update Magazine's annual ranking of the best states in which to shoot a movie.
0106 film crew.JPGA local film crew preps for a scene in Mandeville on the set of 'Welcome to the Rileys.' Louisiana has earned the top spot on P3 Update's ranking of the best states in which to shoot a film.

The magazine -- a Hollywood-based monthly trade publication -- compiles its rankings based on "the most attractive combination of tax incentives, crew base, talent pool, infrastructure, accessibility, significant production revenue and overall popularity among filmmakers."

Louisiana's trend-setting tax incentives are what helped it gain a foothold in the industry, but it's not the only reason productions have continued flocking to the state in the nine years since the incentives were first adopted, P3 Update says.

"In addition to the Southern hospitality, Louisiana's success is largely due to the state's ability to attract repeat business with its attractive incentive programs, deep crew base and abundance of studio facilities."

Rounding out the top 10, in order, are Illinois, Florida, Georgia, California, Connecticut, New York, Utah, New Mexico and Michigan.

Put Down That Bottle...There Is Still Hope For Us!

2011-12-20T15:45:00.000-08:00

There is reason for hope that the Iowa Film Office will be revived. I spoke with someone in high authority today who said there are discussions underway regarding the funding of that office. Jay Villwock and I will meet very soon with someone at one of the very highest levels in state government so that we can bring the Iowa film family together to help get things going. Stay tuned!!!

From Michael Gonyea at Examiner.Com

2011-12-17T04:55:00.000-08:00

Film incentives saved from cutting room floor

Amid a flurry of activity on the final day of the 2011 legislative session, Michigan Lawmakers approved a measure designed to revive Michigan’s stalled film incentive program.

The bill, much more clearly than the one it would replace, defines the criteria to be used in allocating the incentives.

The 2012 fiscal year budget (which began in October) set aside $25 million for the program.

But the Michigan Film Office decided on Sept. 30 that it would stop taking applications for incentives until the process for providing grants was clarified.

The new direct grant program isn't as lucrative for producers as the old 42 percent across-the-board tax credits were. But assuming Gov. Snyder agrees to sign the measure into law; it will at least put the film office back in business.

Among its key provisions, the bill provides higher incentives for producers who spend a greater portion of their overall budget on Michigan businesses and workers. A major criticism of the previous program was that it offered no such incentive. The bill also requires that all productions make reference to the Pure Michigan tourism campaign.
Advertisement

The true economic impact of the credits won’t be known for several years. Michigan's film industry must ramp up to realize their full value. Building studios, adding post-production facilities, and training the workers that will be needed to staff them can’t happen overnight.

And estimates on the economic value to hotels, restaurants and other businesses serving production companies vary widely. But if one has faith in the natural assets Michigan brings to film producers, and if the Legislature keeps incentives in place for the long term , the result will likely be a net positive for its taxpayers.

Finally, there’s the cool factor. How does one gauge the intangible value of having celebrities like Clint Eastwood, Jack Nicholson, George Clooney and Drew Barrymore, among many others, filming and hanging out in Michigan?

Quiet on the set

Roll camera

Ready...aaaand action

From Des Moines TV-8, KCCI News

2011-11-22T06:05:00.001-08:00

Could Iowa Film Office Return?

DES MOINES, Iowa -- Could Iowa be getting back into the movie business?

Waterloo Senator Bill Dotzler is the co-leader of the House-Senate Economic Development Sub-Committee.

He said he hopes to re-establish the Iowa Film Office within the state Department of Cultural Affairs, and look at the possibility of setting up direct grants for specific film projects to replace the tax-credit approach.

Gov. Terry Branstad addressed the issue Monday morning during his weekly news conference.

"I do believe that we need a film office and I would like to see that in the Department of Cultural Affairs," said Branstad.

The film tax-credit program is currently suspended through fiscal year 2013. It's expected that lawmakers will vote next session to end the program permanently.

From EasternIowaGovernment.Com

2011-11-17T04:41:00.000-08:00

DES MOINES
By Rod Boshart/SourceMedia Group News–
State tax credits for business development and research have spurred jobs and economic growth, but some state legislators were not convinced Wednesday that the activities would not be taking place without the incentives.
Also, members of the Legislative Tax Expenditure Committee said Branstad administration officials have signaled that they want lawmakers next session to end the film tax-credit program currently suspended through fiscal 2013.
Sen. Bill Dotzler, D-Waterloo, co-leader of the House-Senate economic development budget subcommittee, said he hopes to re-establish the Iowa Film Office within the state Department of Cultural Affairs and look at the possibility of setting up direct grants for specific film projects to replace the tax-credit approach.
“That old tax credit program is definitely dead. Drive a stake in its heart and don’t let it out in the sunlight,” he noted. However, Dotzler said he was still interested in trying to revive a way to nurture the film industry and the jobs it could create. “I think we ought to go back and revisit it. I think it was a good idea that went bad.”
Committee co-chairman Rep. Tom Sands, R-Wapello, said the ongoing film tax-credit scandal and related criminal prosecutions have “very possibly damaged the program where it will no longer be back because of public opinion if nothing else.”
During Wednesday’s committee discussion, Tim Whipple of the Iowa Economic Development Authority said the state’s high-quality jobs program has returned two dollars in increased tax revenue to the state treasury and leveraged $19.26 in capital investment for every dollar in state tax incentives that have been provided to qualifying businesses.
Between 2004 and September 2011, 201 projects have received nearly $385.6 million in state tax incentives. Those projects have made more than $7.4 billion in capital investments, created or retained 13,820 jobs and paid wages averaging $21.71 per hour.
In a separate report, Amy Rehder Harris of the state Department of Revenue said Iowa companies claimed $8.3 billion under the federal research activities tax credits in tax year 2008 and $48.6 million in state tax credit claims in tax year 2009 – based on the latest data available. About three-fourth of the state money went to large corporations, overall supported about 13,378 high-paying jobs, and the credits averaged about 4.3 cents on the dollar for the $1.2 billion worth of research activity conducted in Iowa, she told lawmakers.
However, Sen. Herman Quirmbach, D-Ames, said there’s no data that indicated the research and business development activities would not be taking place in Iowa even if the state offered no incentives and the reality is “we don’t know what we’re getting for the money we’re shelling out.”
Sands said he wasn’t sure what the 2012 legislative session will hold in terms of the state tax credit programs because there are some lawmakers who would like to get rid of the tax credits so there would be more money to spend in other areas and there are some lawmakers who would be willing to get rid of the tax credits to do more broad-based tax reform that would benefit all businesses.
Democrats on the interim panel cited a report on the state’s earned income tax credit indicating that 208,000 households filed $28.5 million in claims for tax year 2009 in pushing for another attempt next session to send Gov. Terry Branstad a boost in the credit that aids working families at a time of economic recession. The governor refused to sign a proposed increase in the earned income tax credit from 7 percent to 10 percent that backers said would have benefitted about 240,000 working families making $45,000 or less annually because he wanted it included in a broader package of tax reforms.
Committee co-leader Sen. Joe Bolkcom, D-Iowa City, said Wednesday’s review of the hundreds of millions of dollars Iowa spends in state tax credits was “long overdue.” But he added that the data presented begged the question: “Why does an Iowan making $17,500 a year pay more in state income taxes than some of the largest, most profitable corporations in the world, corporations which are making money in Iowa? In other words, why is Iowa taking from the working poor and giving to rich corporations?”

Final Words

2011-11-10T19:57:00.000-08:00

I doubt I will be writing any more blogs or comments about the frozen Iowa film tax credits and the circumstances around them simply because I've said all I have to say about them. Unless something new surfaces from either the film trials or during the next legislative session, I have nothing to add.

I do need to clarify that I am not necessarily totally opposed to film incentives whether they be subsidies or tax rebates. I just think they should be straight forward and understandable to the average Iowa taxpayer with no smoke and mirrors to disguise how they actually work.

I'm sure there are a few people out there who have been wanting me to shut up about this issue, either because they are responsible for how the bill got written or because they think that bringing this issue up will harm the progress of restarting the Iowa Film Office. They will get their wish but this issue shouldn't be totally swept under the rug, because it could cause trouble again if it is ignored. I am surprised that they haven't made their objections known or have made any attempt to correct anything they have issue with. But that is their choice.

I suspect if nothing is done to replace the film tax credits, the legislature will either kill it outright or remove life support so that they can't be used. That is why I make the proposal that they consider making it an actual tax credit - that is, a refund on sales taxes. I think this might make it more palatable to the legislators and give a place for a fresh start with room for upward growth. With the state putting off things like roads and bridges and making cuts to education, I doubt they are going to be too excited to returning to the 50% subsidy they were offering.

We definitely need the Iowa Film Office back no matter what happens and I encourage you to continue sending messages to the governor to encourage that. I do think we need some sort of incentives to encourage producers to shoot in Iowa because without one Iowa is going to be a tough sell. Even if a film does come here, without some sort of incentive producers will not have an incentive (there's that word again) to hire Iowa cast and crew, except for the smallest of jobs.

That's all, unless something new comes up.

Time For A Disclaimer

2011-11-10T09:39:00.000-08:00

All content provided on this blog is for informational purposes only. The owner of this blog makes no representations as to the accuracy or completeness of any information on this site or found by following any link on this site. The owner will not be liable for any errors or omissions in this information nor for the availability of this information. The owner will not be liable for any losses, injuries, or damages from the display or use of this information.

I encourage any of you who may be reading my blog to contribute your opinions, but stress that the views expressed in the posts and comments of this blog are the personal opinions of the contributing authors only.

We in the Iowa film community have suffered for several years from lack of creative work and because of this, frustrations have arisen. I would prefer to keep things in an optimistic light and strive towards focusing on positive ideas. It is very important that Iowa Governor Terry Branstad know that we need the Iowa Film Office to return and and we appreciate his long-standing support of film-making in Iowa.

2011-11-09T17:33:00.000-08:00

Movies in Iowa

2011-11-06T06:05:00.000-08:00

Here is a list of movies that had been shot in Iowa that is from September 18, 2009. There have been some feature films shot here since then, and this list definitely needs to be updated and filled in, and probably annotated but it is an informative one.

The movies made before "Cold Turkey" in 1968 were mostly made under the old studio system. I don't have the information for most of them but I do know that on one of them B-roll footage was shot here with the bulk of the picture shot back in California on sound stages. B-roll footage would be that which wouldn't involve any actors - things like building exteriors and landscape shots. This is probably true for the rest. These movies had a very minimal impact on Iowa's economy and next to none for anything we might consider a "film industry". An item of special note is just how far apart these productions are. There are 2 in the 1930's, 1 in the 1940's and it isn't until the mid 1960's where we see another camera rolling in Iowa.

This changes a bit after "Cold Turkey", the first major studio film to be shot entirely in Iowa, is shot in 1968. Some of it is due to the religious film companies Mark IV and Heartland productions making a series of feature films for the fundamentalist christian church market which the destination of most being church basements. It is still not a lot of films and certainly nothing to build an industry on.

It is with the introduction of the Iowa Film Office that activity picks up for secular entertainment-based features in the state. The gap between studio based productions decreased to approximately 2 to 3 years between films. It was still not enough to base a living on and not often enough to gain any deep experience but it was a definite improvement.

The introduction of the film tax credits in approximately 2007 (will need to research to nail down the date) turned this trickle into a deluge. It didn't last long but at one point, in Des Moines alone, there were 3 feature films shooting simultaneously. Then the bottom dropped off when then governor Chet Culver froze the program without any clear end date because of the discovery of abuse of it. Since then there have been no studio bound feature films shot in Iowa. It has been now two years and any feature films that have been made have been volunteer based efforts.

Our current governor, Terry Branstad, has announced his intention to re-open the Iowa Film Office, possibly housing it within the Department of Cultural Affairs, but has set no date to do this. I've heard that communication from our film community to him has been rather quiet so he has not made this a priority yet. This is a very good cue to you to start communicating.

There are some other things to be learned from this list: One of those things is that for there to be the well-known films that put Iowa on the cultural map (films like "Field of Dreams" and "Bridges of Madison County") there has to be a sufficient quantity of total films being made to allow for the luck that it takes for such films to show up.

Another thing of note is that a significant quantity of the films listed are independent films in the category of "never heard from again." The main reason these films have this status (and this does not just apply to Iowa made films) is that all of the financial resources were poured into the making of the film and little to none into the marketing and selling of the film. Hats off to you if you have managed to make a feature but you aren't going to get very far if you've not thought past your final cut. Most independent filmmakers take their features to film festivals in the hopes of finding a film distributor who they hope will save them. These filmmakers have often put all their financial resources into the one film and aren't in the position to make another one. If they do have the luck to find a distributor to carry their film the deals are often very one sided in favor of the distributor and the producer is lucky to see any profit at all. Not to try to push a book, but as a public service to independent producers, I suggest you read this book: The Big Picture: Money and Power in Hollywood by Edward Jay Epstein. It will tell you a great many things about how the business actually works and many will be eye openers.

I will eventually have this list of movies up to date. Don't give up. All is not lost as far as the movie business in Iowa. Be sure to lobby the governor hard for a new Iowa Film Office. He created the original one so you can be sure he is not against the idea. He just needs to know that you really want it bad. Otherwise he'll set it aside and not deal with it.

Films Made (or at least partially made) in Iowa:
1935 – Penitentiary, Anamosa
1938 – Union Pacific, Council Bluffs
1945 – Keep Your Powder Dry, Des Moines
1966 – The Hostage, Des Moines
1968 – Cold Turkey, Winterset
1968 – Fever Heat, Stuart
1968 – The Warden, Fort Madison
1969 – Gaily Gaily, Dubuque.
1970 – Thief in the Night, Des Moines and Carlisle
1973 – Singin’ Happy, various locations
1974 – Blood on the Mountain, Des Moines
1974 – Survival, Des Moines
1975 – All the King’s Horses, Ivy and Des Moines
1975 – Huckleberry Finn, along Mississippi River
1976 – A Distant Thunder, Des Moines
1976 – A Stranger in the Forest, Des Moines
1976 – Happiness Is … , Des Moines
1977 – F.I.S.T., Dubuque
1977 – Ride the Wind, Des Moines
1977 – Sammy, Des Moines
1978 – Nite Song, Des Moines
1978 – Scoring, Des Moines and Cedar Rapids
1979 – Paradise Trail, Des Moines
1980 – Heaven’s Heroes, Des Moines
1980 – Image of the Beast, Des Moines
1980 – Take This Job and Shove It, Dubuque
1980 – Whitcomb’s War, Des Moines and Jefferson
1981 – Home Safe, Des Moines
1981 – Pennies from Heaven, Dubuque
1982 – Face in the Mirror, Des Moines
1983 – Children of the Corn, Sioux City and Whiting
1983 – Country, Waterloo and Dunkerton
1983 – Prodigal Planet, Des Moines
1984 – Starman, Cedar Rapids
1984 – The Healing, Des Moines
1984 – The Shepherd, Des Moines
1985 – Echoes of War, Des Moines
1985 – Miracle Man, Des Moines
1985 – Rites of Passage, Des Moines and Adel
1986 – Adventures of Huckleberry Finn, northeast Iowa
1986 – Together, various locations
1987 – Miles from Home, Cedar Rapids
1987 – The Geek, Davenport
1988 – Field of Dreams, Dyersville
1988 – Zadar, Cow from Hell, Iowa City
1990 – Bix, Davenport
1990 – Indian Runner, Council Bluffs
1990 – Luther the Geek, various locations
1990 – Where the Night Begins, Davenport
1991 – Brother and Sisters, Davenport
1991 – In the Best Interest of the Children, Cedar Rapids
1991 – Noises Off, Des Moines
1992 – Shimmer, Toledo and Marshalltown
1992 – Whispers in the Dark, Des Moines
1993 – A Childhood Friend, Davenport
1993 – The Program, Iowa City
1993 – The Room Next Door, Davenport
1994 – Omaha, Council Bluffs
1994 – The Bridges of Madison County, Winterset and Adel
1994 – The Puppet Masters, Des Moines
1994 – An American Love, Davenport
1995 – Mommy, Muscatine
1995 – Twister, Eldora
1996 – Citizen Ruth, Council Bluffs
1996 – Michael, Council Bluffs
1996 – Touch, Council Bluffs
1997 – Drive-by Johnny, Bernard
1997 – Love from Ground Zero, Council Bluffs
1997 – The Unspoken, Grand Junction
1997 – The Yoofo Club, Des Moines
1997 – Trekkies, Riverside
1998 – Finest Hours, Fairfield
1998 – The Straight Story, Laurens and Clermont
1998 – Whiteboyz, Davenport
1999 – Cutter, Des Moines
2000 – Rain, State Center and Marshalltown
2000 – Silverwings, Des Moines
2002 – Haunting Villisca, Villisca and Des Moines and Warren County
2002 – Mommy 2, Muscatine
2002 – The Formula, Cedar Rapids
2002 – Yearbook, Bettendorf and Davenport
2003 – Iowa, Centerville
2003 – Magic Moment, Cedar Rapids area
2003 – Vamoose, Des Moines
2004 – Again and Again, Spring Hill and Warren County
2004 – Beneath the Mississippi, Burlington
2004 – Boone Style, Des Moines
2004 – Eliot Ness: An Untouchable Life, Des Moines
2004 – Her Summer, Davenport
2004 – Lights, Camera … Kill!, Ottumwa
2004 – University Heights, Iowa City
2005 – 30, Cedar Rapids and Highway 30
2005 – Bad Kids Volume III, Des Moines
2005 – Dog Jack, Mount Pleasant
2005 – Indelible, Des Moines
2006 – Something Blue, Des Moines
2006 – The Curse, Marshalltown
2006 – The Hideout, Davenport area
2006 – The Final Season, Norway and Cedar Rapids
2007 – Sugar, Davenport, Burlington
2007 – 16 to Life (originally Duck Farm No. 13), McGregor
2008 – Children of the Corn, Lost Nation, Davenport
2008 – South Dakota, Earlham, central Iowa
2008 – Peacock, Odebolt, Greenfield, Lorimor
2008 – 16 to Life, McGregor
2009 – Ticket Out, Des Moines, central Iowa
2009 – The Crazies, Lenox, south western Iowa
2009 – The Offering, Washington, eastern Iowa
2009 – Splatter: Honor, Love, and Paintball, Burlington, south eastern Iowa
2009 – Twelve Thirty, Cedar Rapids, Iowa City
2009 – Sam Steele and the Junior Detective Agency, Des Moines
2009 – The Scientist, Council Bluffs
2009 – Megafault, Davenport
2009 – Ash, Des Moines
2009 – The Experiment, Des Moines
2009 – Janie Jones, Des Moines
2009 – Smitty, Des Moines
2009 – Dylan’s Wake, Des Moines
2009 – Lucky, Council Bluffs
2009 – Fertile Ground, Madrid

From BusinessFacilities.Com

2011-11-04T07:15:00.000-07:00

2011 INCENTIVES GUIDE
A comprehensive guide to state incentives offered throughout the U.S.
ALABAMA

INCOME TAX CAPITAL CREDIT: Currently codified as Article 7, Chapter 18, Title 40, Code of Alabama 1975. It is a credit of five percent of the capital costs of a qualifying project, to be applied to the Alabama income tax liability or financial institution excise tax generated by the project income, each year for 20 years. This credit cannot be carried forward or back, and cannot be used to generate a refund to the taxpayer. The capital credit is used only after all other deductions, losses or credits permitted under Titles 40 and 41 of the Code of Alabama 1975. The credit will follow the income generated by the project and, therefore, will be allowed to “pass-through” entities such as: corporations, partnerships, limited liability companies, etc. Types of Capital Credit projects include:

* New Project or Expansion Project: Consists of new investment at a new site in Alabama, or new investment that will expand the capacity and the number of employees at an existing facility. The law allows more than one project on the same site. A company may have any number of projects in Alabama, as long as each project meets the statutory requirements for a qualifying project.

* Small Business Addition: A small business addition is an addition to an existing facility of a small business. A small business is a business located in Alabama that has 100 or fewer full-time employees, prior to the date on which the addition is placed in service.

CERTIFIED CAPITAL COMPANY PROGRAM (CAPCO): Promotes investment in Alabama-based businesses by creating several venture capital funds required to invest in Alabama companies. Businesses that request CAPCO investment funding must meet certain criteria and requirements set by the Alabama Development Office. CAPCO financing, an alternative to conventional bank financing, can accommodate a slightly higher risk profile and provide a more flexible structure for growing businesses. Eligibility requirements include:

* Headquartered in Alabama or will be relocated to Alabama
* Principal business operations in Alabama or will be relocated to Alabama
* Have no more than 100 full-time employees, and 80 percent of employees are in Alabama or 80 percent of payroll is paid to employees in Alabama
* Industries that qualify for the CAPCO program may include manufacturing, processing, or assembling products; conducting research and development; or providing services.

ARIZONA

THE ARIZONA COMPETITIVENESS PACKAGE (HB 2001) is a brand new incentive package which includes the following new incentive programs and updates:

Quality Jobs Tax Credit Program: Beginning July 1, 2011, this new program provides Arizona income tax credits for companies creating new jobs and investing in Arizona. The credit is valued at up to $9,000 over a 3-year period per each new employee and offers a 5-year carry forward provision for any unused tax credits. Eligibility qualifications are different for rural and metro areas. The program is capped at 10,000 new jobs being claimed each year by all participants; whereas a taxpayer is limited to a maximum of 400 new jobs per year.

Job Training Program: Originally set to expire in 2011, the Arizona Competitiveness Package extended the program an additional five years until December 31, 2016 and modified the definition of a “rural area.”

$25 Million deal-closing fund: Arizona has taken a progressive position by offering attraction funds to companies meeting performance measures that benefit both the company and the citizens of Arizona. Utilization of the Arizona Competes Fund will generate investment in business projects that stimulate and promote industries providing high-wage and stable jobs. In order to assure a return on investment to the state, performance safeguards are a requirement of these funds. To request more information as it becomes available, please click here.

Arizona now offers a 100 percent electable sales tax factor for multi-state corporations. The new legislation increases the electable sales factor for multi-state corporations from 80 percent to100 percent. The increase is to occur in equal increments over a four year period, between 2014 and 2017. This provides businesses with the opportunity to reduce their Arizona tax burden.

30 percent Reduction in Arizona’s corporate income tax rate: Corporate Income Tax rates will be decreasing in Arizona from 6.97 percent down to 4.9 percent, between 2014 and 2017. This new 30 percent lower rate makes Arizona’s rate one of the five lowest in the country.

property tax reform:

* Business: Accelerated Depreciation schedules for prospective acquisitions of commercial personal property have also been improved. Five-year accelerated depreciation schedules have been increased to help companies recover their investments even faster.
* Personal Property Tax Exemption: 15 percent increase in personal property exemptions. The exemption on personal property is currently $67,000; it is being increased to $79,000 beginning in 2011 by using the Employment Cost Index (ECI) rather than the Gross Domestic Product Implicit Price Deflator (GDP IPD).
* Commercial Property: Reduced by 10 percent, the commercial property assessment ratio will be 18 percent by 2017. This continues a 10-year trend of reducing property taxes in Arizona.

Extension of the Angel Investment Tax Credit Program: Originally set to expire in 2011, the program is now available until June 30, 2016. Additional improvements to the program include expanded company eligibility and beginning in 2014 elimination of capital gains tax on income derived from investments in companies certified by the ACA.

Enhancement of the Research & Development Tax Credit Program: The R&D program now offers up to a 34 percent Arizona income tax credit for R&D made in conjunction with an Arizona public university. Tax credits are based upon R&D increases over prior years.
ARKANSAS

TARGETED BUSINESS INCENTIVES: “Targeted businesses” may qualify for three special incentives designed to help new, knowledge-based businesses in their early years. These discretionary incentives are for start-up companies in emerging sectors (Advanced materials and manufacturing systems; Agriculture, food and environmental sciences; Biotechnology, bioengineering and life sciences; Information technology; Transportation logistics; and Bio-based products):

* A refund of sales and use taxes paid on the purchase of building materials and machinery and equipment associated with the approved project
* A transferable income tax credit equal to 10 percent of payroll for up to five years
* A transferable income tax credit equal to 33 percent of eligible research and development expenditures

Companies must be less than 5-years old; have an annual payroll between $100,000 and $1 million; show proof of an equity investment of at least $250,000; pay at least 150 percent of the lesser of the state or county average hourly wage where the business is located; and meet requisite payroll thresholds.

RESEARCH AND DEVELOPMENT INCENTIVES:

* University Based Research and Development – An eligible business that contracts with one or more Arkansas colleges or universities in performing research may qualify for a 33 percent income tax credit for qualified research expenditures.
* In-House Research and Development – New and existing eligible businesses that conduct “in-house” research that qualifies for federal research and development tax credits may qualify for in-house research income tax credits. The credit allowed is twenty percent of qualified research expenditures that exceed the base year, for a period of three years and the incremental increase in qualified research and expenditures for the succeeding two years. The income tax credit earned for in-house research and development may be used to offset 100 percent of the businesses’ state income tax liability.
* Research and Development in Area of Strategic Value – For qualifying businesses that invest in: 1) in-house research in an area of strategic value—fields having long-term economic or commercial value to the state, and that have been identified in the research and development plan; or 2) a research and development project offered by the Arkansas Science and Technology Authority. The income tax credit is equal to 33 percent of qualified research expenditures with a maximum of $50,000 per tax year.

TOURISM DEVELOPMENT INCENTIVES: The Arkansas Tourism Development Act provides state sales and use tax credits and income tax credits to businesses initiating approved tourism attraction projects. Sales tax credits shall be determined in accordance with the following criteria:

* Eligible minimum project costs must be $1 million, except in high unemployment counties (Arkansas, Chicot, Clay, Crittenden, Dallas, Desha and Mississippi) where it is $500,000.
* Sales tax credits are calculated based upon 15 percent (25 percent in high unemployment counties) of eligible project cost for projects spending more than $1 million.
* Sales tax credit may be applied against the business’s increased sales tax liability resulting from the project.
* Other review criteria may be requested to determine whether the project meets the intent of the Act.

Additionally, eligible businesses may receive a state income tax credit equal to 4 percent of the annual payroll of each new, full-time, permanent employee. The income tax credits begin in the year in which the new employees are hired.
CALIFORNIA

ENTERPRISE ZONES: Businesses located within the boundaries of an EZ are eligible for tax credits. The first major EZ tax credit is equivalent to the sales and use tax paid on the first $1,000,000 of Personal Income Tax or Corporations can earn sales tax credits on purchases of $20 million per year of qualified machinery and machinery parts. The second major EZ benefit takes the form of a credit equal to a percentage of the wages paid to a qualified employee. The credit is based on the lesser of the actual hourly wage or 150 percent of the state-established minimum wage. The credit is provided over a five-year period with 50 percent of the wages creditable in the first year of employment, 40 percent the second year, 30 percent the third year, 20 percent the fourth year, and 10 percent the fifth year. If the employee stays with the company for the entire 5-year period, the company receives credits totaling nearly $37,440 per qualified employee. If the employee is terminated prior to 270 days of employment, the credit is recaptured.

LAMBRA zones are a companion to EZs. The most notable differences in incentives include enhanced equipment purchase eligibility under the sales and use tax credit; an annual wage limitation of $2 million per year under the hiring tax credit; and redefinition of qualified employees to include displaced military or civilian employees of the former base.

RESEARCH AND DEVELOPMENT TAX CREDIT: Designed to encourage businesses to increase their basic research and development activities in California, the research and development tax credit allows companies to receive a 15 percent credit against their bank and corporation tax liability for qualified in-house research expenses, and a 24 percent credit for basic research payments to outside organizations. This tax credit is applied to a tax payer’s state tax liability. The federal tax credit may be collected for the same research activity. Qualified research expenses generally include wages, supplies and contract research costs. To qualify, a taxpayer’s research must be conducted within California and include basic or applied research of scientific inquiry, original investigation for the advancement of scientific or engineering knowledge or improved function of a business component. The research activity must be conducted in California to qualify for the credit.

EMPOWERMENT ZONES: The federal government has designated sections of several California communities as Renewal Communities, Empowerment Zones and Enterprise Communities (RC, EZs and ECs). The cities of Fresno, Los Angeles, Santa Ana, San Francisco, Orange Cove, Parlier, and the counties of Imperial and Riverside have designated RCs, EZs or ECs. Benefits to businesses locating or expanding in these areas include:

* Employer wage credits of 20 percent for the first $15,000 in wages paid to an individual who resides in the EZ up to $3,000.
* Section 179 deduction allowing businesses to deduct all or part of the cost of eligible property (machinery, furniture, equipment, computers) up to an additional $20,000.
* Availability of low interest rate tax-exempt private activity bonds to finance industrial projects typically between $1-3 million (some zones have substantially larger limits), often with fewer restrictions than those normally associated with tax-exempt bond financing.
* Possible city business tax exemption.
* Postponement of capital gains on the sale of EZ/EC assets.

THE NEW MARKETS TAX CREDIT (NMTC) PROGRAM permits taxpayers to receive a credit against federal income taxes for qualified equity investments in designated Community Development Entities (CDEs). Substantially all of the qualified equity investment must in turn be used by the CDE to provide investments in low-income communities. The credit provided to the investor totals 39 percent of the cost of the investment and is claimed over a seven-year period. In each of the first three years, the investor receives a credit equal to 5 percent of the total amount paid for the stock or capital interest at the time of purchase. For the final four years, the value of the credit is 6 percent annually.

For a complete list of California incentives, visit: www.business.ca.gov/RelocateorExpand/BusinessIncentives.aspx
DELAWARE

The state of Delaware takes a comprehensive approach in supporting businesses and entrepreneurs of all sizes and has special programs that play to Delaware’s strengths, including:

The DELAWARE STRATEGIC FUND: represents the primary funding source used by the Delaware Economic Development Office (DEDO) to provide customized financial assistance to businesses. For businesses considering locating in the State of Delaware, financial assistance may be provided in the form of low interest loans, convertible loans to grants, or other creative instruments to support the attraction of businesses hiring Delawareans.

SMALL BUSINESS INNOVATION RESEARCH (SBIR): The Delaware Strategic Fund represents the primary funding source used by for SBIR Bridge Grants. The SBIR Matching Grant program provides grants funds to businesses located in the State that have obtained a federal SBIR Grant.

BROWNFIELD GRANT PROGRAM: The Delaware Strategic Fund represents the primary funding source used for the Brownfield Grant program that helps reduce the capital expenditure of redeveloping a Brownfield site where at least five jobs will be created.

TAX CREDITS FROM NEW ECONOMY JOBS PROGRAM: Eligible businesses receive an initial 25 percent rebate on withholding taxes. To qualify, the business must add at least 50 new jobs, each of which must have an annual salary of at least $100,000. Participating businesses may receive a maximum rebate of up to 40 percent after 250 qualifying employees have been hired and the business operates within targeted growth zones, incorporated municipalities or former Brownfields. Qualifying firms are eligible for credits for a ten-year period.

TARGETED INDUSTRY TAX INCENTIVES: Businesses in targeted industries are eligible for tax credits of $400 for every $100,000 of capital investment, as well as $400 for every new job created. This credit can be used for a period of up to ten years. It requires a minimum capital investment of $100,000, which may not exceed 50 percent of annual pre-tax liability. Select commercial businesses may also qualify for a ten-year reduction in gross receipt taxes. Targeted industries include manufacturing, wholesaling, computer Processing, engineering, computer credit, aviation, telecommunications, laboratories and scientific research.

TARGETED LOCATION TAX INCENTIVES: Targeted industries (as defined above) that expand or relocate to targeted locations are eligible for corporate income tax credits of $650 for every $100,000 of capital investment, as well as $650 for every job created. This credit can be used for a period of up to ten years. Select commercial businesses may also qualify for a ten-year reduction in gross receipt taxes. Targeted locations include Targeted Census Tracts*, Government Owned Property, Foreign Trade Zones and Non-profit Owned Property for Economic Development

GREEN INDUSTRIES: Green manufacturers may be eligible for tax credits if they reduce chemical waste by 20 percent, reduce other waste by 50 percent, use 25 percent recycled materials in their manufacturing and take other steps to remove materials from Delaware’s solid waste stream.

BROWNFIELD TAX CREDITS: Businesses that develop property on former Brownfields and make more than a $100,000 capital investment are eligible for tax credits. Brownfields in targeted locations are eligible for a $900 credit for every $100,000 of capital investment and $900 for every job created. Those in non-targeted areas are eligible for a $400 credit for every $100,000 of capital investment and $400 for every job created.

PUBLIC UTILITY TAX REBATES: Tax Credits are available for a rebate of 50 percent of the public utilities tax imposed on new or increased consumption of gas and electricity for five years. The public utilities tax rate is 4.25 percent. The utility tax on the consumption of electric by licensed manufacturers and food or agribusiness processors is reduced to 2 percent. Additionally, electricity consumed in the manufacturing of automobiles is exempt from utility taxes.

BUSINESS FINDERS FEE (BFF): Existing Delaware companies that successfully recruit other companies to the state are eligible for a tax credit of $500 for each new job that the new company brings. This is an innovative new program that will help strengthen local supply networks and sectors.

LIMITED INVESTMENT FOR FINANCIAL TRACTION (LIFT): This loan program allows participating small businesses to defer interest payments on their line of credit for a two-year period. Eligible businesses must meet the following requirements:
· Have been in business for at least three years
· Have an existing line of credit with a Delaware commercial bank
· Have between 3 – 50 employees

SMALL BUSINESS ENERGY AND FACILITIES REVOLVING FUND: Created by a $500,000 grant from the U.S. Department of Commerce and matched with funds from the Delaware Strategic Fund, this fund provides loans at market or below-market interest rates to businesses that will create or retain jobs in industries that promote energy efficiency or recycling.
FLORIDA

QUALIFIED TARGET INDUSTRY TAX REFUND (QTI): Available for new or expanding companies that create high wage jobs in targeted high value-added industries. It includes refunds on corporate income, sales, ad valorem, intangible personal property, insurance premium and certain other taxes. Pre-approved applicants who create jobs in Florida receive tax refunds of $3,000 per net new Florida full-time equivalent job created, $6,000 in an Enterprise Zone or Rural Community (county). For businesses paying 150 percent of the average annual wage, add $1,000 per job; for businesses paying 200 percent of the average annual salary, add $2,000 per job; businesses falling within a designated high impact sector or increasing exports of its goods through a seaport or airport in the state by at least 10 percent in value or tonnage in each year of receiving a QTI refund, add $2,000 per job; projects locating in a designated Brownfield area (Brownfield Bonus) can add $2,500 per job. The local community where the company locates contributes 20 percent of the total tax refund. There is a cap of $5 million per single qualified applicant in all years, and no more than 25 percent of the total refund approved may be taken in any single fiscal year.

CAPITAL INVESTMENT TAX CREDIT (CITC): Used to attract and grow capital-intensive industries, it is an annual credit, provided for up to 20 years, against the corporate income tax. Eligible projects are those in designated high-impact portions of the following sectors: clean energy, biomedical technology, financial services, information technology, silicon technology, transportation equipment manufacturing, or be a corporate headquarters facility. Projects must also create a minimum of 100 jobs and invest at least $25 million in eligible capital costs. Eligible capital costs include all expenses incurred in the acquisition, construction, installation, and equipping of a project from the beginning of construction to the commencement of operations. The level of investment and the project’s Florida corporate income tax liability for the 20 years following commencement of operations determines the amount of the annual credit.

INCUMBENT WORKER TRAINING (IWT): A program that provides training to currently employed workers to keep Florida’s workforce competitive in a global economy and to retain existing businesses. It is available to all Florida businesses that have been in operation for at least one year prior to application and require skills upgrade training for existing employees. Priority is given to businesses in targeted industries, Enterprise Zones, HUB Zones, Inner City Distressed areas, Rural Counties and areas, and Brownfield areas.
GEORGIA

JOB/INVESTMENT TAX CREDITS: Available to a business or to its headquarters engaged in any of the following six categories: Manufacturing, Telecommunications, Warehouse Distribution, Research & Development, Processing and Tourism. Taxpayers may choose between job tax credits or investment tax credits. Job tax credits range from $4,000 to $750 per job each year for 5 years.

QUALITY JOBS TAX CREDIT: Companies that create at least 50 jobs in a 12 month period where each job pays wages at least 110 percent of the county average are eligible to receive a tax credit of $2,500-$5,000 per job, per year, for up to five years, based on a scaled system. New quality jobs created within seven years can qualify for the credit. Credits may be used to offset the company’s payroll withholding once all other tax liability has been exhausted, and may be carried forward for 10 years.

SALES AND USE TAX INVENTORY TAX EXEMPTION: Manufacturing production machinery is exempt from state and local sales tax, as well as machinery or components bought to upgrade or replace existing machinery; additionally, the exemption covers re-manufacturing of aircraft engines and components. This has been extended to warehouses and distribution centers; their primary material handling equipment is exempt from sales tax if the company invests $5 million or more in a new or expanded facility. Computer equipment that is purchased or leased for use at the facilities of a high technology company is exempt when the total purchase (or lease) value exceeds $15 million. Machinery, equipment and materials purchased and used in a clean room of Class 100 or less are exempt. Electricity interacting directly with a manufactured product is exempt if the total cost of the electricity is more than half the cost of all materials used (including electricity) in making the product.
IDAHO

The HIRE ONE TAX CREDIT rewards employers that create new jobs. Business that hire new employees to fill newly created positions can receive a refundable income tax credit for the gross wages paid during the first 12 months of employment. The new employer must make at least $12 an hour in counties where the unemployment level is 10 percent or higher and $15 an hour in counties with unemployment below 10 percent. The amount of the refund is based on the employer’s unemployment insurance tax rating.

Idaho Business Advantage: Businesses that invest a minimum of $500,000 in new facilities and create at least 10 new jobs averaging $40,000 annually, plus benefits qualify for a variety of incentives:

a. An enhanced Investment Tax Credit of 3.75 percent up to $750,000 OR 62.5 percent of tax liability in any one year.

b. A new jobs tax credit starting at $1,500 and climbing to $3,000 per job (note, this section may be used in lieu of the Hire One Tax Credit)

c. A 2.5 percent real property improvement tax credit up to $125,000 in any one year along with a 25 percent rebate on sales tax paid on construction materials for the new facilities

d. Upon request of the company, the respective county commissioners may also authorize a full or partial property tax exemption.

Customized Workforce Training is tailored to the specific needs of the company and designed to develop skills for their precise requirements. Financial reimbursement up to $3,000 per employee is available to eligible companies to cover the cost of training new employees or retaining ones facing permanent layoff.
ILLINOIS

The ECONOMIC DEVELOPMENT FOR A GROWING ECONOMY (EDGE) incentive program encourages companies to locate or expand operations in Illinois when there is active consideration of a competing location in another state. The program can provide tax credits to qualifying companies, equal to the amount of state income taxes withheld from the salaries of employees in the newly created jobs. The non-refundable credits can be used against corporate income taxes to be paid over a period not to exceed 10 years.

The EMPLOYER TRAINING INVESTMENT PROGRAM (ETIP) supports companies in retraining their employees to stay competitive. Through the program, Illinois companies are reimbursed for up to 50 percent of eligible training costs. Potential reimbursements include trainers, tuition, trainee wages and fringes, new technology or processes, new machinery, regulatory compliance, and a continuous improvement system.

The LARGE BUSINESS DEVELOPMENT PROGRAM (LBDP) is for companies undertaking a major expansion or relocation. Funds may be used by large businesses for bondable business activities including financing the purchase of land or buildings; building construction or renovation; and certain types of machinery and equipment.

The COMMUNITY DEVELOPMENT ASSISTANCE PROGRAM FOR ECONOMIC DEVELOPMENT (CDAP-ED) is a federally funded program designed to provide grants to units of local government for economic development activities related to private business retention or expansion. Local governments can make their grant funds available as loans to businesses growing or moving to their community. Funds may be used for machinery and equipment, working capital, and building construction and renovation.

Illinois is receiving an allotment of funds to accelerate private investment and ease the credit crunch for small businesses through the federal STATE SMALL BUSINESS CREDIT INITIATIVE of the Small Business Jobs Act of 2010. The particulars of Illinois’ program will be announced in fall 2011. Illinois’ program is expected to feature three programs to spur institutional lending to businesses up to 750 employees, and one program to leverage private venture capital in start-ups and high-growth businesses.

The ANGEL INVESTMENT CREDIT PROGRAM offers a tax credit to interested firms or persons who make an investment in one of Illinois’ innovative, qualified new business ventures. The tax credit may equal 25 percent of up to a $2 million investment made by the private investor.

More details on these programs are available through the Illinois Department of Commerce and Economic Opportunity at www.ildceo.net.
INDIANA

CORPORATE TAX RATE: Indiana’s corporate tax rate was reduced from 8.5 percent to 6.5 percent. This will be phased in from July 1, 2012 to July 1, 2015. The legislature reduced this tax in order to improve upon Indiana’s existing business climate and bring it more in line with rates in other states.

VENTURE CAPITAL INVESTMENT (VCI) TAX CREDIT: The $200 filing fee was eliminated for two years until June 30, 2013. The VCI tax credit cap per qualifying business was raised from $500,000 to $1 million. This change provides greater opportunities for young companies to attract capital and grow in Indiana.

PROPERTY TAX ABATEMENT: The law was changed to allow local governments the flexibility to structure the property tax abatement schedules however they wish over ten years. The previous statute defined the schedule. This will give local economic development leaders more control over the incentive packages they offer to companies.

INDUSTRIAL RECOVERY TAX CREDIT: The General Assembly reduced the statutory thresholds in order to allow more vacant buildings in the state to be eligible for this program. The minimum in-service period for building was reduced from 20 to 15 years. The minimum vacancy period was reduced from two to one year. The minimum square footage for building requirement was reduced from 250,000 square feet (50,000 square feet from 2011 to 2014 and 100,000 square feet starting in 2015). These changes may help bring more vacant facilities back into service by providing an incentive to companies for rehabilitation expenses.
IOWA

The Grow Iowa Values Fund (GIVF) is the state’s premier financial assistance program designed to support innovation and job growth. A variety of business development programs are available as included below:

* DIRECT ASSISTANCE TO A COMPANY: Assistance is provided in the form of loans and/or forgivable loans, based in part on job creation, capital investment, the ability to meet certain regional/county wage standards, quality of employment, and economic benefits for the state and local community. Applications are filed by cities, counties or community colleges on behalf of eligible businesses.
* The GROW IOWA VALUES FINANCIAL ASSISTANCE PROGRAM serves as the funding source for projects that are focused on job creation or retention, value-added agriculture and entrepreneurial efforts. This program, combined with Iowa’s nationally recognized business climate, tax incentives and proactive state government make Iowa a great place to do business.
* The DEMONSTRATION FUND provides financial awards up to $150,000 to encourage commercialization activities by small and medium-sized Iowa companies in the advanced manufacturing, biosciences, and information technology industries. The fund is designed to encourage product refinements, market planning and market entry activities of unique products to foster competitive, profitable companies that create high paying jobs and wealth in Iowa.
* Infrastructure component: Designed to financially assist capital-intensive infrastructure projects that create unique opportunities for quality, high-wage jobs and demonstrate a statewide impact. Both Iowa communities and new or existing businesses are eligible for this innovative program. This program may also be used to remediate contaminated sites that have potential development opportunities contingent on the cleanup. Assistance is provided in the form of loans, forgivable loans and cost indemnification agreements.
* The Public Facilities Set-Aside (PFSA) program provides financial assistance to cities with less than 50,000 in population and to counties for public infrastructure improvements that enable businesses to create new job opportunities. Projects that will create manufacturing jobs, add value to Iowa resources and/or increase out-of-state exports will be given priority. Eligible projects include adding or improving sanitary sewer systems, water systems, streets, roads, and storm sewers.

KANSAS

The PROMOTING EMPLOYMENT ACROSS KANSAS (PEAK) program offers qualified companies the ability to retain 95 percent of their payroll withholding tax for up to five to seven years. PEAK is available to new operations in Kansas as well as relocated operations to the state. In 2013, it will be available for qualifying business retention projects as well. Companies need to create at least 10 new jobs within two years in metropolitan areas or five new jobs within two years in all other counties of the state. High-impact projects that create 100 new jobs within two years can retain 95 percent of payroll withholding tax for up to seven to 10 years. The number of years that the withholding tax can be retained depends on how much the annual median or average wage of the jobs at the Kansas worksite will exceed the current county median wage and the discretion of the Secretary of the Kansas Department of Commerce.

The HIGH PERFORMANCE INCENTIVE PROGRAM (HPIP) provides a 10 percent corporate income tax credit on the qualified capital investment of an eligible company. Qualified capital investment can include such items as the purchase or lease of a facility or equipment, remodeling or build-out costs, fixtures, furniture and computers. Equipment transferred to Kansas from out-of-state is also credited at the original acquisition cost. The 10 percent tax credit is awarded to companies that operate an eligible business, pay above-average wages and invest in employee training. The credits can be used to significantly reduce a company’s corporate income tax liability in a given year. Credits must be used within a consecutive 16 year period. The minimum investment threshold to qualify for HPIP is $1.0M for urban counties of Douglas, Johnson, Sedgwick, Shawnee and Wyandotte. For all other counties, the minimum investment threshold is $50,000.

MACHINERY & EQUIPMENT EXPENSING DEDUCTION: Effective January 1, 2012, Kansas taxpayers will be allowed to claim an expense deduction for business machinery and equipment, placed in service in Kansas during the tax year. The one-time deduction is allowed for each qualified purchase of machinery and equipment in the year that it is placed in service. The expensing deduction is representative of the difference between the cost of the item and the present value of the stream of depreciation deductions allowed under normal federal depreciation rules. Any unused expense deduction may be carried forward until fully claimed in future years. If the property is relocated outside Kansas or disposed of before the end of its federal depreciable life, the amount of the tax liability relieved by the deduction may be subject to repayment.

The RURAL OPPORTUNITY ZONES PROGRAM (ROZ) is designed to reverse dramatic population declines over the past decade in rural areas of Kansas. The program is to spur economic development in and expand job growth in 50 counties around the state. The program has two main incentives:

* A state income tax exemption for up to five years to individuals who move to a ROZs county from outside the state. Individuals must not have lived in Kansas for the past five years, nor have Kansas source income of more than $10,000 per year over the past five years.
* Student loan forgiveness of up to $3,000 per year ($15,000 maximum benefit) for individuals who graduate from an accredited post-secondary institution and move to a ROZs county. The student loan forgiveness portion of the program is a county-state partnership, and counties must opt in to participate.

WIND AND SOLAR BOND FINANCING: This allows for up to $5 million in bond financing per project for eligible wind and solar energy manufacturers. The bonds are paid off from the payroll withholding tax of the new jobs. To qualify, a project must create at least 200 new jobs within five years, pay at least a $32,500 average salary and generate a minimum capital investment of $30 million.

KANSAS ECONOMIC OPPORTUNITY INITIATIVES FUND: The Department of Commerce can provide a zero-percent interest forgivable loan to qualified companies. This loan can offset costs associated with the establishment of a new facility or the expansion of an existing facility. Eligible costs include site improvements, construction, build-out and purchases and relocation of machinery and equipment. The loan is forgiven in 20 percent annual increments over a five-year period based on meeting the job and payroll targets. Approval of funding for this program is based on the number of new jobs created, the level of wages paid to the new employees and the economic impact of the project.
KENTUCKY

The KENTUCKY BUSINESS INVESTMENT (KBI) program provides income tax credits and wage assessments to new and existing agribusinesses, regional and national headquarters, manufacturing companies, and non-retail service or technology related companies that locate or expand operations in Kentucky. Projects locating in certain counties may qualify for enhanced incentives.

The KENTUCKY REINVESTMENT ACT (KRA) provides tax credits to any existing Kentucky company engaged in manufacturing and related functions on a permanent basis for a reasonable period of time who will be investing in eligible equipment and related costs of at least $2,500,000.

The KENTUCKY ENTERPRISE INITIATIVE ACT (KEIA): For new or expanded service or technology, manufacturing, or tourism attraction project in Kentucky. KEIA provides a refund of Kentucky sales and use tax paid by approved companies for building and construction materials permanently incorporated as an improvement to real property. It is also available for Kentucky sales and use tax refunds for eligible equipment used for research and development and data processing equipment.

The KENTUCKY SMALL BUSINESS INVESTMENT CREDIT (KSBIC): program is designed to encourage small business growth and job creation by providing a nonrefundable tax credit to eligible businesses hiring one or more eligible individuals and investing at least $5,000 in qualifying equipment or technology. With certain exceptions, most for-profit businesses with 50 or fewer full-time employees are considered eligible for this program. The KSBIC program is limited to allocating a total of $3 million in tax credits per state fiscal year.
LOUISIANA

LOUISIANA FASTSTART™ is a workforce development program, providing customized workforce recruitment, screening, training development and training delivery to eligible, new or expanding companies – all at no cost. Any manufacturing, corporate headquarters, warehouse and distribution, research and development or other strategic facility must create at least 15 jobs; and, service providers must create at least 50 jobs.

The QUALITY JOBS PROGRAM provides a 5 percent or 6 percent rebate on annual payroll expenses for up to 10 years, and either a 4 percent sales/use tax rebate on capital expenditures or an investment tax credit equal to 1.5 percent of qualifying expenses. A project must create at least 5 jobs, and there are no minimum investment requirements. The program is eligible to businesses that fall within one of the state’s target industries or have total annual out-of-state sales of at least 50 percent.

The DIGITAL MEDIA AND SOFTWARE INCENTIVE provides a 25 percent refundable tax credit on qualified production expenditures and a 35 percent refundable tax credit for Louisiana resident labor expenditures. There are no minimum investment requirements and no cap on costs. The incentive is eligible to digital interactive media productions in Louisiana, excluding largely static Internet sites and products regulated under the Louisiana Game Control Law.

The MEGA-PROJECTS DEVELOPMENT FUND provides grants of up to 30 percent of the total cost of a project that creates or retains at least 500 direct jobs or that provides a major investment in the state. A project must create 500 direct jobs, create or save at least 500 direct jobs at a facility that has been closed or a facility that risks closure, or provide a minimum initial investment of $500 million through the creation of a new facility or the expansion of an existing facility. In addition, the project must provide a substantial return on the investment by the state as measured by projected tax revenues.

The RESEARCH AND DEVELOPMENT TAX CREDIT provides a refundable tax credit of up to 40 percent to businesses that conduct research and development activities (or secure certain federal SBIR/STTR grants) within Louisiana. The tax credit depends on the number of Louisiana resident employees. Companies who incur research and development expenses may be able to receive credits against state income and corporate franchise taxes. Companies whose research and development tax credits exceed their tax liabilities receive a refund from the state.
MARYLAND

INVEST MARYLAND: Designed to unlock capital for early-stage companies, InvestMaryland will fuel investment in our innovation economy, capitalize small and minority businesses, and replenish the DBED-administered Maryland Venture Fund. The program is effective January 2011 with first round of funds available by June 2012. The program will provide $100 million in insurance premium tax credits that will be auctioned to raise venture capital for the State’s entrepreneurs. Two-thirds of the funds will be invested on behalf of the State by private venture capital firms, while the Maryland Venture Fund and the Maryland Small Business Development Financing Authority will administer the remaining one-third. The bill also allocates $250,000 to the Rural Maryland Council, an organization that promotes the State’s natural resource based industries.

STATE SMALL BUSINESS CREDIT INITIATIVE: Passed as part of President Obama’s Small Business Jobs Act of 2010, this initiative awarded Maryland with $23 million to strengthen existing financing programs that support lending to small businesses. The State is allocating the funds to programs that leverage private lending to help finance small businesses that are creditworthy, but are not getting the loans they need to expand and create jobs.

MARYLAND ECONOMIC DEVELOPMENT ASSISTANCE AUTHORITY AND FUND: There are five financing capabilities offered through the Maryland Economic Development Assistance Authority and Fund (MEDAAF), with assistance being provided to the business community and political jurisdictions. To qualify for assistance from MEDAAF, applicants are restricted to businesses located within a priority funding area and an eligible industry sector. With a few exceptions, assistance cannot exceed 70 percent of the total project costs.

COMMUNITY DEVELOPMENT BLOCK GRANT PROGRAM: Provides funding to commercial and industrial economic development projects. Program funds are dispersed to a local jurisdiction in the form of a conditional grant and are then used for public improvements or loaned to a business.

MARYLAND VENTURE FUND: A state-funded seed and early-stage equity fund; an evergreen fund that receives annual allocations from the Maryland State Legislature. The Fund makes direct investments in technology and life science companies and indirect investments in venture capital funds. Approximately 60 percent of the Fund is invested in technology companies in the areas of software, communications, and IT security, and 40 percent of the Fund is invested in life sciences companies in the areas of therapeutics, medical devices, and diagnostics.

CHALLENGE INVESTMENT PROGRAM: Provides financing for seed-stage companies to cover a portion of the initial costs associated with bringing new products to market. Initial investments of $50,000 to $100,000 are made with incremental investments to a maximum of $150,000. These incremental investments are awarded based upon the client’s performance and the client’s ability to achieve milestones set by the Maryland Venture Fund at the time of the initial closing.
MICHIGAN

BUSINESS TAX REFORM: The unpopular Michigan Business Tax (MBT) will be replaced effective January 1, 2012 with a simpler and competitive corporate income tax. What does this mean? All industries are in line for significant tax cuts. Lower rates will tax C corporations at 6 percent on federal taxable income apportioned to Michigan. Other entities—individuals, partnerships and LLCs—have income flow to their personal income tax. It is expected that 100,000 businesses will pay no business taxes. The personal income tax rate remains 4.35 percent and is scheduled to decline to 4.25 percent in 2013. The new simplified tax system eliminates a laundry list of MBT credits and deductions. The alternative business income tax for small business remains intact. When the 2012 tax changes take effect, Michigan is projected to rank #13 in the Tax Foundation’s U.S. overall business tax climate ranking, and #22 for corporate taxes, up from #48.

PURE MICHIGAN BUSINESS CONNECT: Michigan businesses now have new ways to buy and sell, raise capital and connect with one another. Pure Michigan Business Connect is a $3 billion public-private economic gardening initiative matching people with resources and strengthening relationships to fuel economic growth, including:

* venture capital, debt financing, collateral support, other funding assistance
* customized market research
* executive and professional talent search assistance
* training support
* customized site searches
* ombudsman services
* entrepreneur services
* export assistance
* legal services
* matchmaking with Michigan suppliers

NEW INCENTIVE PROGRAMS FOR BUSINESS, COMMUNITY DEVELOPMENT: New economic development and community revitalization programs will provide $100 million in incentives for highly competitive projects in Michigan, beginning on October 1, 2011.

The Michigan Business Development and Michigan Community Revitalization Programs replace the state’s previous MEGA, Brownfield and Historic tax credit programs that were features of the old Michigan Business Tax.

The Michigan Business Development Program will provide grants, loans or other economic assistance of up to $10 million to businesses that are creating qualified new jobs and making new investments in Michigan. Factors to be considered in making these awards include: out-of-state competition, private investment in the project, business diversification opportunities, near-term job creation, wage and benefit levels of the new jobs, and net-positive return to the state. Business retention and retail projects are not eligible for consideration of these incentives.

The Michigan Community Revitalization Program will provide grants, loans, or other economic assistance of up to $10 million to projects that will revitalize regional urban areas, act as a catalyst for additional investment in a community, reuse vacant or historic buildings and promote mixed use and sustainable development.

NEW TALENT PORTAL: Through the MEDC Job Portal, employers can register to post openings and work closely with the MEDC’s Talent Acquisition team to devise strategies to meet their talent needs. Companies posting on the Job Portal will also have access to the MEDC’s other talent acquisition services, including targeted marketing and social media outreach, career events, assistance with identifying relocation services and a triage approach to addressing hard-to-fill positions and hiring challenges. The portal also allows job seekers to search for positions around the state, create profiles and add their resumes to the talent database. The MEDC Job Portal is currently being used in concert with the Michigan Talent Bank. Both systems are working together to effectively connect Michigan’s businesses and job seekers.
MISSISSIPPI

MISSISSIPPI FILM INDUSTRY INCENTIVE: Passed in 2011 and effective immediately, it increases the rebate by 5 percent and expands the definitions of qualified distribution and production to include new technology. The legislation increases the current rebate to 25 percent for qualified local spend and non-resident cast and crew payroll and to 30 percent for Mississippi resident cast and crew payroll. The per project rebate cap remains at $8 million (an approximate $30 million local spend) and the annual cap remains at $20 million. The expanded program added streaming video and Internet delivery as qualified distribution. New technology areas, such as animation, 3D applications, video game cinematics, visual effects and motion capture within the fields of feature film, television, commercials and games, were added as qualified production.
MINNESOTA

DATA CENTER SALES TAX EXEMPTIONS: Enacted in July 2011, Minnesota created a major tax exemption for data center projects. Qualified data centers will receive a 20-year exemption from sales tax on equipment and energy used in the center (Minnesota state sales tax is 6.875 percent.). To be qualified, the data center must be at least 30,000 square feet of new or substantially renovated space, and represent at least $50 million in construction and equipment costs within 24 months. The incentive takes effect July 1, 2012. Minnesota is also blessed with no personal property or inventory tax. Other benefits in Minnesota are cooler climate to reduce cooling costs, low risk for earthquakes and other natural disasters, a robust fiber network, and reasonably priced and abundant energy.
MISSOURI

FILM PRODUCTION TAX CREDIT PROGRAM: Provides a state income tax credit to qualified film production companies up to 35 percent of the company’s expenditures in Missouri for production or production related activities necessary for the making of a film, not to exceed $1 million in tax credits per project. Eligible Applicants include any film production company with an expected instate expenditure budget of at least $100,000 for films over 30 minutes in length and at least $50,000 for films under 30 minutes in length.

LOAN GUARANTEE FEE TAX CREDIT PROGRAM: Provides state tax credits to an eligible small business—defined in Section 44 of the IRS code, must (in the prior tax year) have gross receipts of less than $1 million; or if more than $1 million, less than 30 full time employees—for the amount of a guarantee fee paid to either the U.S. Small Business Administration or the U.S. Department of Agriculture for a small business loan. There is no limit on the amount per business or total amount distributed annually.

ENHANCED ENTERPRISE ZONE: Provides state tax credits to new or expanding businesses in a Missouri Enhanced Enterprise Zone. Can be applied to Ch. 143 Income tax, excluding withholding tax and can only be applied to tax liability for the year in which they were earned. Tax credits will be based on the state economic benefit, supported by the number of new jobs, wages and new capital investment that the project will create. Tax credits issued under this program are limited to $24,000,000 annually.
NEBRASKA

The four-part TALENT & INNOVATION INITIATIVE(TI2) was developed to enhance momentum in Nebraska’s fastest growing industries and others positioned to integrate new technologies:

* Nebraska Internship Program is a partnership with Nebraska businesses to create new, paid internship opportunities for college and university students. The program will create opportunities for 500 to 750 juniors and seniors studying at four-year institutions or students in their second year at a Nebraska community college to gain job experience. Awards will be made on a first-come, first-serve basis to companies creating new internship opportunities, which are capped at 10 per business. Internships will pay at least minimum wage and range from 12 week to year-long programs. Grant amounts are lesser of 40 percent of reimbursable costs or up to $3,500 in non-distressed areas, and lesser of 60 percent of reimbursable costs or up to $5,000 in distressed areas. Nebraska Internship took effect on June 1.
* Business Innovation Act is intended to help businesses develop new technologies to enhance quality job opportunities in the state. It will provide competitive grants for research at Nebraska institutions, new product development and testing, and help expand small business and entrepreneur outreach efforts. It will expand grant opportunities within targeted industries to help businesses providing matching funds with prototype development, commercialization and applied research in the state, and provide assistance for microenterprise projects. The Business Innovation Act takes effect Oct. 1.
* Site & Building Development Fund is intended to help increase industrial and commercial sites available and ready for business development. Communities will provide matching funds toward projects that can involve demolition, new construction and rehabilitation. State funding will be focused on land and infrastructure costs with 40 percent of funding available to non-metro areas. This fund takes effect Oct. 1.
* Angel Investment Tax Credit encourages investment in high-tech and other startup enterprises in Nebraska by providing refundable state income tax credits to qualified investors investing in qualified early-stage companies. Capped at $3 million annually, the program requires a minimum investment of $25,000 for individuals and $50,000 for investment funds. Eligible small businesses must have fewer than 25 employees, with the majority based in the state. Applications begin August 4, and credits are effective after September 1.

The NEBRASKA PROGRESS LOAN FUND (NPLF) will be available for permanent loans to qualifying small businesses, generally, representing existing and startup businesses. The minimum loan to any one business will be $50,000, with a maximum of $2 million. NPLF can also be provided for interim loans to qualifying small businesses for a term not to exceed three years. An interim loan maximum amount is $5 million. Loan terms will be negotiated on a case-by-case basis with a typical loan interest rate ranging from 0 percent to 4 percent. More favorable terms for the business will be a consideration for businesses located in census tracts or counties considered severely distressed. Principal and interest payments may be deferred for three years, with periodic interest payments due until loan maturity.

The NEBRASKA PROGRESS SEED FUND (NPSF) is designed to accelerate private investment in Nebraska-based start-up companies and increase overall investment impact. Through NPSF, Invest Nebraska Corporation will award seed capital funds that match private angel fund investments. The seed capital may be used by the start-up company for advanced intellectual property development and evaluation, including in-depth analysis of market potential, conducting competitive analysis, advanced proof of concept work for scientific discovery, advanced prototype design and development, research and development needed to attract venture capital financing, hiring key personnel, and related activities.
NEVADA

CATALIST FUND: Nevada recently authorized the use of $10 million in general fund money to spur economic development through corporate expansions and relocations in Nevada. Working in connection with local governments, companies can apply to the state with an eligible economic development project for an allocation from the fund. Since this is a new program, the rules and regulations are currently in development and are expected be in place by January 1, 2012.

A SALES AND USE TAX ABATEMENT on eligible machinery and equipment is available to businesses with operations consistent with Nevada’s state plan for economic diversification and development. Qualifying criteria include a commitment to doing business in Nevada, minimum job creation, capital investment, employee heath plans, and wage requirements.

SALES TAX DEFERRAL: The state of Nevada offers a sales & use tax deferment program to qualified industries that purchase capital equipment in excess of $100,000. Taxes can be deferred interest free for up to five years.

An abatement of PERSONAL PROPERTY TAX is available to businesses with operations consistent with Nevada’s state plan for economic diversification and development. Qualifying criteria include a commitment to doing business in Nevada, minimum job creation, employee health plans, minimum capital investment, and wage requirements. Taxes may be abated for up to 50 percent for up to ten years.

RENEWABLE AND ENERGY STORAGE ABATEMENTS are available for companies involved in the production of energy from renewable sources such as wind, solar, and others, or a facility for the production of an energy storage device. The package of abatements includes sales/use tax and real and personal property tax.

MODIFIED BUSINESS (PAYROLL) TAX ABATEMENTS provide partial abatement from the payroll tax for new and expanding businesses. Statutory requirements, which must be met to qualify, include a minimum number of jobs created, a minimum capital investment, and wage and employee health plan requirements. Taxes may be abated by 50 percent for four years.

TRAIN EMPLOYEES NOW (TEN): Nevada offers a customized job training program to qualified businesses that meet established criteria. This program may be used prior to a plant opening and up to 90 days following.

Nevada is authorized to use tax-exempt INDUSTRIAL DEVELOPMENT BONDS (IDBs) to provide low-interest financing of new construction, improvements, rehabilitation, or redevelopment of qualified projects, which include manufacturing facilities and certain other projects organized under Section 501 of the Internal Revenue Service code.
NEW HAMPSHIRE

ECONOMIC REVITALIZATION ZONE TAX CREDITS (erz): Short term, tax credits against the business profits and enterprise taxes. To qualify, the location must meet certain demographic criteria, or be located in an unused or under utilized industrial park, or vacant land, or structures previously used for industrial, commercial, or retail purposes but currently not so used, or Brownfield site. The maximum credit over five years is $200,000, capped at $40,000 per year.

R&D TAX CREDIT: Small and large businesses can apply for tax credit on new research and development costs. The state has set aside $1million a year to fund the credit which is capped at $50,000 for any business that qualifies. This credit may be carried forward for up to five years.

COMMUNITY DEVELOPMENT BLOCK GRANT (CDBG): This assistance can be in the form of a grant to the municipality for the public infrastructure improvements on behalf of an expanding business or a loan to the business itself. The maximum amount of funding available for any given project is $500,000, regardless of size of the community applying for the grant. All grants have a one-year duration, and one job must be created for each $20,000 in CDBG funds granted. The key to this federal program is that a minimum of 60 percent of the jobs created must be filled by low and moderate-income persons.

The JOB TRAINING GRANT PROGRAM is a 50/50 cash match for customized training. There is a $100,000 cap on the training amount. Each application is reviewed on a case by case basis with an emphasis on improving the skills of current or new employees.

The COOS County Job Creation Tax Credit is a tax credit to businesses hiring new employees in COOS County and paying wages equal to or above 200 percent of minimum wage ($7.25 per hour). The credit is $1,000 for any new, full-time, year-round jobs applied to the Business Enterprise Tax, but any unused portion of the credit can be applied to the Business Profits Tax. All new jobs created after the bill’s effective dates are eligible for the credit and there is no cap on the amount of jobs created. The carry forward is five years.

INDUSTRIAL REVENUE BONDS: This program is for manufacturers only – companies which manufacture or produce tangible personal property. At least 75 percent of bond proceeds must be spent on core manufacturing space and equipment. Storage, office and R&D space must be excluded from this calculation. To be cost effective, loans must range between 1.5 and 20 million dollars. The interest rate is about 70 percent of prime and can be used for the purchase of land, buildings, and capital equipment.

NH-CDFA TAX CREDITS: The New Hampshire Community Development Finance Authority (CDFA) awards up to $5 million a year in New Hampshire Tax Credits to nonprofit organizations. These organizations then sell the Tax Credits to New Hampshire businesses as a way to raise needed capital for community projects around the state. In exchange for the contribution, a company can take 75 percent of the donation as a tax credit on their BET, BPT, or Insurance Premium Tax.
NEW JERSEY

NEW JERSEY PARTNERSHIP FOR ACTION: A three-pronged public-private approach to economic development and the starting point for all initiatives, policies and efforts to grow New Jersey’s economy and create quality, sustainable jobs in our communities. The three elements of the Partnership include Choose New Jersey, an independently funded and operated 501(c)(3) nonprofit corporation created to encourage and nurture economic growth throughout New Jersey; the Business Action Center, which reports directly to the Lieutenant Governor and provides the business community with a single point of contact, applying a proactive, customer-service approach to businesses’ interactions with State government; and, the New Jersey Economic Development Authority (EDA), serving as the state’s “bank for business.”

The ECONOMIC REDEVELOPMENT AND GROWTH (ERG) PROGRAM is a reimbursement incentive that enables developers to use up to 75 percent of new State and/or local incremental taxes generated from a project to fund financing gaps. The program provides up to 20 percent of the total project cost, paid out over a period of up to 20 years. Redevelopment projects in qualifying areas that have secured a municipal ordinance and demonstrated sufficient net benefits may be eligible for assistance.

URBAN TRANSIT HUB TAX CREDIT PROGRAM: A financial tool designed to spur private capital investment, business development and employment by providing tax credits for businesses planning a large expansion or relocating to one of New Jersey’s designated Urban Transit Hubs. The program offers developers, owners or tenants up to 100 percent of a qualified capital investment made within an eight period. Taxpayers may apply 10 percent of the total credit amount per year over a ten-year period against their corporate business tax, insurance premiums tax or gross income tax liability. Developers or owners must make a minimum $50 million capital investment in a single business facility, and at least 250 full-time employees must work at that facility. Tenants in a qualified business facility can represent at least $17.5 million of the capital investment in the facility, and up to three tenants may aggregate to meet the 250 employee requirement.

The BUSINESS EMPLOYMENT INCENTIVE PROGRAM (BEIP) is a powerful incentive that encourages businesses to locate and expand in New Jersey. Approved businesses receive annual cash grants based on the number of new jobs created in the State. In order to qualify, businesses must create at least 25 new jobs within a 2-year period; emerging high technology and biotech companies’ eligibility threshold is 10 new jobs. A business must also demonstrate that the BEIP grant is a “material” factor in moving the job expansion or relocation forward in New Jersey, and that it is economically viable. The standard BEIP incentive is limited at 50 percent of the employees’ state income taxes withheld on the newly created jobs; however, companies that meet certain Smart Growth objectives can have their grant boosted to 80 percent. Qualifying businesses may be eligible for up to 10 years worth of grants, though they must maintain the project and the jobs in New Jersey for at least 1.5 times the number of years the grant is in effect.

The BUSINESS RETENTION & RELOCATION ASSISTANCE GRANT (BRRAG) is a recently enhanced program designed to help companies preserve jobs, expand operations and reinvest in New Jersey. The program provides corporate business tax credits to companies that are relocating operations within New Jersey and retaining at least 50 full-time jobs. Up to $2,250 per year for up to six years is now available per each job retained in the State. The award amount is dependent on the application of “bonus credits,” which may be available for the relocation of jobs to urban centers, and/or for a capital investment at least twice that of the value of the awarded credits. The number of times the yearly tax credit amount is awarded is dependent on the number of retained jobs. Companies must commit to remaining in the State for the tax credit term and an additional five years. For leased project locations, the business must sign a written lease for a period of no less than the commitment duration or eight years, whichever is greater. The total amount of credits that can be applied against a single company’s tax liability in a fiscal year may not exceed $10 million.

SALES AND USE TAX EXEMPTION PROGRAM (STX), a program often used in conjunction with BRRAG that offers companies a sales tax exemption certificate which applies only to property purchased for installation at the approved project site. This certificate allows the business to purchase machinery, equipment, furniture, fixtures, and building materials for the project without the imposition of the state’s 7 percent sales tax. Eligible companies must have 1,000 or more employees in New Jersey and relocate 500 or more to a new business location. Life sciences or manufacturing companies may be eligible if they relocate 250 or more employees to a new facility. Companies must maintain the retained full-time jobs in New Jersey for five years.
NEW MEXICO

RESEARCH AND DEVELOPMENT TAX CREDIT: In 2011, the New Mexico Legislature passed House Bill 273, reinstating the bill that would have sunset. This bill extends the eligibility period for the Research and Development Small Business Tax Credit from 2011 until 2015 and limits the credit.

The ALTERNATIVE ENERGY PRODUCT MANUFACTURES TAX CREDIT: In 2011, the legislature passed Senate Bill 233, which amends the alternative energy product manufacturers tax credit act to include a product extracted from or secreted by a single cell photosynthetic organism as an eligible alternative energy product.

LOCOMOTIVE FUEL TAX DEDUCTION: In 2011, the legislature passed House Bill 523, which provides a deduction for locomotive fuel from gross receipts and from compensating tax.
NEW YORK

REGIONAL ECONOMIC DEVELOPMENT COUNCILS: Governor Cuomo’s new Regional Councils represent a fundamental shift in New York State’s approach to economic development, from a top-down development model to a community-based approach that empowers regions to set their own development priorities. Each Regional Council, chaired by Lieutenant Governor Robert Duffy and made up of local industry, academic, and community leaders, will create a plan for the development of their region. Through a new Consolidated Funding Application that combines resources from dozens of existing programs, the Councils will apply for $1 billion in state funding for projects they determine to be part of their regional strategies. To learn more about the Regional Councils, please visit www.nyopenforbusiness.com.

EXCELSIOR JOBS PROGRAM: Governor Cuomo’s 2011-2012 Executive Budget revised the Excelsior Jobs Program to produce better results for New York’s strategic industries through enhanced tax credits, an extended tax benefit period, discounted gas or electric rates from utilities, and increased responsiveness and transparency. The Program provides job creation and investment incentives to firms in such targeted industries as biotechnology, pharmaceutical, high-tech, clean-technology, green technology, financial services, agriculture and manufacturing. Firms in these industries that create and maintain new jobs or make significant financial investment are eligible to apply for up to four new tax credits. Excelsior encourages businesses to expand in and relocate to New York while maintaining strict accountability standards to guarantee that businesses deliver on job and investment commitments. Program costs are capped at $500 million annually to maintain fiscal affordability and ensure that New Yorkers realize a positive return on their investment. To learn more about the Excelsior Jobs Program, please visit www.esd.ny.gov/BusinessPrograms.html.
NORTH CAROLINA

ARTICLE 3J TAX CREDITS: North Carolina offers several types of tax credits to eligible taxpayers that undertake qualifying initiatives. One class of these credits, the Article 3J Tax Credits, may be used to offset up to 50 percent of the taxpayer’s state income and/or franchise tax liability, and unused credits may be carried forward for up to five years. Article 3J offers credits for:

* Creating jobs – Companies who meet a minimum threshold of new fulltime jobs created during the taxable year may claim a credit.
* Investing in business property – Companies can claim a credit based on a percentage of the cost of capitalized tangible personal property that is placed in service during the taxable year.
* Investment in real property – Companies located in a Tier 1 County (see below) that invest at least $10 million in real property within a three-year period and create at least 200 new jobs within two years are allowed a credit equal to 30 percent of the eligible investment.

CHANGES TO ARTICLE 3J IN 2011:

* Modifies the criteria applicable to companies that take the Article 3A tax credits to allow a company, otherwise required to maintain 200 employees, to take remaining credit installments if employment is above 125 and if the taxpayer makes an investment equal to $5,000,000 or greater than twice the amount of the remaining installments at the facility within two years of the employment level falling below 200.
* Establishment of port enhancement zones within 25 miles from a port allowing an Article 3J credit under certain conditions beginning 7/1/2013. The North Carolina Department of Commerce will publish a list of all PEZ and boundary descriptions annually.

TAX CHANGE FOR SMALL AND START-UP BUSINESS: This applies to calculating the North Carolina taxable income. A taxpayer may now deduct the first $50,000 of net business income the taxpayer receives during the taxable year.

RENEWABLE ENERGY TAX CREDITS: North Carolina’s various renewable-energy tax credits are unified into a statute that addresses nearly all renewables. The statute provides tax credits eligible for the cost of equipment and associated design; construction costs; and installation costs by a taxpayer and placed into service in North Carolina during the taxable year. The credit is subject to various ceilings depending on sector and the type of renewable-energy system. The following credit limits for various technologies and sectors apply:

* A maximum of $3,500 for non-business solar energy equipment for active space heating, combined active space and domestic water-heating systems, and passive space heating;
* A maximum of $1,400 for non-business solar water-heating systems, including solar pool-heating systems;
* A maximum of $10,500 for renewable-energy systems for non-business use;
* A maximum of $8,400 for geothermal equipment installation;
* A maximum of $2,500,000 for solar, wind, hydro, geothermal and biomass applications on commercial and industrial facilities, including photovoltaic (PV), daylighting, solar water-heating and space-heating technologies.

OHIO

Ohio JOB CREATION TAX CREDIT: Provides corporate franchise or state income tax credit for businesses that expand or locate in Ohio for companies that incur tax liability under ORC Sections 5733.06 or 5747.02. Program will provide a tax credit against the Commercial Activity Tax (CAT) beginning on July 1, 2008.Insurance companies that pay the annual franchise tax under ORC Sections 5725.18/5729.03 are eligible for the tax credit beginning July 1, 2005.

Ohio JOB RETENTION TAX CREDIT: Provides corporate franchise or state income tax credit for businesses that commit to retain a significant number of full-time jobs. Program will provide a tax credit against the Commercial Activity Tax (CAT) beginning on July 1, 2008.

Ohio RESEARCH AND DEVELOPMENT INVESTMENT TAX CREDIT: Provides a nonrefundable tax credit against the corporate franchise tax and is designed to encourage Ohio’s corporations to invest in increased research and development activities. The credit equals 7 percent of the excess amount of Qualified Research Expenses.

RESEARCH AND DEVELOPMENT SALES TAX EXEMPTION: Provides an exemption from the usual state and county sales tax for companies that purchase equipment for research and development activities. Exempts business from entire state and county sales tax for purchases of machinery and equipment used primarily for research and development.

MANUFACTURING MACHINERY & EQUIPMENT SALES TAX EXEMPTION: Provides an exemption from state and county sales tax for companies that purchase machinery and equipment for manufacturing activities. Exempts business from entire state and county sales tax for purchases of machinery and equipment used primarily for manufacturing.

TECHNOLOGY INVESTMENT TAX CREDIT: Offers a variety of benefits to Ohio taxpayers who invest in small, research and development and technology-oriented forms. This incentive provides a tax credit for taxpayers that invest in small, Ohio-based technology companies. The amount of the tax credit is 25 percent (or 30 percent in some limited cases) of the amount invested by the taxpayer. The maximum investment to which this credit may be applied is $250,000 (or $300,000). The credit may be claimed against personal income tax, corporate franchise tax, public utility excise tax or the dealers in intangibles tax.
OKLAHOMA

The Quality Jobs 10-Year Cash Incentive provides cash payments of up to 5 percent of new payroll for up to 10 years. To qualify, the company must have an average county wage or $29,745, whichever is lower, achieve $2.5M annual payroll within 3 years, and offer basic health insurance. Target industries include: manufacturing, R&D including wind power manufacturing, corporate services, and data centers.

INVESTMENT/NEW JOBS TAX CREDIT PACKAGE: The program allows a company to choose between a tax credit based on investment or new employees. The 5-year tax credit applies to the greater of 1 percent per year of investment in new depreciable property of $500 per new employee and the credit doubles in Enterprise Zones and if the investment exceeds $40 million. Target industries include manufacturing and aircraft maintenance operations.

The 21st Century Quality Jobs 10-Year Cash Back Incentive requires at least 10 full-time jobs at an annual average wage of the lesser of $94,418 or 300 percent of the county’s average wage. It allows a net benefit rate of up to 10 percent of payroll for up to 10 years. To qualify, out-of-state sales must be at least 50 percent. Target industries include: knowledge-based service industries, including professional, scientific and technical services; music, film and performing arts; and specialty hospitals.

The PrimeWIN Prime Contractor Incentive allows federal prime contractors to be paid for jobs and payroll created by both the prime contractor and a qualifying subcontractor. This incentive offers a cash rebate of up to 2 percent of the Oklahoma workforce loaded labor cost and cash incentives paid quarterly for up to 10 years. OSU-UML, as contract verifier, certifies the qualified labor hours performed under a qualifying federal contract.
OREGON

The Oregon Business Expansion and Retention Program is a new tool that creates a state incentive available to existing companies expanding operations in Oregon or new companies coming in to the state. The program helps innovative, knowledge-based industry companies create more high-paying jobs in Oregon by helping to offset a company’s expansion costs with forgivable loans based on the anticipated increase in income tax revenue due the state from the new jobs created. The program is capitalized with Lottery Funds (up to $4 million for 2011-13 biennium). To be eligible, the company must plan to hire 50+ new employees in Oregon; have 150 or more employees at time of eligibility; have employee wages are 150 percent above state average or county average, whichever is less; and must be in a traded-sector industry (excludes retail businesses);

INDUSTRIAL DEVELOPMENT PROJECTS OF STATE SIGNIFICANCE: This new program sets up a process for identifying up to ten “regionally significant” industrial areas per biennium to further job creation. It also establishes an expedited review process and narrows the grounds for appeal. The intention is to protect those industrial lands with the potential for future economic development and job growth from conversion to residential or commercial zoning.

The Manufacturing Business Energy Tax Credit (BETC) (HB 2523) moves to Business Oregon in 2012. The manufacturing credit has been instrumental in growing Oregon’s expanding renewable energy industry. Oregon facilities that manufacture renewable energy resource equipment may be eligible for the credit, which has proven extremely valuable to offset the costs of large capital investments. Eligible costs may include the building, equipment and machinery and other costs used to manufacture equipment, machinery or products designed exclusively to use a renewable energy resource. The facilities are eligible for a tax credit of 50 percent of eligible costs, up to a maximum of $40 million in eligible costs for each phase of development. HB3672 extended the sunset dates to 2018 for a number of important incentive programs and tax credits that support a range of business development activities across the state. These extensions include: the state’s Research & Development Credit, Long-term Rural Enterprise Zones, Electronic-Commerce Zones, the Film and Video Credit, and Biomass credits. In addition, the Oregon Investment Advantage program was extended to July 1, 2016 for rural and distressed Oregon counties seeking to recruit traded sector company development. More info on these programs can be found here.

A complete list of incentives and business climate information can be found at www.Oregon4biz.com/The-Oregon-Advantage/
PENNSYLVANIA

DISCOVERED AND DEVELOPED IN PA PROGRAM (D2PA): Grant established to build capacity to better support Pennsylvania businesses and to spur creativity and innovation in the provision of economic development services. Eligible uses include: Reasonable salary/personnel expenses; Consultant fees relating to approved programmatic activities; land/building/equipment improvements; Meeting/travel expenses; Costs associated with preparation and publishing of educational/marketing materials. Eligible applicants are private and public sector entities whose mission includes economic development. Competitive projects will include ongoing or innovative new activities, programs or events to promote entrepreneurship, encourage technology transfer, improve capacity building for regional economic development or provide outreach to businesses.

PENNSYLVANIA FIRST: A grant, loan, loan-guarantee funding tool to facilitate increased investment and job creation within the Commonwealth. Eligible applicants include businesses, or IDCs, municipalities or authorities on behalf of businesses, which will create or preserve a significant number of jobs, make a large investment and offer substantial economic impact, either for the Commonwealth as a whole or for the locality or region in which a business will locate or expand. Funds can be used for machinery/equipment; job training; infrastructure; land and building improvements; environmental assessment/remediation; acquisition of land, buildings and right-of-ways; working capital; site preparation, demolition and clearance.

KEYSTONE INNOVATION ZONE TAX CREDIT PROGRAM: Provides tax credits to for-profit companies less than eight years old operating within specific targeted industries within the boundaries of a Keystone Innovation Zone (KIZ) Program. Tax credits must be applied against the tax liability of a KIZ company for the tax year in which the KIZ Tax Credit was issued. A KIZ company may claim a tax credit equal to 50 percent of the increase in that KIZ Company’s gross revenues in the immediately preceding taxable year attributable to activities in the KIZ, over the KIZ Company’s gross revenues in the second preceding taxable year attributable to its activities in the KIZ. The KIZ Tax Credit is limited to $100,000 annually per KIZ company. Applications must be submitted on or before September 15 of each year.
RHODE ISLAND

The Jobs Growth Act allows eligible businesses in any industry to offer their employees an exclusion of 50 percent of performance-based compensation from their Rhode Island gross income. In return, the company pays a 5 percent tax each year on the performance-based income paid that year. In order to qualify, a company must hire 100 new employees in the state and add at least $10 million to its state payroll. Those new workers must earn at least 125 percent o the state’s annual average compensation. Employees must be hired or relocated after June 1, 2005 and cannot have been previously employed by the company. The tax cut applies only to bonus or incentive income, not base salary.

A 22.5 percent RESEARCH & DEVELOPMENT TAX CREDIT is allowed for increases in qualified research expenses—the highest rate in America. If the increase above base period expenditures exceeds $111,111, the credit equals 16.9 percent of the excess. The credit is available against a corporations business tax. Unused credit may be carried forward for up to seven years. A taxpayer is allowed 10 percent tax credit for expenditures paid or incurred during the taxable year for the construction, reconstruction, erection, or acquisition of any property that is used or to be used for the purpose of research and development in the experimental or laboratory sense. The property must be depreciable and have a useful life of three years or more. The credit is available against a corporations business tax. Unused credit may be carried forward for up to seven years.

The job training tax credit grants a credit against the corporate income tax (or the insurance premium tax in the case of insurance companies) equal to 50 percent of the actual training spending, whether for new or existing employees, by companies in accordance with an approved training plan. Plans must be filed with the Rhode Island Human Resources Investment Council for approval prior to the training. The credit allowed is capped at $5,000 for each employee in any three-year period.

Job training grants: Rhode Island offers a unique Human Resources Investment Council training program for business and industry funded through a job development assessment of 0.15 percent on the firm’s taxable payroll to $18,200 per employee. This pool of money is available for industry to create customized training programs tailored specifically for a company and free from restrictions imposed by federally funded programs.

Created in 2010, the Job Creation Guaranty Program authorizes the RIEDC to support critical economic development projects by helping innovative small businesses gain access to private growth capital and credit. The program helps companies with primarily “soft” assets like patents, intellectual properties and licenses expand and create jobs in Rhode Island. Under the program, the RIEDC may provide credit enhancement on bonds or loans privately placed with capital providers and banks. The net proceeds of the bonds would provide the necessary financing to capitalize a company’s growth and expansion in Rhode Island. The state would use its “moral obligation” authority to guarantee debt service payments to the bondholders or lenders.

Industrial Revenue Bonds may be used to finance qualified commercial and industrial projects. The bonds offer a competitive interest rate and state sales tax exemption on building materials, which may be significant for projects involving new construction. Financing is available through the Rhode Island Industrial Facilities Corporation and covers the entire project cost. The project and the credit of the user provide the security for the bonds, which may be issued on the financial strength of the user when the user is appropriately rated. The bonds may also be issued with an enhancement letter of credit from a financial institution.

Tax-exempt “small issue bonds”: interest on certain bonds with face amounts of less than $10 million is excluded from income if at least 95 percent of the bonds proceeds is used to finance manufacturing facilities. Industrial revenue bonds are tax-exempt obligations of the issuer, the interest on which is exempt from federal and state income tax. The interest rate on such obligations is normally below that available for conventional mortgages.

The Small Business Loan Fund (SBLF) provides partial funding for expansion projects that will benefit Rhode Island’s economy by encouraging business development. The program makes loans available with attractive terms for nonspeculative ventures involving the following types of capital investment: acquiring land; purchasing machinery or equipment; constructing new buildings and facilities; providing working capital.
SOUTH CAROLINA

The JOB TAX CREDIT is a statutory incentive offered to companies, both existing and new, that create new jobs in South Carolina. The credit is available to companies that establish or expand manufacturing, distribution, processing, warehousing, research and development, corporate office, tourism and technology intensive facilities. Agribusiness operations are eligible effective January 1, 2011. In certain limited instances, service and retail facilities may also be eligible. The company must create a monthly average of 10 net new full-time jobs at the facility in a single taxable year. If a company has fewer than 99 employees worldwide, it may be eligible for a job tax credit if it creates a monthly average of two or more net new full-time jobs in a single taxable year. In most instances, companies can expect to receive from $1,500 to $8,000 per job depending on the development tier of the county. Credits can be used to offset up to 50 percent of South Carolina income tax in a single year, and unused credits may be carried forward for 15 years.

SINGLE FACTOR SALES APPORTIONMENT: Companies whose primary business in the state is manufacturing, distribution, or selling or dealing in tangible personal property will apportion its income by multiplying the net income remaining after allocation by a fraction consisting of a company’s sales made in South Carolina divided by its total number of sales. This new formula eliminates property and payroll from the equation and is advantageous for a company whose majority of sales occurs outside South Carolina. The new method is being phased in over a five-year period with a 20 percent reduction each year of income attributable to South Carolina which began in 2007. In 2011, the new formula will be fully applicable.

SALES TAX EXEMPTION: South Carolina offers a number of sales tax exemptions for manufacturers including manufacturing production machinery and applicable repair parts; manufacturing materials that become an integral part of the finished product; industrial electricity and other fuels used in manufacturing tangible personal property; research and development equipment; manufacturers’ air, water and noise pollution control equipment; material handling equipment for manufacturing or distribution projects investing $35 million or more; packaging materials; long distance telecommunication services, including 800 services; and parts and supplies used to repair or condition aircraft owned or leased by the federal government or commercial air carriers. An exemption for construction materials used in manufacturing or distribution facilities, investing at least $100 million over 18 months, is being phased in and will be fully implemented July 1, 2011.

PRE-JOB TRAINING PROGRAM: The readysc™ program, offered through the S.C. Technical College System, provides pre-job training at little or no cost for eligible new or expanding companies with curricula tailored to meet a company’s workforce requirements. The comprehensive program includes recruiting, screening, testing, developing customized instruction material along with coordinating and upfitting training space.
SOUTH DAKOTA

The ETHANOL INCENTIVE BILL (SB196) passed during the 2011 legislative session. Through a partnership with the ethanol industry, this legislation repurposes funding to secure additional capital for the Revolving Economic Development Initiative (REDI) Fund. The REDI Fund is one of South Dakota’s primary economic development financing tools. In addition, through an incentive program created by SB196, $3.5 million in funding will be provided to encourage additional ethanol consumption and blender pump installation.

AGRICULTURAL PROCESSING AND EXPORT (APEX): In 2011, the legislature reduced the interest rate on the APEX loan program to 3percent.

MICROLOAN EXPRESS PROGRAM: The GOED recently introduced the MicroLOAN express program which streamlines the MicroLOAN application and approval process.
TENNESSEE

Through the FAST TRACK INFRASTRUCTURE DEVELOPMENT PROGRAM (FIDP), funds are allocated to assist local governments in providing infrastructure to support new or expanding industry. The following types of activities are eligible: water systems, wastewater systems, transportation projects, site improvement, or other specific infrastructure improvements required to support economic growth. Grants are limited to a maximum of $750,000 with amounts determined for individual projects.

The TENNESSEE SMALL BUSINESS ENERGY LOAN PROGRAM is designed to assist in the identification, installation, and incorporation of approved energy-efficiency measures for existing Tennessee businesses. Businesses of fewer than 300 employees or $3.5 million in annual gross sales or receipts can receive loans of up to $300,000. These loans are repaid at 3 percent interest over a period of time not to exceed seven years.

The FASTTRACK JOB TRAINING ASSISTANCE PROGRAM (FJTAP) provides training assistance as an incentive to attract new investment and to encourage existing business and industry to make additional investments in Tennessee. The training assistance is customized to each company’s individual training needs. Levels of training assistance are determined by the amount of the company’s investment, number of new hires, and the skills and knowledge that must be possessed by the prospective or newly hired employees. A customized training plan can be developed in direct coordination with company personnel. The training can be both pre-employment and post employment, including classroom and on the job. Reimbursement of instructional cost by company personnel and selected vendors is eligible for support. The expense of travel, for the purpose of training, is a viable option for the training of new hires and persons who will serve as company instructors.

TENNESSEE JOB SKILLS (TJS) is a work force development program giving priority to the creation and retention of existing jobs while focusing on employers in industries that promote high-skill, high-wage jobs in high technology, demand and emerging occupations. Training grants can be awarded to employers as an incentive for investing in new technologies, with the training being focused on the performance skills of their present employees affected by the introduction of the new technology. Training assistance can also be awarded to employers who certify that a specific job or job openings exist and at the completion of the training project those participants in the project will fill such job openings. The starting wage for a new job created through the project will be equal to or greater than the prevailing starting wage for that occupation in the local labor market.
TEXAS

THE TEXAS EMERGING TECHNOLOGY FUND (ETF) provides Texas with an unparalleled advantage in the research, development, and commercialization of emerging technologies. ETF grants are awarded in the following three areas:

* Commercialization Awards: funds to help companies take ideas from concept to development to ready for the marketplace.
* Matching Awards: funds create public-private partnerships which leverage the unique strengths of universities, federal government grant programs, and industry.
* Research Superiority Acquisition: funds for Texas higher education institutions to recruit the best research talent in the world.

The Emerging Technology Fund (ETF) was created by the Texas Legislature in 2005 at the urging of Gov. Perry to provide Texas with an unparalleled advantage in the research, development, and commercialization of emerging technologies. ETF grants are awarded in the following three areas:

* Commercialization Awards: funds to help companies take ideas from concept to development to ready for the marketplace.
* Matching Awards: funds create public-private partnerships which leverage the unique strengths of universities, federal government grant programs, and industry.
* Research Superiority Acquisition: funds for Texas higher education institutions to recruit the best research talent in the world.

THE TEXAS ENTERPRISE ZONE PROGRAM is an economic development tool for local communities to partner with the State of Texas to promote job creation and capital investment in economically distressed areas of the state. Designated projects are eligible to apply for state sales and use tax refunds on qualified expenditures. The level and amount of refund is related to the capital investment and jobs created at the qualified business site. For more information, visit www.governor.state.tx.us/ecodev/financial_resources/tax_incentives/

THE DEFENSE ECONOMIC READJUSTMENT ZONE PROGRAM (DERZ) was established as a tool for business recruitment and job creation in adversely impacted defense dependent communities. It is designed to provide assistance to Texas communities, businesses and workers impacted by, or vulnerable to, the closure or realignment of military installations and the reduction of federal defense contracting expenditures. Local communities may also offer benefits to participants under the defense economic readjustment zone program as well. These may include tax abatement, tax increment financing, one-stop permitting and others. For more information, visit: www.governor.state.tx.us/ecodev/financial_resources/tax_incentives/

THE FEDERAL ENTERPRISE ZONE/RENEWAL COMMUNITY PROGRAMS are Federal interagency efforts focused on the creation of self-sustaining, long-term development in distressed urban and rural areas throughout the Nation. The program uses a combination of Federal tax incentives to assist participating communities in development, reinvigoration, and growth. These Federal Designations are recognized through December 31, 2009. For more information, visit: www.governor.state.tx.us/ecodev/financial_resources/tax_incentives/
UTAH

ECONOMIC DEVELOPMENT TAX INCREMENT FINANCING (EDTIF): A post-performance refundable tax credit up to 30 percent of new state revenues (state corporate/partnership income, sales and withholding taxes) over the life of the project (up to 20 years).

RENEWABLE ENERGY DEVELOPMENT INCENTIVE (REDI): A post-performance refundable tax credit for up to 100 percent of new state revenues (state corporate/partnership income, sales and withholding taxes) over the life of the project (up to 20 years) for renewable/alternative energy generation and related manufacturing.

The Private Activity Bond is Utah’s tax-exempt bonding authority creating a lower cost, long-term source of capital.

UTAH RECYCLING MARKET DEVELOPMENT ZONES: Businesses within a Recycling Zone can claim state income tax credits of 5 percent on the investment in eligible equipment for the handling and/or consumption of recycled materials.

LIFE SCIENCE AND TECHNOLOGY TAX CREDITS: Investors in a Utah life science company are eligible for a non-refundable capital gains tax credit of 5 percent of a capital gain after holding the investment for at least two years. Investors are eligible for a non-refundable, post-performance tax credit of up to 35 percent of their investment, paid over three years. Life science and technology companies generating new state revenues are eligible for a post-performance refundable tax credit of up to the amount of new state revenues generated over three years.

MOTION PICTURE INCENTIVE PROGRAM (MPIP): A post performance incentive of up to 25 percent of total dollars spent in the state in the form of a cash grant or refundable tax credit.
VERMONT

The VERMONT EMPLOYMENT GROWTH INCENTIVE ((VEGI) program can provide a cash payment, based on new job and payroll creation, to companies that have been authorized to earn the incentive. The incentive amount is based on the economic and fiscal impact of qualifying new jobs and payroll and capital investments made by the applicant for a period of up to five years. The resulting net revenue impact is used to calculate a percentage, which is then applied against the qualifying new payroll of the net new qualifying jobs, the product of which is the incentive amount for that year.

The VERMONT TRAINING PROGRAM (VTP) promotes expansion and encourages the creation and retention of jobs in Manufacturing, Information Technology, Healthcare, Telecommunication and Environmental Engineering by providing training funds for new and existing businesses thereby increasing the skills of the Vermont workforce, the wages and Vermonters’ standard of living. To be eligible, the company must guarantee that the training requested will supplement, rather than replace, the company’s ongoing, normal training efforts and agree to pay wages equal to at least twice minimum wage ($16.30) at completion of training, if no benefits are provided to the employee.

The DIRECT LOAN PROGRAM is eligible to manufacturing, processing, warehousing, research and development, travel and tourism, information technology, and others as defined in statute. Money can be used for the purchase of land, construction of buildings, purchase and installation of machinery and equipment.

Tax-Exempt Revenue Bonds: Eligible to facilities deemed eligible by the IRS (primarily manufacturers) as 501(c)3 organizations. Bonds can be used for acquisition of land, buildings, and equipment or “exempt facilities” as defined in the federal tax code.

VERMONT JOB START PROGRAM: Applicants must meet income eligibility criteria. Funds may be used to purchase real estate, equipment, inventory or for working capital.

Local Development Corporation Loans: This program provides financing to nonprofit local and regional development corporations to build facilities for lease to identified eligible tenants, or to plan and/or develop industrial parks. All nonprofit local and regional development corporations (LDCs and RDCs) are eligible for the program. Funding can be used for the purchase of land for industrial parks; industrial park planning and development; construction or improvement of speculative buildings; and small business incubator facilities.
VIRGINIA

The GOVERNOR’S OPPORTUNITY FUND (GOF) is designed as a “deal closing” fund to be employed at the governor’s discretion when necessary to secure a company location or expansion in Virginia. The GOF serves as a final resource for Virginia in the face of serious competition from other states or countries. Awards are made with the expectation that the grant to a locality will result in a favorable decision for the commonwealth. Grants are awarded to localities on a local matching basis. Capital is provided for site acquisition and development, transportation access, training, construction or build-out of publicly owned buildings.

VIRGINIA INVESTMENT PARTNERSHIP GRANT AND MAJOR ELIGIBLE EMPLOYER GRANT FUND: A discretionary performance incentive designed to encourage continued capital investment by Virginia companies, resulting in added capacity, modernization, increased productivity, or the creation, development and utilization of advanced technology. The program is targeted to companies that have operated in Virginia for at least five years, and that are proposing expansion projects that meet certain criteria.

VIRGINIA ECONOMIC DEVELOPMENT INCENTIVE GRANT: A discretionary investment performance grant program designed to assist and encourage companies to invest and create new employment opportunities by locating significant headquarters, administrative or service sector operation in Virginia. Eligible projects must meet minimum requirements for capital investment and job creation.

The VIRGINIA JOBS INVESTMENT PROGRAM: (VJIP) offers customized recruiting and training to companies that are creating new jobs or are substantially retraining existing employees. VJIP offers funding and services through three distinct incentive programs that fit a spectrum of training and retraining needs that include the New Jobs Program, the Small Business New Jobs Program and the Retraining Program.

TOBACCO REGION OPPORTUNITY FUND: discretionary cash grant made to a locality in Virginia’s tobacco-producing regions by the Tobacco Indemnification and Community Revitalization Commission (generally in the southern and southwest regions of the state) for assistance with economic development projects.

TECHNOLOGY ZONES: Virginia cities, counties and towns have the ability to establish, by ordinance, one or more technology zones to attract growth in targeted industries. Qualified businesses locating or expanding operations in a zone may receive local permit and user fee waivers, local tax incentives, special zoning treatment or exemption from ordinances. Once a local technology zone has been established, incentives may be provided for up to 10 years. Each locality designs and administers its own program.

SALES AND USE TAX EXEMPTION: Data centers are eligible for sales and use tax exemption if they invest at least $150 million, hire at least 50 employees (direct or indirect) that are paid at least 1.5 times the average prevailing wage in the locality where the center is located, and enter into an MOU with the Virginia Economic Development Partnership. The job threshold may be reduced if the facility is located in an Enterprise Zone or in a severely distressed community as defined by the Virginia Economic Development Partnership (unemployment at least 150 percent of the average statewide unemployment.) This exemption applies to the 5 percent sales tax on servers, server related equipment, chillers, generators and other enabling hardware.
WASHINGTON

COMMUNITY EMPOWERMENT ZONE PROGRAM(CEZ): a competitive program intended to spur neighborhood revitalization and reinvestment. To receive state CEZ designation, the six eligible jurisdictions identified targeted neighborhoods, undertook a planning and public involvement process, and adopted a five-year plan to guide resource investments. The CEZ designation enables qualified businesses to apply to the Washington State Department of Revenue for sales tax deferrals and business and occupation tax credits for a variety of projects. The statutory authority for the CEZ program is found in Chapter 43.31C of the Revised Code of Washington (RCW).

SALES AND USE TAX EXEMPTION for Manufacturing Machinery & Equipment (m&E): Available to manufacturers and processors for hire performing manufacturing and R&D. Testing operation for a manufacturer and processor for hire. To qualify, the manufacturer must purchase qualifying machinery and equipment used directly in a manufacturing operation or research and development performed by a manufacturer, or testing operations performed for a manufacturer.

Rural County/Community Empowerment Zone (CEZ) Incentives:

* Purchases of Server Equipment and Power Infrastructure for use in Eligible Data Centers – Sales/Use Tax Exemption: Available to the owner of an eligible data center with a combined square footage of at least 100,000 square feet and lessees of at least 20,000 square feet within an eligible data center located in a rural county.
* B&O Credit for New Employees in Manufacturing and Research & Development in Rural Counties: Available to manufacturers, R&D laboratories, and commercial testing facilities located in rural counties or within a CEZ. To qualify, the company must create new employment positions/increase instate employment by 15 percent. In turn, this incentive gives a $2,000 credit/position with annual wages/benefits of $40,000 or less; or a $4,000 credit/position with wages/benefits of more than $40,000 annually.

HIGH TECHNOLOGY B&O CREDIT for R&D Spending: Available to:

Businesses conducting research and development (R&D) in Washington State in the research and development fields of advanced computing, advanced materials, biotechnology, electronic device technology and environmental technology.

RENEWABLE ENERGY/GREEN INCENTIVES:

* Solar Energy System and Components of Solar Energy Systems Manufacturers – Reduced B&O Tax Rate available to manufacturers, manufacturers that sell their product at wholesale, and processors for hire of solar energy systems and specified components of solar energy systems using photovoltaic modules or stirling converters.
* Machinery & Equipment Used to Generate Electricity Using Renewable Energy – Sales/Use Tax Exemption available to anyone that generates electricity using fuel cells, sun, wind, biomass energy, tidal and wave energy, geothermal resources, anaerobic digestion, technology that converts otherwise lost energy from exhaust, or landfill gas. The refund program expires July 1, 2013.
* Energy Production Using Solar, Methane, & Wind Power – Cost Recovery Program available to individuals, businesses, local government entities that are not in the light and power business or gas distribution business, and participants in a community solar project.

Reduced B&O Tax Rate for Aerospace Businesses: This incentive is available to manufacturers and processors for hire of commercial airplanes or component parts of commercial airplanes, non-manufacturers engaged in the business of aerospace product development, certificated FAR repair stations making retail sales, and aerospace tooling manufacturers.

For more detailed information about these and additional incentives, visit: www.choosewashington.com/business/incentives
WEST VIRGINIA

SALES TAX EXEMPTION for Certain E-Commerce Businesses: Some computer-related sales of tangible personal property and services are exempt from the consumer sales and services tax.

Sales Tax Exemption for Certain Warehouse and Distribution Centers: Purchases of certain tangible personal property in qualified warehouse and distribution centers may be exempt from the consumers’ sales and service tax.

The Commercial Patent Incentives Tax Credit can offset up to 100 percent of the business franchise tax, corporation net income tax, or in the case of individual taxpayers, the personal income tax. The credit is based on a percentage of royalties, license fees and other consideration for developers of a patent or a percentage of net profit attributable to a patent used in a manufacturing process or product.

HIGH-TECH MANUFACTURING CREDIT: Businesses that manufacture certain computers and peripheral equipment, electronic components or semi-conductors and which create at least 20 new jobs within one year after placement of qualified investment into service, can receive a tax credit to offset 100 percent of the business and occupation tax, business franchise tax, corporate net income tax, and personal income tax on certain pass through income for 20 consecutive years.

HIGH-TECHNOLOGY BUSINESS PROPERTY VALUATION ACT: Tangible personal property, including servers, directly used in a high-technology business or in an internet advertising business is valued for property tax purposes at 5 percent of the original cost of the property. In addition, sales tax is eliminated from all purchases of prewritten computer software, computers, computer hardware, servers, building materials and tangible personal property, for direct use in a high-technology business or internet advertising business.
WISCONSIN

DAIRY 2020 INITIATIVE: Includes two programs to help dairy producers make improvements and increase production.

* The Dairy 2020 Early Planning Grant (EPG) program helps encourage and stimulate the start up, modernization and expansion of Wisconsin dairy farms. It provides grants to dairy producers to pay for professional services such as the preparation of a business plan. The award can be for up to 75 percent of the professional services with a maximum grant of $3,000.
* The Milk Volume Production program allows dairy producers who plan to increase milk production by expanding their dairy herds to obtain equity gap financing.

FOCUS ON ENERGY: Offers financial incentives to eligible Wisconsin business for installing qualifying energy efficiency and renewable energy measures such as energy efficient lighting, compressed air, HVAC equipment and residential solar energy systems. It also includes custom projects such as system or building upgrades or process improvements. Focus information, resources and financial incentives help implement projects that otherwise would not be completed, or to complete projects sooner than scheduled. Its efforts help businesses manage rising energy costs, promote in-state economic development, protect the environment and control the state’s growing demand for electricity and natural gas.

COMMUNITY DEVELOPMENT BLOCK GRANT FOR ECONOMIC DEVELOPMENT REVOLVING LOAN FUND (CDBG-ED/RLF): Funded through the federal Small Cities CDBG Program, provides grants to communities to promote local job creation and retention. Local governments then lend the funds to businesses for start-up, retention and expansion projects through grant funding. Funding levels depend on the number of jobs to be created or retained.

BUSINESS EMPLOYEES’ PROGRAM (BEST): Established by the Wisconsin Legislature to help small businesses in industries that are facing severe labor shortages upgrade the skills of their workforce. Under the BEST program, Commerce can provide applicants with a tuition reimbursement grant to help cover a portion of the costs associated with training employees. Eligible applicants include for-profit businesses that have 25 or fewer full time employees or annual sales of less than $2.5 million and are in one of the following Industrial Clusters: Automation, Agriculture/Food Products, Biotechnology, Information Technology, Manufacturing, Medical Devices, Paper/Forest Products, Printing, Tourism, or Childcare (does not include in-home childcare).
WYOMING

The BUSINESS READY COMMUNITY GRANT & LOAN PROGRAM can provide financing for publicly owned infrastructure that promotes economic development within Wyoming communities. Cities, towns, counties and joint powers boards are the primary applicants for the program. The typical maximum award is $1.5 million with a 10 percent match. Publicly owned infrastructure that facilitates a specific businesses needs.

INDUSTRIAL DEVELOPMENT REVENUE BONDS: Cities and counties may issue tax-exempt industrial development revenue bonds to provide financing for manufacturing and energy generation businesses. These bonds are issued within the State’s IRS allocation of tax-exempt bond financing. The maximum project was increased to $600,000,000 in 2011 and the business must provide a bank “letter of credit” to guarantee payment of the bonds. Interested businesses must apply for an allocation within the State’s volume cap. The Wyoming Business Council will coordinate this process.

WYOMING PARTNERSHIP CHALLENGE LOAN PROGRAM: The Wyoming Business Council can participate with a local lender on a loan to a business. The State’s portion of the participation maybe up to 35 percent of the project (maximum $500,000) in a shared note and collateral position with the local lender. Participation can be increased to 50 percent of the loan or $1,000,000 is the lender has secured a federal guarantee (i.e. SBA, USDA) to guarantee repayment of a loan made to a business.

The MANAGED DATA CENTER COST REDUCTION GRANT PROGRAM (Passed 2009) is a $2.25 million maximum grant that can be used to reimburse accrued utility expenses for power or broadband over 3 years. In exchange for providing these reductions in costs, the applicant (a Wyoming city, county, joint powers board) shall contract with the business to receive direct benefits and indirect economic development benefits including a specific amount of capital investment from business, specific minimum payroll created by the business, the provision of discounted IT services.

DATA CENTER SALES TAX EXEMPTION (originally passed in 2010, amended 2011): Requires a $5 million investment in capital infrastructure (building, walls, engineering, dirt work, etc) in a Wyoming location in addition to a $2 Million or larger investment in data center equipment (servers, peripheral equipment and data center containers) and software purchases. If these thresholds are met the sales tax burden on the qualifying computer equipment is exempt. This exemption can be applied if the data center invests $2M in equipment a calendar year in the future. In 2011, the Wyoming State Legislature added another tier requiring a $50 million capital infrastructure level. This tier also requires the $2 Million in data center equipment purchases. At this tier the qualifying exempt equipment also includes uninterruptable power supplies (UPS), back-up power generation, specialized heating and air conditioning equipment and air quality control equipment.

DATA CENTER PERMIT EXEMPTION (passed 2011): A mega-data center project, which exceeds $178.3 Million in capital investment, would be exempt from the requirement of applying for an Industrial Siting Permit through the Wyoming Department of Environmental Quality. This presents a cost savings of approximately $500,000 associated with permit application preparation, wildlife studies, economic analyses, public meetings, permit hearings, attorney fees, etc.

DATA CENTER INFRASTRUCTURE GRANT FUNDS (passed 2011): A $15,000,000 appropriation to assist Wyoming cities, towns and counties to build necessary public infrastructure for the recruitment and operation of data centers.

by Julie Hinds in Detroit Free Press

2011-11-04T05:07:00.000-07:00

The Michigan Senate approved a bill Thursday that would provide guidelines for restarting the approval process for the state's film incentive program.

The vote was 34-4 to pass the bill, sponsored by Senate Majority Leader Randy Richardville (R, Monroe). It now moves to the House for a vote.

Last month, the Michigan Film Office said it would not accept any applications for the film incentives until it received guidelines from the legislature for implementing the revamped program. Among the guidelines in the Senate-approved version: A minimum in-state spending of $100,000 would be required to qualify for the incentives.

Under the fiscal 2012 budget, the film incentives have changed from a tax-credit program to one involving direct grants. Originally, there was no annual limit on the film incentives. The 2012 budget has a $25-million cap.

Richardville told a meeting of the local film community last month that he expects the bill to be on Gov. Rick Snyder's desk by the end of the year.

Good One, Dear Dave

2011-10-26T17:41:00.000-07:00

David Thrasher, mild-mannered and content to stand in the shadows while others bask in glory. But this modest and very generous man has had a flame of discontent burning under him and this flame has thrown him off his chair and with his wonderful writing ability he has penned a very important and revealing letter which I hope all of you out there have read and appreciated.

Thanks, Dave. Good one!!!! Thrasher. David Thrasher.

gino

Question Time

2011-10-26T08:41:00.000-07:00

Pointed questions about the situation surrounding the Iowa film tax credit scandal

The Tom Wheeler trial as well as the other trials that have taken place due to the Film Tax Credit scandal have answered a lot of questions but not all, and have raised many more. There are many pointed questions I can think of that I would like to ask the various people who had a part in creating the problem. (Asking these questions with the aid of a pointed stick would be especially satisfying.)

To Michael Blouin, the first head of the Iowa Department of Economic Development (IDED) that Tom Wheeler served under (during the Vilsack administration) I would like to ask this:

Why did you hire Tom Wheeler in the first place while ignoring the 40 or so other applications for the job of Iowa Film Office manager? You didn't renew the contract of previous Film Office manager, Steve Schott, and instead appointed Tom Wheeler without any review of the many applications. Why?

While there may have been applications in the pile of people that were just as qualified as Wheeler, there likely were people with better experience, yet you skipped over these people. Tom Wheeler's experience in the film business consisted of working as a Production Assistant at Fox Animation in the Editorial Department. Did you even bother to find out what this job entailed?

A Production Assistant (PA) is the lowest rung on the ladder. These are the people who get the coffee and do the filing. Tom Wheeler never was on a motion picture or television set, never worked on locations, never dealt with film budgets, and never did many of the things that he would later be asked questions relating to when he went to work for you. He was having trouble with the job long before the film tax credits entered into things or before you moved on to another position elsewhere.

So, tell me again why you hired him? Was he someone's well-connected relative? Did one of your bosses tell you to hire him and to pay no attention to all the other applicants?

I really want to know. Please tell me.

To the members of the Iowa Legislature:

My question to you is not why did you pass the film tax credit bill? With the competition from other states for film projects and the dollars they brought, passing this bill made perfect sense. No, my question - questions, actually - to you are these: Why did you write a law that concerned taxpayer dollars with such vague language? Why did you not include funding or qualified staffing to adequately administer such a program? And finally, why are you now pretending that you had nothing to do with it?

Both major political parties in both houses passed it with a majority voting for it. Now, rather than showing any true leadership and fixing its flaws, you prefer to pretend that it doesn't exist and hope that it will simply go away.

To Michael Tramontina, the second director of the Iowa Department of Economic Development that Tom Wheeler served under:

Just where were you during this big mess? Sleeping at your desk? Were you really so clueless as to think the Film Office was just some fun little tourism thing and that the film tax credits were just some vague abstract thing that the legislature had talked about once? And why did you panic and resign once the issue of luxury cars came up? (Note to self: If ever visiting Beverly Hills with Mike Tramontina, don't go anywhere near a Rolls-Royce dealership. It could give him a heart attack!)

If Tom Wheeler was unable to handle the film tax credits himself, why did you let him? Why didn't you provide staffing for him? And if you didn't think he was the man for the job, why didn't you replace him? You know, division heads have that power. Why didn't you use it?

To Tom Wheeler, the now former manager of the Iowa Film Office:

While I know you suffered greatly through the ordeal of being fired from your job and through the time of your trial (they don't call them "trials" for nothing!), to say nothing of your time at the Iowa Film Office, there are still questions that need to be asked.

Why did you not seek more help from the film community during your term as manager when it became apparent that you were in over your head? I am not just asking about the time when the film tax credits became part of the job. I'm talking about your whole term as manager. Why did you mostly rely mostly upon the internet for information when you could have called people in the know directly who could have given you much more informed answers? There is a lot of information on the internet, true, but it is by no means complete nor necessarily accurate. Was it a puffed up sense of pride from having your first well paying job and a "I can do it all myself" attitude that made you approach your job this way?

And when the film tax credits came into being and your higher ups not only refused you the money and the proper staffing to administer it - in fact cut your Film Office budget - why didn't you just quit? It certainly would have appeared the honorable thing to do and in truth would have been. You could have possibly used your Film Office credentials to find another job in the film industry. Why did you try to be a hero when you were so obviously unprepared and unarmed for the situation?

To Tom Miller, Iowa Attorney General:

Why didn't you provide any legal assistance to the Iowa Film Office during the time of the film tax credits? Were you somehow expecting Tom Wheeler to know all about this subject or about the law in general? Why did you allow your office to be used as a tool to make Tom Wheeler a scapegoat and deflect attention from the other responsible parties who should have known better? Why did you make it your job to protect the powerful in state government at the expense of Iowa taxpayers?

To Chet Culver, former governor of Iowa:

Did you pay any attention at all to what was happening in the various departments under your care, or were you too busy keeping up with the doings of the Green Bay Packers? Why did you decide to make no effort at all to fix the film tax credit program problems once you awoke from your slumber? To use words you might understand, why did you forfeit the game when it was still only at the beginning of the first quarter after noticing that the score was not in your favor?

You could have frozen the film tax credit program for only a limited period of time - time enough to regroup, fire whoever needed to be fired, hire whoever needed to be hired, do whatever triage necessary to get things moving again, and then work with all the parties involved to fix the problems for good. You can walk and chew gum at the time, can't you? (Don't answer that!)

Instead, you froze everything for essentially forever with no attention given whatsoever to the possible consequences of your actions. Then you had the nerve to try to use it as an issue for your re-election campaign with your tough guy declaration about Iowans not being made into suckers.

Are you surprised you lost the election? I'm not.

To the great silent majority of the Iowa film community:

I'm talking about those who simply sat back while this whole thing was going on without raising a finger to fight back for a chance for a satisfying way to make a living. Why didn't you do anything? What was so important that you couldn't even take 5 minutes to write a legislator or send a "letter to the editor" expressing your thoughts? There were plenty of you around when times were good. You were lining up at the craft service tables, grabbing the pay checks, the glamor of the visiting celebrities, and enjoying the camaraderie of the set. But when all of this was threatened you decided to hang back and let others do the leg work. Why?

The few who did try to do something and did speak up need more than the occasional "Atta boy!" from you. The need more than a "thank you". They need more than an apology from all above. They need their lives and opportunities restored. Who is going to do it for them?

To all of those I've referred to above and to all of those reading this article:

The problem with the film tax credit scandal is that it just didn't affect the Iowa Film Office, it didn't just affect the well being of the Iowa Department of Economic Development, and its effects did not stop at the Culver administration. It affected the whole state of Iowa and in its wake took down several other Film Offices and film incentive programs in other states. It put a black eye on Iowa in the eyes of the rest of not only the country but of the world and not just in the film community.

Film producers no longer trust the State of Iowa for anything. Who can blame them?
In the film community what happened as a result of the film tax credit scandal was the equivalent of the dropping of an atomic bomb. Iowa may as well contain deadly radiation as far as they are concerned. Nobody wants to film in Iowa any longer, at least professionally anyway. The fallout is going to last years, if not decades to come.

Like Being In The Talapoosa Georgia Jail Again

2011-10-21T07:46:00.000-07:00

Thank you to those who have written to Governor Branstad regarding the Iowa Film Office being revived. I had hoped many more of you in the Iowa Film Family would've written though. I feel like I did when in the late sixties I was on a Georgia highway hitchhiking in the black of night, alone and broke and not a car in sight. I did eventually get a ride , but in an old car driven by drunk hillbillies. I got tossed in the Talapoosa jail overnight for being with them. So, that's how I feel, a bit concerned but still hopeful.

Write to Iowa's Governor Branstad, Please!

2011-10-19T16:54:00.000-07:00

I asked my dear friend Dave Thrasher to help me draft a letter which we in the Iowa film family could send to our governor. Now all you have to do is copy and paste it and send it to the governor using the below email address. The governor has NOT heard from many at all, in fact, very few, so by you sending a letter he will feel our presence and realize our needs. DO IT!!! thanks.. gino send to: (email: governor.contact@Iowa.gov)

Dear Governor Branstad,

For over two years we in Iowa's film community have gone without being able to employ our skills and talents once utilized in feature films shot in Iowa. We had nothing to do with the film program wrongdoings, yet our “Field of Dreams” has become a “Field of Nightmares”. Many of our film colleagues were forced to move out of the state in order to pursue film-making careers, but many of us remain in Iowa hoping and waiting for things to get better and for the Iowa Film Office to re-open.
For us, film and television production here represented both financial opportunity and the chance to continue to live with our friends and family in Iowa without needing to move and thus increase the talent base and tax base in other states.
Re-establishing the Iowa Film Office and encouraging film productions to shoot in Iowa will help you fulfill your pledge of creating more jobs for Iowans.
We very much appreciate your efforts in your previous administrations with your original creation of the Iowa Film Office and we urge you now to re-establish it , with sufficient staffing and sufficient funding. It is a crucial first step in reviving film activity in the state, activity that will lead to contributions to the economy of our state.This is a way of bringing money from outside our state and will benefit not only those who get film jobs but, too, those in the hotel, transportation, food, and other industries within our state.
I ask that you please put this important creative and economic matter on your fast track, Governor Branstad.
Signed,
(Your Name)

My Festering Wound

2011-10-16T07:52:00.001-07:00

Does the following bother YOU? I just can't let go of it....:

Debi Durham, director of the reconfigured Iowa Economic Development Authority, said she would like to see the state “get rid” of the film tax credit program that has been suspended until 2013 due to a scandal that shut down the effort two years ago and resulted in criminal convictions over alleged abuses and mismanagement of financial incentives aimed at attracting movie, television and video projects to Iowa.
“That’s not a business we should be in, and the reason we shouldn’t be in it is because it isn’t creating the value we need from a high-quality job, high-quality investment,” Durham said. “I don’t think we need to be incentivizing it.”

From EarternIowaGovernment.Com, Rod Boshart writer

2011-10-07T18:16:00.000-07:00

Durham: Get rid of state film tax credits
October 6, 2011, 2:23 pm
By Rod Boshart/SourceMedia Group News

Gazette Des Moines Bureau
DES MOINES – Iowa’s economic development chief said Thursday the state should not be in the business of providing financial incentives to lure film projects.
Debi Durham, director of the reconfigured Iowa Economic Development Authority, said she would like to see the state “get rid” of the film tax credit program that has been suspended until 2013 due to a scandal that shut down the effort two years ago and resulted in criminal convictions over alleged abuses and mismanagement of financial incentives aimed at attracting movie, television and video projects to Iowa.
“That’s not a business we should be in, and the reason we shouldn’t be in it is because it isn’t creating the value we need from a high-quality job, high-quality investment,” Durham said. “I don’t think we need to be incentivizing it.”
The Iowa Attorney General’s Office currently is negotiating with the remaining filmmakers who contracted with the state for tax credits to resolve outstanding issues, and Durham said once that process is completed and Iowans assess what was invested and what was gained in return she expects they’re going to say “let’s rethink that.”
Leaders of the Iowa Motion Picture Association and others have been working to revitalize a film industry that suffered a setback with the tax credit program’s collapse. They say they are pushing to reopen the Iowa Film Office and to reformulate a new Iowa incentive program similar to what other states offer to attract film projects.
Durham said she favors reopening the Iowa Film Office but placing it in the state Department of Cultural Affairs and having it operate as a clearinghouse of information where prospective moviemakers could go to get information about possible locations where film shoots could take place or to connect them with businesses in Iowa that specialize in equipment, crews, cast or other pertinent services.
“What we need to do is facilitate the process. We need to make sure we have a directory here that when film companies come in, we can introduce them to companies that can do work. We should be a clearinghouse for that,” she said.
“When you look at some of the biggest films like “Bridges of Madison County” and “Field of Dreams,” I mean we didn’t incentivize those and I don’t think we need to. I think we need to facilitate those and we need to have that information handy.”
Tim Albrecht, Gov. Terry Branstad’s spokesman, said last week that the governor is interested in opening a new Iowa Film Office given the movie-making successes the state enjoyed in the ‘80s and ‘90s and he has had discussions with Wendol Jarvis — who created the office in 1984 and then left in discouragement over staff cuts in 2002 – about reprising his role.
Albrecht said the governor believes filmmaking is good for economic development in Iowa, but it’s not likely film tax credits have a future role in Iowa.

By Mary E. Arata, from Nashoba Publishing, Harvard

2011-10-01T04:36:00.000-07:00

Before cameras roll, a focus on film tax credit

By Mary E. Arata, Marata@nashobapub.com

DEVENS -- MJM Development, LLC, of Andover hopes to build a first-of-its-kind movie and television studio on Devens.

Led by Managing Director Michael J. Meyers (no relation to the former Saturday Night Live and Austin Powers actor), MJM says it will build a $104 million, 600,000-square-foot film and television studio on Jackson Road at Devens.

It's not the first time a sound stage has been contemplated for Devens, according to Devens Enterprise Commission Administrator Peter Lowitt. But this is the first proposal to see the light of day with a named entity and a pinpointed location, which will fall entirely within the historical bounds of Harvard.

The success of the launch rests in part with the Massachusetts film tax credit. It was considered a lynchpin in similar studio deals plotted for South Boston, Plymouth and even the former naval station in Weymouth. No other Massachusetts studio has made it to full theatrical release.

In order to turn the screenplay into reality, MJM Development will bank on its studio tenants -- movie and television producers -- being attracted to the tax credit.

State Department of Revenue spokesman Bob Bliss said the individual productions, and not the studio construction itself, can benefit from the tax relief.

"The production of movies qualifies, but the construction of the studio is not a qualified expense," Bliss said. "Who knows what other tax credits might be applicable here, but the film tax credit is
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not one of them."

The law, in a nutshell

To roll out the red carpet to movie and television producers, former Gov. Mitt Romney signed the state's first film tax credit into law in 2005, and it was to sunset in 2013. Gov. Deval Patrick signed into law amended legislation that extended the sunset date to Jan. 1, 2023.

The goal is to depict Massachusetts in a positive light and spark spinoff jobs, hotel stays, tourism and retail sales.

To qualify, studios, producers and filmmakers must shoot at least half of their movie or spend at least half of their production budget in the state to be eligible for a tax credit of 25 cents for every new dollar of spending they bring to Massachusetts. There's a 100 percent sales-tax exemption on any in-state, production-related item purchased, starting with pre-production and stretching for the ensuing 12 months.

There's also a 25 percent payroll-tax credit applicable to the total payroll of a motion picture subject to Massachusetts personal income-tax withholdings but not for "high salary" stars earning more than $1 million.

The tax credit is credited to the company's personal income or corporate excise-tax liability. At their discretion, filmmakers may opt to receive a guaranteed direct payout of 90 percent of the face value of the tax credit. Otherwise, a filmmaker can sell the tax credit at market rate. Transferred tax credits can be carried forward for five years.

Unlike the former Romney-era, $7 million-per-motion-picture limit, there are no limits or cap on the tax credits possible. As the Massachusetts Film Office website proclaims, "No muss. No fuss."

The credit applies to feature-length films, video or digital media projects (narrated or documentary); TV series (with a season not to exceed 27 episodes); and commercials (a single commercial or series of commercials for one client with production expenses above $50,000 in a consecutive 12-month period).

Obscene productions cannot benefit; nor can fundraising and marketing productions cannot.

News programs are excluded, as are current-events programming, weather and financial market reports, talk shows, game shows, sporting events, awards shows and gala events.

Expenses qualifying for the tax relief include wages and salaries, set construction, operations, photography, lighting, sound, editing, wardrobe, makeup, film processing, transfer, sound mixing, special and visual effects, music, location fees, and the purchase or rental of facilities and equipment.

While the Massachusetts Film Office enthusiastically reports that the film tax credit is a boon to the state's economy, Department of Revenue figures sully that statement. The DOR is required to annually report on the figures. The DOR's report on calendar year 2009 was released in January and resulted in negative press -- particularly a critical Associated Press story, grilling the merits of the tax credit:

* For productions filmed in 2009 that had yet applied for the credits, a total of $82.4 million in film tax credits were generated by 86 individual productions, with commercial and advertising productions accounted for the largest number of tax credits awarded (48). There were also 13 feature films. Combined, they accounted for 93 percent of the total value of tax credits claimed to date for 2009.

* Massachusetts directly paid out $100 million in fiscal year 2010 for tax credits issued in 2009 and issued in prior years but that had not yet been used.

* In calendar 2009, the film tax incentive program generated $10.4 million in new state revenue that could help partially offset the cost of the tax credits.

* Taking into account payments to out of state residents and businesses, as well as state spending cuts required to fund the tax credits, in calendar 2009, the film tax credit program resulted in $32.6 million in new spending in the Massachusetts.

* In 2009, the cost to the state per Massachusetts resident job created was $324,838. The cost spread over all jobs created (in and out of state) was $123,130 per employee. For the period 2006 to 2009, the cost per Massachusetts resident job created was $133,055 and for all jobs created was $70,648.

* Tax credits for calendar year 2009 productions totaled $329.7 million. DOR estimates that $10.7 million were productions that would have proceeded regardless of the tax credits. Of the remaining $319 million in new 2009 spending attributable to the tax incentives; $103.8 million, or one-third, was paid to Massachusetts residents or businesses located in Massachusetts; and $215.2 million, or two-thirds was paid to nonresidents or businesses located outside of Massachusetts.

Taking it all into account, the film tax-credit program resulted in $32.6 million in new spending in the Massachusetts economy in 2009, according to the DOR report of January.

From Wall Street Journal, Eric Felten

2011-09-23T07:42:00.000-07:00

Snooki to Snookered: States' Film Tax Credits Produce Embarrassment

By ERIC FELTEN

New Jersey Gov. Chris Christie is threatening to revoke a $420,000 subsidy his state's Economic Development Authority is giving to MTV's "Jersey Shore" for filming there. Italian-American groups have been complaining, since the tax credits were announced last week, that New Jersey is subsidizing stereotypes. While the Newark, N.J.-based Star-Ledger newspaper acknowledged in an editorial that the reality show features "a bunch of 20-something nitwits," it didn't side with Gov. Christie. Instead, it said that his threat to veto the tax credit made him "the state's Censor-in-Chief."

Associated Press

The cast of MTV's reality show 'Jersey Shore.' Gov. Chris Christie is threatening to revoke the show's $420,000 state subsidy.

That's an accusation leveled every time officials rethink pumping money into dubious entertainments. Michigan, having written a check for a charming film about young cannibals gorging themselves on the flesh of the unsuspecting, last year balked at subsidizing the sequel. "This film is unlikely to promote tourism in Michigan or to present or reflect Michigan in a positive light," the state's film commissioner said. She was derided for prissy parochialism.

Texas governor (and now presidential hopeful) Rick Perry trumpeted his state's partnership with movie director Robert Rodriguez. That is, until he found himself asked to pay for a blood-drenched satire in which a machete-wielding Latino avenger gives the gringos some Tarantinian what-for. Texas decided last December—after "Machete" had already been released—not to hand over the hefty subsidy producers were expecting. "We would consider that censorship," sniffed someone from the film office in neighboring New Mexico.

One suspects the debate in Texas might have been different had the racial roles been reversed. What happens when the Ku Kluxers want tax credits to remake "Birth of a Nation"?

If governments fund movies, censorship is a given. Among the films ineligible for Florida incentives, for example, are "pornographic productions" and (perhaps in the same spirit) "political programs, political documentaries [and] political advertisements." But even the most casual perusal of the productions being funded by state governments finds a preponderance of low-budget gore fests, as if the tax credits were targeted to bolster the nation's fake-blood industry. Why are states so eager to underwrite reality television and schlocky horror picture shows?

Take Iowa. A start-up called Polynation Pictures came looking for backing for a sci-fi flick so lame it would have embarrassed Ed Wood. With a financing scheme worthy of Max Bialystock, the con these folks pulled was nearly as inept as the film they made, but Iowa's film office was too starry eyed to notice.

As prosecutors would later outline it, the filmmakers submitted millions of dollars in fake or inflated expenses and got the film office's head, Tom Wheeler, to reimburse half the phantom charges. Though such reimbursements are "tax credits," they are not mere relief from the tax burdens filmmakers bear. The credits are vouchers given out based on the producers' expenses, which can then be sold for cash to anyone with a tax liability. Many states underwrite as much as a quarter to 40% of the total budgets of films or TV shows they back. In Iowa, Mr. Wheeler was advertising he could offer "half-off film making."

The $767,250 production Polynation Pictures proposed eventually came in at $3.7 million. This was achieved in part with preposterous expenses. Producers claimed they paid $1,350 to rent six orange road cones. The use of two 6-foot ladders supposedly cost the company $900 (a bargain, as Polynation claimed to have spent another $900 to rent a single 8-foot ladder). Among production necessities was a new Mercedes. The partners set up an array of separate companies and used them to bill themselves extravagantly for work supposedly done on the picture. These were presented to Iowa as "deferred payments"—to be paid if the movie made money (which the enterprise was sure to do when Iowa handed the tax credits over). The only thing missing was a staged rendition of "Springtime for Hitler."

Several of the producers have already copped pleas. And two weeks ago a jury found Mr. Wheeler guilty on one count of facilitating the scam. The jury—which could have convicted him on eight other charges—seems to have concluded the former head of the film office was an idiot, not a crook. When Iowa finally audited the office last year, it found that some $25 million of the $32 million in film tax credits issued to various productions had been wrongly given out.

Hollywood accounting is a notoriously dark art. By trying to bankroll moviemaking, states put themselves in the position of being either saps or censors. How much better to promote industry, film or otherwise, simply by making it cheaper and easier for everyone to do business in a state.

As for "Jersey Shore," hasn't the state already contributed enough? This spring, Rutgers, the state university of New Jersey, paid $32,000 for Snooki to lecture its young scholars. "Study hard," she urged, "but party harder." And yes, be sure to get a government grant while you're at it.

From Below The Line News by Leslie Lindeman

2011-09-22T11:17:00.000-07:00

|
The Louisiana Model

The First State to Implement Tax Incentives, Works to Perfect the System
September 21, 2011 | By Leslie Lindeman

From King Kong on the Empire State Building to Marilyn Monroe on the subway grate, New York will always attract filmmakers. From the green Pontiac Steve McQueen chased off the 19th floor of Marina Towers in The Hunter, to the baby carriage Brian DePalma pushed down the steps of Union Station in The Untouchables, filmmakers will always gravitate to Chicago.

But Louisiana?

When Louisiana became the first state to pass entertainment industry tax incentives in 2002, no one could have known that in less than a decade the state would be the third most popular film and television location in the U.S. Indeed, Louisiana has a chance to log a record 150 filming applications this year and to see local film and TV in-state spending for the first time top $1 billion.

The journey has not been without adversity. Hurricanes Katrina and Rita devastated southern portions of the state in 2005 and the Deepwater Horizon Oil Spill thoroughly disrupted the coastal economy in 2010. But Cajuns are nothing if not indomitable. “People would mention it (concerns that weather could disrupt filming),” said Chris Stelly, the interim director of the state’s Office of Entertainment Industry Development, “but time and education have soothed fears. The numbers of storms we’ve experienced and the amount of time people have to adjust when they do occur, has rendered them a non-issue,” he said.

Depending on the season, some productions choose to buy weather insurance, Stelly said, but the cost relative to the total budget and the weight of the state’s tax incentives, isn’t enough to undermine the overall cost effectiveness of shooting in Louisiana.

In contrast to the national jobs picture, Louisiana entertainment industry employment is up sharply. Hollywood generated more than 6,000 jobs in the Bayou State in 2007 (the last year for which statistics are available). IATSE membership has risen from fewer than 200 in 2002, to more than 1,000 today. The state is now 10 to 11 crews deep, Stelly said.

An oft-quoted independent analysis shows that film and TV productions spend $5.71 inside the state for every $1 in tax breaks they receive. Louisiana politicians are so confident in the incentives that they recently extended them beyond film and TV production. Stelly’s agency now governs incentive programs for three additional genres: sound recording, digital and interactive (such as computer games) and live performances. If you want to record “Big Whiskey and the Groogrux King,” in New Orleans as the Dave Matthews Band did in 2009, you get a 25 percent tax break; if you want to hire 20 software designers and set up shop creating games for smart phones as the French company Gameloft did in New Orleans last month, you get the tax credits; and if you want to stage a play, hold a concert or build a performing arts center in Shreveport, you qualify for the 25 percent break.

Film and television credits are even higher since 2009 when the legislature raised them to 30 percent. They also increased to 85 cents on the dollar the state’s commitment to buy back any tax credits that entertainment companies don’t need or can’t sell. The state also offers a 5 percent labor tax credit on payroll for Louisiana residents.

Meanwhile, since Louisiana instituted tax incentives nine years ago, 43 other states and more than a dozen foreign countries have followed suit; in many cases the packages are closely modeled on Louisiana’s original program.

But back in 2002 when Louisiana made its groundbreaking offer, the industry there had only fledgling status and no one could say for sure the plan would work. Canada had passed incentives in 1997 and lured production north, but relatively speaking, Louisiana had almost no infrastructure, crew or established locations.

The first big feature film to test the waters, Stelly said, came in 2003 courtesy of director Taylor Hackford and actor Jamie Foxx. “As the story goes, they were trying to get Ray made for maybe 15 years,” Stelly said, “and the director and producers have said since then, that our incentives were the difference. They (the tax credits) finally brought the amount needed to make that film within the limits of what they could afford – and that’s how Ray got made and Jamie Foxx got his Oscar.”

The same scenario is repeated with most of the productions that shoot in Louisiana today, Stelly says. “With the $30 to $80 million budget having disappeared from the landscape, the lower your budget, the more important the savings. An independent film will rely more on incentives because that money will go back into the product,” he said. “For those films, a 30 percent credit is often the difference between getting the project made or not. Our bread and butter has become the film in the $20 million range that comes in and spends about 80 percent of the entire budget in our state,” Stelly said.

Early on, Louisiana did not capture such large percentages of production budgets, but in the last few years the state has added significant amounts of stage space and postproduction facilities, and the efforts are paying off. The Celtic Media Centre in Baton Rouge, an hour from New Orleans, is managed by Raleigh Studios and recently expanded to 150,000 square feet of stage space and 81,000 square feet of office space. The studio owes its beginnings to a native Irishman named Brendan O’Connor who had run a transportation business in Baton Rouge for 30 years. In 2006 O’Connor began converting the shell of an abandoned recording studio into sound stages and three years later the studio hosted Sony’s Battle: Los Angeles. A year later it welcomed the two largest productions in the state’s history, NBC Universal’s Battleship, and Summit’s Twilight Saga: Breaking Dawn Parts 1 and 2.

Cineworks Louisiana, a full-service post facility with its Louisiana headquarters in New Orleans, opened a satellite location at Celtic Media last month as part of an ongoing strategy to have facilities throughout the state.

Unlike many states, Louisiana’s film business is not concentrated in one city. Productions set up in New Orleans, Baton Rouge, 100 miles to the north, and Shreveport, 340 miles north. Even Lafayette, a town of 120,000 west of Baton Rouge, is seeing action. The L.A.-based visual effects company, Pixel Magic, opened an office there in January, 2010 with a staff of 21, including 11 University of Louisiana graduates. One of the shop’s first assignments was 3-D conversion of 420 shots for, Harry Potter and the Deathly Hallows: Part 2.

“Most of the producers bringing projects to Louisiana this year have been here before,” Stelly said, “but not all of them. Producers call me all the time saying, ‘I’ve never been (to Louisiana), I don’t know if my project will work there.’

“I tell them, ‘Come here and see what we have going on. Look at the locations. Look at the facilities.’ It’s no different than someone who has never been to L.A. – you’ve heard what goes on there but until you see it, you don’t really know why it’s the motion picture capital of the world. So 99 times out of 100 they’ll call me back and say, ‘You were right. I don’t know what my concerns were, but they weren’t well founded.’

“A lot of people fall in love with this state,” Stelly said, “including a good number of people from L.A. who move in and make this their primary home.”

Meanwhile, one of the most gratifying things about the incentives program is the homegrown talent that is returning to the state. For instance, software-developer brothers Keith and Ken Hanson returned to Louisiana from the Bay Area to open Twin Engine Labs in Shreveport. Some of their work has been in conjunction with groundbreaking Louisiana author and publisher William Joyce, whose company, also in Shreveport, is called Moonbot Studios. Joyce’s first project is his digitally interactive and animated book, The Fantastic Flying Books of Morris Lessmore. The app of the same name is ranked #1 on iTunes.

Stelly and others have high hopes for the 25 percent tax incentives applied to music recording because the state has a strong historical tie to the music industry and a tradition of attracting top musicians. Grammy-winning drummer and producer Brady Blade, who has played on 50 records with Dave Matthews, Emmylou Harris, Indigo Girls, Jewel and Bob Dylan, recently opened Blade Studios in his native Shreveport. “Technology has made sound recording a lot simpler,” Stelly said. “Mixing boards that took up a room now fit in an iPad and a lot of recording can be done in home-type studios, but most musicians still like to get out.”

That’s where Louisiana’s rich musical history comes into play. For instance, in 1954 Elvis Presley got the first of what would eventually be innumerable rousing public responses when he played in Shreveport on the radio show, The Louisiana Hayride. At the time, he had not yet been received well at the Grand Ole Opry. “You hear anecdotes about Robert Plant walking around Shreveport, sort of in the shadow of Elvis, and Eric Clapton sitting on the stage,” of the municipal auditorium where Elvis played, he said. “Music means a lot in Louisiana and people like to come here to record.”

But film and TV are still posting the biggest numbers in Louisiana. As we head into the final quarter of 2011, Hollywood has spent nearly $800 million on production in the state and spending should easily surpass the record set last year of $898 million. Perhaps it will even top $1 billion.

Some final facts about Louisiana incentives:

• Fringes qualify

• Productions should allow 30-45 business days to receive initial certification.

• The minimum local budget is $300,000

• Finance fees qualify as long as the purchasers are from a Louisiana company.
Latest Headlines
September 22, 2011

From Politics On The Hudson Blog

2011-09-14T08:24:00.000-07:00

(to see the huge list of productions, go to this site and then scroll down...
http://polhudson.lohudblogs.com/2011/09/13/your-tv-guide-to-new-yorks-film-tax-credit/

Your TV Guide To New York’s Film Tax Credit

Posted by: Joseph Spector - Posted in Uncategorized on Sep 13, 2011

Following our recent report on the state’s lucrative film-tax credit program, here’s the list of all the shows and movies that have received film-tax credits from New York between Jan. 1, 2008 and May 31 of this year.

Gannett’s Albany Bureau filed a Freedom of Information request in May seeking from the state Empire State Development Corp. the amount of taxpayer-funded breaks that each project has gotten. But the agency hasn’t released the information, saying much of it could be proprietary.

It did release a list of the shows and movies that received tax breaks, but not how much each one got. The shows and movies are popular ones: including “30 Rock”, “Ugly Betty” and “Law & Order”.

From the article:

Some hits on the big screen have also received state tax breaks: the Will Smith movie I Am Legend, the critically acclaimed Black Swan and both Sex and the City movies.

Even Saturday Night Live — a New York City staple for decades — got tax breaks, including for its election specials in 2008, records show.

All are courtesy of the New York State Film Production Credit program. The state has aggressively expanded the tax credit, agreeing in 2010 under then-Gov. David Paterson to set aside $420 million a year for five years for the production of movies and television shows through a 30 percent break on many expenses.

Supporters hail the program as an economic boon and a way to stay competitive with other states.

But the success has been criticized as a New York City-focused initiative funded by the entire state. And the big bucks for the studios come as New York has cut back on funding for schools, trimmed its workforce and limited aid for job-creation programs.

Empire State Development Corp. said it has issued tax credits to 274 productions worth $824 million since the program started in 2004.

Your TV Guide To New York’s Film Tax Credit

Posted by: Joseph Spector - Posted in Uncategorized on Sep 13, 2011

Following our recent report on the state’s lucrative film-tax credit program, here’s the list of all the shows and movies that have received film-tax credits from New York between Jan. 1, 2008 and May 31 of this year.

Gannett’s Albany Bureau filed a Freedom of Information request in May seeking from the state Empire State Development Corp. the amount of taxpayer-funded breaks that each project has gotten. But the agency hasn’t released the information, saying much of it could be proprietary.

It did release a list of the shows and movies that received tax breaks, but not how much each one got. The shows and movies are popular ones: including “30 Rock”, “Ugly Betty” and “Law & Order”.

From the article:

Some hits on the big screen have also received state tax breaks: the Will Smith movie I Am Legend, the critically acclaimed Black Swan and both Sex and the City movies.

Even Saturday Night Live — a New York City staple for decades — got tax breaks, including for its election specials in 2008, records show.

All are courtesy of the New York State Film Production Credit program. The state has aggressively expanded the tax credit, agreeing in 2010 under then-Gov. David Paterson to set aside $420 million a year for five years for the production of movies and television shows through a 30 percent break on many expenses.

Supporters hail the program as an economic boon and a way to stay competitive with other states.

But the success has been criticized as a New York City-focused initiative funded by the entire state. And the big bucks for the studios come as New York has cut back on funding for schools, trimmed its workforce and limited aid for job-creation programs.

Empire State Development Corp. said it has issued tax credits to 274 productions worth $824 million since the program started in 2004.

From The Contra Costa Times, by Bob Strauss

2011-09-11T13:58:00.000-07:00

Senate OKs production incentives
By Bob Strauss, Staff Writer

In the wee hours of Saturday morning, the California Legislature extended the state's film and television tax credits program for one year.

The state Senate voted 34-2 to continue the $100 million per-year incentive to keep production in the entertainment industry's home state available through 2013.

The Assembly had passed a bigger, five-year, $500 million version of the bill in May by a 77-1 margin.

"I'm happy to get what I got," said Assemblyman Felipe Fuentes, D-Arleta, who authored the extension bill, AB 1069. He had bargained throughout the legislative session to come up with a version that wary Senate President Pro Tem Darrell Steinberg, D-Sacramento, would bring to a floor vote.

"But I will say that I agree with what I think the industry would say, which is that if we're going to send a market signal that's meaningful, it has to be a comprehensive program that, in my opinion, would have to be more than just one year," Fuentes added. "So while I'm not completely satisfied with what the Senate did to the bill, I'm confident that it, at least, continues to help the industry."

The legislation now awaits Gov. Jerry Brown's signature. Should he sign it, Fuentes intends to introduce a measure that would continue the film tax credits program for four more years when the Legislature reconvenes in January 2012.

California's first-ever production tax credit program, which was instituted during Gov. Arnold Schwarzenegger's
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administration, runs out of funding next July. It was passed, after decades of failed attempts, in response to the incentive programs in other states and foreign countries that have lured runaway productions from California and especially the Los Angeles region.

As the national recession has persisted, however, some cash-strapped states have begun reassessing their film incentive programs. California's dire budget situation, which has led to severe cutbacks in education and other state programs, is at the root of the Senate leadership's reluctance to hand tax breaks to the relatively wealthy entertainment industry.

A Los Angeles County Economic Development Corp. report released in June found that the first two years of the tax credits program resulted in more than 20,000 film and TV industry jobs, and the tax revenues those productions generated were slightly more than the credit amounts, rendering the program essentially budget neutral.

Assemblyman Chris Norby, R-Fullerton, who voted against Fuentes' bill, is skeptical.

"I don't think it's the government's job to pick and choose economic winners by manipulating the tax system. I mean, either give tax credits to everybody or give 'em to nobody.

"Why is Hollywood more deserving than RV manufacturers or strawberry growers or wineries?"

Supporters of the film tax credits, which include just about every production company and workers union in the state, are unambiguously bullish about the incentive.

"We're into our third year of the program and it has been highly successful," said California Film Commission Director Amy Lemisch, who administers the tax credits. "Any extension would help us to keep more production in California."

From KWQC.Com/ Associated Press

2011-09-11T13:54:00.000-07:00

'Contagion' spreads film cash in Illinois

CHICAGO (AP) - The new film is called "Contagion." But what state officials hope the rest of the country is catching is a fondness for making movies in Illinois.

Illinois' Department of Commerce and Economic Opportunity says the movie about a deadly virus generated about $12.5 million in the state.

"Contagion" stars Matt Damon, Gwyneth Paltrow and Kate Winslet. And it premiered nationwide Friday.

Dozens of Chicago-area locations are in it, including Chicago's Palmer House Hilton and Midway Airport.

Illinois officials say "Contagion" helped make 2010 a banner year for the state's film industry. Overall, the year saw a record $161 million in movie-related spending.

The Illinois Film Tax Credit provides a 30% tax credit to filmmakers for money spent on Illinois goods and services. That includes wages paid to Illinois residents.

From WTDN.Com ... Ohio Has Its Act Together, Or Acts

2011-09-11T13:50:00.000-07:00

Filming begins soon for 5 Ohio movies

COLUMBUS, Ohio (WDTN) - Ohio’s film industry continued to grow as Ohio’s Motion Picture Tax Credit secured more productions in September.

The following five projects will bring in anticipated revenue of more than $17.1 million for Ohio.

Confession will receive a $1,033,712 Ohio Motion Picture Tax Credit to shoot in an Ohio location that is yet to be determined. Confession revolves around the murder of a retired sheriff and the investigation to find the perpetrator. The cast of the film includes Danny Glover (Lethal Weapon, Saw), Melissa Leo (The Fighter, 21 Grams), and is directed by Stuart Cooper.

Galaxy Command will receive a $116,177 Ohio Motion Picture Tax Credit and will be produced in the Akron area. This interactive video game, which is produced by Blue Frog Gaming and directed by Matthew Maroon, involves players competing for the largest empire in a vast virtual universe. Gamers conquer planets, mine resources, and build warships throughout their quest to achieve virtual domination.

Needlestick will receive a $193,750 Ohio Motion Picture Tax Credit to shoot in the City of Toledo and the City of Maumee. The film, directed by Dr. Steven Karageanes, explores medical ethics and the value of human life and character. The script won horror feature awards at the Action On Film International Festival in Pasadena, California and was a finalist in the Great American Screenplay Competition.

The Yank will receive a $330,831 Ohio Motion Picture Tax Credit to shoot in the Cleveland area and other locations in northern Ohio. This romantic comedy, rumored to star Fred Willard (Best in Show), centers around a middle-aged Irishman’s search for love in the country of his ancestors.

Unamerican will receive a $1,699,540 Ohio Motion Picture Tax Credit to shoot in northeast Ohio. The film is a satirical depiction of contemporary American society in which one man loses his seemingly perfect materialistic lifestyle due to corporate downsizing but gains insight on the true meaning of life.

See This Local TV Report On Film Trial

2011-09-07T05:20:00.000-07:00

Tom Wheeler, the Official Iowa Film Scandal Scapegoat, was convicted on only one of nine charges yesterday. The following web site is a good report ...

http://www.woi-tv.com/category/190187/myabc5com-video

The (scape)goat at the bottom of the hill

2011-09-06T17:48:00.000-07:00

They say that “shit flows downhill”. They also say that “scum rises to the top”. Both were proven today with todays verdict at the Tom Wheeler trial. Tom Miller, the prosecuting attorney threw everything he had at Tom Wheeler but the jury only aligned itself with the prosecution for one count - “Felonious Misconduct”.

Throughout the trial Miller tried to paint Wheeler as the “inside man” and as someone “with an inflated sense of self-importance”. The “inside man” charge simply didn't fly given the evidence. Given the background of Tom Wheeler – him having a low level Production Assistant job at Fox Animation, and then having to return to Iowa to work such jobs as landscaping and the photo Department at Walgreens, it isn't surprising that he might display a bit of puffed up pride when he finally gets a title (Director of the Iowa Film Office) and a decent salary for a change. What for Tom Wheeler was pride in an important position was for his higher ups “arrogance” and you just know they can't stand someone who is uppity – especially in an office that they consider unimportant and just for “fun”. He was a “maverick” according to them, a regular loose cannon and when things went sour it was him who was to blame. Tom Wheeler was the one to throw under the bus.

And who instigated the whole mess? Mike “Teflon” Tramontina. He brought up the issue of the cars and then simply resigned and floated down gently to another cushy, well paying job. He blithely skipped off, leaving the mess to those who were left. Of course he made no mention of denying Tom Wheeler additional staffing for the Film Office because it was just there for “fun” or that he had denied a request from the Iowa Department of Economic Development's Legal and Compliance section to help Tom with the avalanche of contracts and make sure the producers were complying with the terms of the agreements.

It wasn't the first time that Mike “Teflon” Tramontina had left trouble behind while nimbly avoiding the fallout as this item in CityView's “Civic Skinny” column points out:

“The hurried “resignation” of Iowa Economic Development Director Mike Tramontina surprised folks who have watched his career. A lifelong bureaucrat, Tramontina had a survivor’s instinct almost unparalleled in the state. The single biggest screw-up in the not-very-many-screwups administration of Tom Vilsack was the hiring — for millions of dollars — of A.T. Kearney to find efficiencies in state government. It was ill-conceived and badly implemented, and it accomplished little if anything. Tramontina, who was then running the Iowa Department of Management, was “driving that bus,” in the words of one guy who followed it closely, but when the shooting and the shouting were over, it was Mollie Anderson of the Department of Administrative Services who eventually left. Most folks assumed Tram would leave at the end of the Vilsack reign — the Culver people have little use for anyone associated with Vilsack — so it was a surprise when Tramontina ended up with the plum $145,000-a-year job at Economic Development. He wasn’t the first choice — UNI’s Randy Pilkington, and perhaps others, were sounded out — but he got the job, and Culver called him “a proven leader.” It was under Tramontina’s watch that the IDED was roundly criticized by the state auditor for failing to monitor, verify and assess a jobs-training program the community colleges run to help lure and keep businesses. It was fraught with, at best, sloppiness — at worst, negligence. But he sidestepped that one, too. Last week, the nimble Tramontina did his best to shift blame in the mess over film tax credits that led to his resignation late Friday. On Wednesday, he sent a cover-your-ass memo to his board and the Governor’s office noting that he had discovered these irregularities and laying out his plan of action. But it was too little, too late. By Friday evening, he was toast.

The lesson, says one pol: 'If you’re going to fuck something up, don’t do it in an election year.' Even if you’re Mike Tramontina.”

And then there is Vince “hear no evil, see no evil” Lintz who rubberstamped everything Tom Wheeler put on his desk without checking much of anything – who essentially said during testimony at the Wendy Runge trial as well as this one “I just let Tom do everything”.

And finally we have the prosecutor himself, Tom Miller. He was alluded to during the trial of giving no help at all to the Film Office. If anything lately Tom Wheeler is certainly not the defender of Iowans and the public purse but has eagerly taken on the role of the protector of the wealthy and the powerful. Think about it. Who had more power and connections within state government – Tom Wheeler or Mike Tramontina? Who has the Attorney General's Office gone after for “felonious misconduct” and on who's urging? So far Miller's office has wasted lots of tax payer's money on this perscecution and witch hunt while the man who made all of this possible, Mike “Teflon” Tramontina sits comfortably in a new job. And, to go off on a tangent, there is Tom Miller letting subprime lenders get away with fraud and siding with these people rather than Iowans losing their homes. But I digress.

A quote from one of the latest articles on the verdicts of the Tom Wheeler trial:

"Fraud in state government, whether perpetrated by those outside of state government, or enabled by those within state government, cannot and will not be tolerated," said Deputy Attorney General Thomas J. Miller.

Yes, that's right. Tom Miller won't tolerate fraud unless it is by subprime lenders and he won't tolerate felonious misconduct unless it is by someone well-placed and well-connected such as Mike “Teflon” Tramontina.

A great injustice was meted out today at the trial and Tom Miller was able to bring home the trophy to the powerful people he serves. Yes, today Tom Wheeler became the sacrificial goat so that those above him could escape all personal responsibility and any bit of tarnish on their images.

Fate of film office chief in jury's hands

2011-08-31T16:13:00.000-07:00

by Rod Boshart/Cedar Rapids Gazette

DES MOINES – A state prosecutor Wednesday painted Tom Wheeler as a low-level manager with an inflated sense of importance who conspired with crooked filmmakers to defraud Iowa taxpayers while his attorney charged prosecutors with engaging in deception by making him the scapegoat for an ill-conceived film tax credit program riddled with problems.

The final chapter in the former Iowa Film Office director’s saga will be written by a Polk County jury of nine women and three men who began deliberating Wheeler’s fate Wednesday afternoon on charges of felony misconduct in office, first-degree fraudulent practices, and conspiracy. Wheeler, 42, of Indianola, pleaded not guilty to all nine counts brought against him.

During closing arguments, Iowa Deputy Attorney General Thomas H. Miller said Wheeler used his position as an insider to aid and abet at least six filmmakers who allegedly stole millions of dollars in tax credits from the state.

He also contended that Wheeler -- as “one of the very most important men as manager of the film office offering the most generous film incentive in the United States” -- assisted filmmakers by knowingly altering and substituting public documents, as well as knowingly approving false and inflated expenses submitted to his one-man office.

“But for his willful blindness, but for his winking and nodding and approving of all of these frauds, the state of Iowa wouldn’t have lost any money,” Miller told jurors.

The prosecutor said the defense was attempting to offer “ignorance” an excuse for Wheeler’s actions, but he pointed to inflated rental charges of hundreds of dollars for step ladders and push brooms listed in expense forms that the film office manager approved for tax credits in instructing jurors to “bring your common sense with you when you go back in the jury room.”

However, defense attorney Angela Campbell urged jurors to consider the number of witnesses for both sides who vouched for Wheeler’s honesty and good character in sorting through the prosecution’s “shotgun approach” of taking things out of context, creating “all sorts of red herrings” and using terms like “crooks” to lump him into a “kitchen sink” conspiracy with people who were submitting the documents in question.

“It’s hard to defend yourself against an onslaught of mudslinging,” Campbell told jurors in her closing statement in a trial in its third week.

Wheeler and five other people in the state Department of Economic Development lost their jobs when an unfolding scandal triggered by the purchase of luxury vehicles deemed eligible for tax credits prompted former Gov. Chet Culver to suspend the program and request a probe by the state auditor and attorney general after an internal audit raised concerns about lax oversight, mismanagement, inadequate documentation of expenditures, and payments for questionable in-kind services.

Wheeler was hired in 2004 primarily for marketing and promotional duties, but his duties and the demands on his office exploded in 2007 when Iowa began providing a 25 percent tax credit for production expenditures made in Iowa and a 25 percent tax credit for investors for projects that spent at least $100,000 in Iowa.

He testified that he did not have adequate training, contract and accounting expertise, staff or resources to handle the “tsunami wave” of requests for information by interested filmmakers that overwhelmed his office.

A state audit released in October 2010 detailed $25.6 million in tax credits allegedly issued improperly to film projects. Nearly $32 million worth of tax credits were granted to 22 film companies, and State Auditor David Vaudt said he was surprised to find that about 80 percent of the claims involved payments for expenditures where there was no proof or inadequate documentation.

Campbell said Wheeler relied on the direction from state Department of Revenue and DED officials to administer the tax-credit program and approved the vehicle purchases because he was told they were qualified expenditures under the circumstances in which they were used.

While he may have been naïve at times, he did not engage in criminal activity and the state failed to prove he committed knowing and intentional fraud.

“Tom Wheeler tried to fix the problem, but he was fired before he could do it,” she said. “He did what he thought was his job and he did it to the best of his ability.”

She portrayed Wheeler as “an over-worked, under-qualified person put into a position he should have never been put into without the support he should have been given” who kept his superiors informed and maintained a paper trail of email and documentation of his film office dealings.

“That’s not hiding, that’s not deception, that’s not fraud,” Campbell said.

However, Miller said Wheeler intentionally withheld information from his bosses – including the criminal background of a California filmmaker who signed an Iowa film tax-credit contract -- and at times helped filmmakers manipulate Iowa’s incentive program to their advantage as the “man on the inside” who would “turn a blind eye” to inflated expense claims or sponsorship values that a reasonable person would have challenged.

By Roth & Company, PC Tax Update Blog

2011-08-31T15:40:00.000-07:00

Roth & Company, PC Tax Update Blog

Teaching a lesson in loyalty to the bureaucracy
August 31, 2011

Former film office Director was on the stand yesterday in his trial on Felony charges of official misconduct. This exchange reported in The Des Moines Register is an eye-opener:

Wheeler testified that he spent long days at the office in 2008 and 2009, frequently took film calls at his home and even fielded emails during his father’s funeral.

"Why would you do that?" defense attorney Angela Campbell asked.

"Because I was on call 24-7, 365, and I was a loyal servant to the state," Wheeler responded.

That, of course, would be the state that is trying to put him in jail for a program that was ill-conceived, badly drafted, and put in the charge of a guy who was hired to sell Iowa to the film industry, not run an enormous spending program with almost no guidance, oversight or staff.

While Mr. Wheeler didn't exactly cover himself with glory in administering this pinata for Hollywood, it's hard to see where it was corruption, rather than ineptitude. Even the prosecution has presented no evidence that Mr. Wheeler got any personal benefit. They want to put him in jail. Meanwhile, his immediate supervisor, the officials in other departments who green-lighted some of the worst abuses, the 143 legislators who passed a law with no definitions, limits, controls or funding, and the Governor who signed the bill and who has ultimate responsibility for its administration, skip away without consequence.

Closing arguments are set for today.

I Think Tom Wheeler Is A Good Man Deserving Acquittal

2011-08-30T18:25:00.001-07:00

August 30, 2011 At the Wheeler Trial

I went with fellow actor Jay Villwock to the Tom Wheeler trial today, where we observed most of the afternoon proceedings in which Tom took the stand and faced his attorney, Angela Campbell, as well as the prosecutor, Thomas H. Miller.

My account of today's courtroom action is a series of small paragraphs and isolated sentences. Sorry, but the events today were chopped up and assorted, difficult for me to compose in large easy-to-digest chunks. Here you go.....

Tom's brothers Kent and David were present, as was their mother and Tom's girlfriend.

The jury consists of only three men, with the remaining nine jurors being women, which I find interesting because of the fact that Tom's lawyer is also a female. Why is this of interest? Well, I guess I'm hoping the jurors will find the lawyer for the defense easier to relate to.

Okay, enough of that. Now back to the trial.

Tom was asked about the producer of "The Underground", a Mr. Goldstein, and why he would have changed his name to Gold. Tom theorized that it was because Mr. Goldstein feared that some Iowans would have felt uneasy dealing with a jewish person. Mr. Goldstein had been convicted of a felony, of which Tom knew nothing when dealing with his tax incentive application.

The topic of the Range Rover came up and Tom said the "South Dakota" producers said the car would be used to transfer personnel, such as the top stars, and also for camera work. He said he did not know of any fraud involving this car.

As for the producers of "Children of the Corn", where a Mercedes car was purchased, Tom was told it would be used to transport talent. He said the state law did not restrict the use of a vehicle and therefore he did not see a violation regarding the car purchase.

He said people were mad about these car purchases and that he made efforts to modify the law but legislating changes requires a cumbersome and lengthy process and nobody took necessary action to change the law.

Tom said he wanted to keep a solid paper trail. At today's proceeding the prosecutor introduced several emails in which Tom communicated with various movie producers, which proves he did in fact maintain a good paper trail.

He said he felt he was organized but that he "had a lot to juggle". Tom said that in the summer of 2009, the IDED "rifled through everything and made a wreck" of his files. He said he worked "fifty to sixty hours a week" and was not paid for overtime. Tom said he even took care of IFO emails at his father's funeral. When asked why he said, "Because I was a loyal servant of the state."

When someone suggested that Tom's job was glamorous he pointed out that he never even met Adrian Brody, Forest Whitaker(sp) or other such actors

He wanted and needed help to handle the massive amount of paperwork but was refused by his IDED superiors.

He said he never moved a signature from one contract to another, and that things were always changing with films, requiring him to update data on contracts. It was clear to all of the IDED folks that film costs were not based on contracted amounts and that much was spent for movies at the end of each project.

Background checks were added to his duties, but his plate was overflowing and he would not be able to do this without additional help. He communicated on a regular basis but found that his superiors did not keep their appointments and that there was no open door policy for addressing problems.

Tom said he did raise questions when problems arose and there were no guidebooks to study for matters relating to the department of revenue, attorney general, and nobody clearly stated how to specifically and properly run the IFO in order to satisfy the state.

There was a huge ongoing surge of producers establishing a movie industry here, with the promise of providing jobs for generations of Iowans. 20th Century Fox, and CBS Films were among many studios who were on the verge of establishing roots here.

Prosecutor Miller posed a series of questions, most of which concerning the two luxury cars issue.Miller asked if Tom's hands were on "the pursestrings" of movie money, to which Tom said, "No, I just checked paperwork" and "conducted spot audits and cross-checking". He believed cross-checking would be a good way to discover errors and was a good overall safeguard. He said there was nobody assigned to assist him.

Producer Isaccson (sp) exploited a loophole in the film tax incentives laws, but the law did not restrict the purchase of cars. This was a legislative problem, not fixable without the involvement of Iowa lawmakers.

I feel Tom Wheeler did not knowingly commit fraud or conspiracy and that his superiors flatly refused to throw him a lifebuoy as he bobbed in heavy waves of thousands of pages of paperwork, impossible for one man to manage. Tom strikes me as being a very honest man and I hope he is acquitted of all charges and will be able to move on with his life.

Wheeler: I made mistakes, but none were criminal

2011-08-30T14:39:00.000-07:00

Former Film Office director again takes stand in his own defense

by Rod Boshart/Cedar Rapids Gazette

Former Iowa Film Office manager Thomas Wheeler admitted Tuesday that he made mistakes overseeing the state’s film tax-credit program, but none were done with criminal intent or to help others commit fraud.

During his second day of testifying in his own defense at his criminal trial, Wheeler said the missteps in administering what had become the nation’s most lucrative film incentive largely were rooted in:

The new incentive law’s many ambiguities.
A number of evolving interpretations being made by state tax and economic development officials over what expenses and in-kind services were eligible for investors and producers seeking transferrable state tax credits.

The former state employee said the “tsunami wave” of contacts that flooded his office once Iowa began providing a 25 percent tax credit for production expenditures made in Iowa, plus a 25 percent tax credit for investors for projects that spent at least $100,000 in Iowa coincided with other challenges that engulfed the state Department of Economic Development. Those challenges included the state’s worst flooding disaster, the national recession and state budget cuts that all stretched DED resources thin.

Wheeler, 42, of Indianola, is being tried in Polk County District Court on charges of felony misconduct in office, first-degree fraudulent practices, and conspiracy for his role as film office manager from 2004 until September 2009 when an unfolding scandal triggered by the purchase of luxury vehicles deemed eligible for tax credits prompted former Gov. Chet Culver to suspend the program. He has pleaded not guilty to all the criminal charges filed against him.

Wheeler and five other people lost their jobs in the economic development agency when an internal audit raised concerns about lax oversight, inadequate documentation of expenditures, payments for questionable in-kind services, and credits that had been issued for the purchase of luxury vehicles that were later taken to California for personal use.

Wheeler said throughout his time at the film office he followed the law to the best of his ability even though the details were murky at times and “the variables were literally infinite.” He said his firing was unexpected. “When I was charged, it was a surprise,” he said.

Under questioning by his defense attorney, Angela Campbell, about mistake he made, Wheeler said: “That’s why we’re here in part, I made a lot of mistakes.”

Asked by Campbell: “Did you ever intend to make a mistake that would cause people to be able to commit fraud?”

“Absolutely not,” Wheeler replied.

State prosecutors were expected to begin their cross examination of Wheeler on Tuesday, and the jury of nine women and three men was expected to get the case later this week.

Mike Tramontina - Not the first time he's left a mess behind.

2011-08-30T14:30:00.000-07:00

Here is a very interesting item that was in the September 24, 2009 issue of Des Moines CityView in their "Civic Skinny" column. Apparently what happened with the Film Office wasn't the first mess that Mike Tramontina had left behind and escaped from.

What it said:

"The hurried “resignation” of Iowa Economic Development Director Mike Tramontina surprised folks who have watched his career. A lifelong bureaucrat, Tramontina had a survivor’s instinct almost unparalleled in the state. The single biggest screw-up in the not-very-many-screwups administration of Tom Vilsack was the hiring — for millions of dollars — of A.T. Kearney to find efficiencies in state government. It was ill-conceived and badly implemented, and it accomplished little if anything. Tramontina, who was then running the Iowa Department of Management, was “driving that bus,” in the words of one guy who followed it closely, but when the shooting and the shouting were over, it was Mollie Anderson of the Department of Administrative Services who eventually left.

Most folks assumed Tram would leave at the end of the Vilsack reign — the Culver people have little use for anyone associated with Vilsack — so it was a surprise when Tramontina ended up with the plum $145,000-a-year job at Economic Development. He wasn’t the first choice — UNI’s Randy Pilkington, and perhaps others, were sounded out — but he got the job, and Culver called him “a proven leader.” It was under Tramontina’s watch that the IDED was roundly criticized by the state auditor for failing to monitor, verify and assess a jobs-training program the community colleges run to help lure and keep businesses. It was fraught with, at best, sloppiness — at worst, negligence. But he sidestepped that one, too. Last week, the nimble Tramontina did his best to shift blame in the mess over film tax credits that led to his resignation late Friday. On Wednesday, he sent a cover-your-ass memo to his board and the Governor’s office noting that he had discovered these irregularities and laying out his plan of action. But it was too little, too late. By Friday evening, he was toast.

The lesson, says one pol: “If you’re going to fuck something up, don’t do it in an election year.” Even if you’re Mike Tramontina."

Apparently Tom Wheeler isn't the guy that prosecutors should really be going after. Tramontina is.

Lee Rood's Article In Des Moines Register Today

2011-08-30T04:08:00.000-07:00

Wheeler: Agency denied help for program
He said he knew he needed more resources, but was turned down.

Written by
LEE ROOD

Iowa’s former film chief quickly realized he needed help running the new film program passed by legislators in 2007, but a state agency head told him he wasn’t getting any, he testified Monday.

Tom Wheeler — facing charges of felony misconduct, first-degree fraudulent practicies and first-degree conspiracy — took the witness stand in his own defense.

His testimony signals that the trial of the only state official charged in the film tax-credit scandal is nearing an end. The prosecution is expected to cross-examine Wheeler today, and the three-week trial could go to a jury later this week.

Wheeler, who was hired at the Iowa Department of Economic Development in 2004 and fired after abuses of the program were discovered in 2009, said everything about his job changed after a new tax-credit program for filmmaking took effect in the summer of 2007.

Thanks to the incentive program, filmmaking in Iowa skyrocketed from 2007 through 2009. The film industry brought $82 million in new economic activity to the metro area during that time period, according to earlier testimony in the case.

But Wheeler testified Monday that not only were there no rules and no template for how the unique program should work, no one at Iowa’s Department of Economic Development had any experience with film incentive programs.

“There were tremendous problems from beginning to end,” Wheeler told the jury.

Wheeler testified that former Department of Economic Development Chief Mike Tramontina flatly refused to provide the new program extra resources when he came and asked for help in the fall of 2007.

“I said, ‘I think this program is going to pick up some speed. I’m already up to my shoulders,’ ” Wheeler said. “… He said, ‘You’re not getting any help.’ ”

Tramontina testified last week that he could not recall the specifics of conversations he had with Wheeler.

Prosecutors are trying to prove that Wheeler not only mismanaged the film office, but that he intended to aid others in defrauding the state.

A state audit has shown that $26 million of nearly $32 million in tax credits were awarded improperly by the film office, either because the productions did not qualify for the credits or because documentation was incomplete.

Wheeler testified that Tramontina seemed to think his job was still primarily marketing the state to filmmakers after the tax-credit program began. All state agencies were undergoing budget cuts at the time, and “the department was at its limit,” Wheeler said.

But Wheeler said the one-man film office quickly fell behind. He was building new forms for contracts and applications, fielding calls from more filmmakers and accumulating so much data on projects, it overwhelmed the Department of Economic Development’s server.

Wheeler said he had to buy an external hard drive at his own expense because he was told the department had no money to spend on new equipment.

Wheeler said he began to run the program through trial and error, eventually coming up with a system for tracking every contact with filmmakers and every film.

His computer files, which he examined Monday with defense attorney Angela Campbell for the jury, suggested he was far more organized and open than auditors and prosecutors have suggested.

For example, Wheeler maintained a massive spreadsheet, which he said he presented regularly to his bosses. The spreadsheet showed more than 30 details about each project that came across his desk.

Among other things, he kept detailed information of when contracts changed, where they were in the awards process, estimated tax-credit awards, start and finish dates, and budgets.

Campbell and Wheeler reviewed the information because prosecutors alleged Wheeler helped filmmakers dramatically inflate the budget of the movie “The Scientist,” a film by Polynation Pictures, without his supervisors knowing.

“So it is not accurate to say you weren’t telling them about the increases in the budgets?” Campbell asked.

“Not accurate at all,” Wheeler said.

Wheeler said he did everything from gofer work on animated films to landscaping to film processing at Walgreens before he was hired at the Iowa Film Office in 2004.

He said he had no training in contracts, drafting administrative rules, accounting or the law.

UPDATE: Wheeler defends himself against criminal charges

2011-08-29T20:25:00.000-07:00

by Rod Boshart/Cedar Rapids Gazette

DES MOINES – Former Iowa Film Office manager Thomas Wheeler testified Monday he was excited about the prospects of managing the state’s new competitive film tax credit program in 2007, but soon was overwhelmed by the “mind-boggling” complexities of contract and tax laws for which he lacked adequate training, help and expertise.
“I thought I knew what I was getting into,” Wheeler told a Polk County jury of nine women and three men during his trial on felony misconduct in office, first-degree fraudulent practices, and conspiracy charges. “In hindsight, it’s clear that I had no idea.”
Wheeler, 42, of Indianola, who has pleaded not guilty to all the charges for which he’s being tried, said he was hired in January 2004 for a film office job that paid $50,000 a year and mostly entailed marketing the state to prospective filmmakers and providing customer service within the state’s tourism division – duties for which he felt qualified and capable of providing.
However, things changed when state lawmakers approved a new state film tax-credit program in 2007 within the state Department of Economic Development that provided a 25 percent tax credit for production expenditures made in Iowa and a 25 percent tax credit for investors for projects that spent at least $100,000 in Iowa.
“It seemed pretty straight forward at the time. It turned out to be anything but straight forward. I was terribly wrong,” Wheeler said. “There were tremendous problems and challenges that arose the minute it came into existence until the end.”
For starters, the new law was retroactive to cover some film projects that already were in the works or production had been completed. Also, he said a number of areas of the new law dealing with terms like qualified expenditures, residency, Iowa-based businesses and investors were not clearly defined and it was difficult to find reliable people to clear up the ambiguities.
“At the time, did anybody tell you ‘you’ve got it all wrong?’” in administering the program or interpreting the statute or rules, asked defense attorney Angela Campbell.
No,” Wheeler replied.
Also, Wheeler said he was hit by a “flood” of requests for information and explanations that grew into “tens and tens of thousands” of emails and contract details that exceeded his allotment of DED server space and forced him to spend his own money for computer backup to accommodate the voluminous documentation.
“The program never stopped evolving and the questions never stopped coming in. Even after I was fired there were new questions coming in,” he said.
Campbell produced boxes of receipts from film projects that applied for Iowa film tax credits and phone logs that Wheeler compiled to refute prosecution claims that he withheld documents from his supervisors or engaged in secrecy during his stint as film office manager.
Prosecutors allege that Wheeler, who was fired in September 2009 after an independent audit revealed alleged abuse and mismanagement of the state’s film tax-credit program, acted as “an inside man” to help filmmakers fleece the Iowa treasury for millions of dollars by knowingly altering and substituting public documents and approving false and inflated expenses submitted to his office.
The defense has portrayed Wheeler as a low-level manager with no expertise in the movie industry who was put in charge of an ill-conceived but lucrative new state tax incentive program created by the Legislature to attract filmmakers that “spiraled into a giant mess” due to inadequate staffing, training, direction, oversight and clearly defined program perimeters.
“There were just so many hats to wear. Is there anyone else who could wear some of those hats?” Wheeler said.
The former film office manager said he recalled telling then-DED Director Mike Tramontina that the program was picking up and he needed more staff to handle the crush of requests and documents.
“He cut me off. He said you’re not getting any help. That’s it. I thought that was an unusual thing for him to say,” Wheeler testified.
He said the DED director said the film program was “supposed to be fun. You’re not economic development. You’re fun. You just need to promote this stuff.”
However, former Gov. Chet Culver suspended the film-tax credit program in September 2009 after DED employees raised concerns that credits were being issued for the purchase of luxury vehicles that were later taken to California for personal use. After the scandal broke, six people lost their jobs within the economic development agency, including Wheeler.
A state audit released in October 2010 detailed $25.6 million in tax credits allegedly issued improperly to film projects. Nearly $32 million worth of tax credits were granted to 22 film companies, and State Auditor David Vaudt said he was surprised to find that about 80 percent of the claims involved payments for expenditures where there was no proof or inadequate documentation.
Wheeler was slated to continue testifying in his own defense and answering prosecutors cross examination Tuesday in a trial that began Aug. 15 and was expected to go to the jury later this week. District Judge Douglas Staskal excused a woman juror due to illness on Monday and replaced her with one of two women who are serving as alternate jurors.

Another Monday at the Tom Wheeler Trial or "Tom Goes to Wonderland"

2011-08-29T18:25:00.000-07:00

I used my day off again to attend the Tom Wheeler trial. This time I went for the whole day. In the morning I went with Jay Villwock and for the afternoon portion I went by myself.

A lot of what was revealed in today's session was very capably reported by KCCI-TV on their website in this story:

Film Office Director Talks Experience, Budgets, More
http://www.kcci.com/news/28961656/detail.html

There is a very good video clip included that give a good sense of the sort of support that Tom was receiving from the head of the Iowa Department of Economic Development, Mike Tramontina. (Gene Hamilton posted the text of it in the previous post below.)

I will attempt to fill in things I saw that didn't get reported.

When I arrived the first witness for the defense was just finishing up. She was part of Dennis Brouse's Changing Horses Productions from what I could gather but I didn't catch any of her testimony.

The next witness on the stand was Kristina Swanson who had worked for producer Bruce Elgin primarily as a Unit Production Manager. I saw her many times when I worked on the film "Splatter". The prosecution asked about the use of "deal memos" and she said that the use of those is pretty standard. He asked her about her salaries for "The Offering" and "Splatter" and again didn't unearth anything out of the ordinary. I suppose he was hoping that the salaries would be uncommonly high for what the fair market rate would be. She said, if anything, they were on the low side. He confronted her with the fact that the state credited the amount of $77,000 while her actual pay was $28,000. She responded that she was surprised and saddened by this. All in all it was great testimony - for Bruce Elgin's trial. However, since it was instead Tom Wheeler's trial it was a "dollar short and a day late". (When is the prosecution going to realize whose trial it is?)

Then it was James Watson, the Council Bluffs CPA who worked for Wendy Runge during the production of "The Scientist". All I got from the testimony (I was pretty tired so I may have missed something) was that there had been no direct communication with Tom Wheeler. All of the communication had been via email to Tom and to Jim McNulty about how the Film Credits worked.

Finally Tom Wheeler took the stand. Defense attorney, Angela Campbell began by making it clear to Tom that he wasn't required to take the stand and by doing so he could be cross-examined by the prosecution. Wheeler made it clear that he was aware of that and that he didn't have anything to hide.

Questioning began with questions about his background. I found out (there's more detail in that KCCI news story linked to above, by the way) that he grew up in Norwalk, and started off when he went to college trying to learn Engineering but found he wasn't up to that so switched to a liberal arts education finally having a double major in Sociology and Religion. He took a graduate level creative writing class and participated in a fellow student's independent film as an actor. Upon graduating he moved to the southwest and was able to get a Production Assistant job at Fox Animation, 20th Century Fox's feature animation unit. He was able to move up some and ended up in the Editorial Department as a Departmental Assistant reading soundtracks and doing a few other miscellaneous duties. He lost that job when the division was closed. He moved to San Francisco with many of the other people who had worked there and tried to get work with some of the other studios such as Pixar and Warner Brothers but was unable to break in. He was able to get some work from an event company but ultimately couldn't afford to live in the expensive bay area. He ended up packing up and moving back to Iowa. After a few small jobs (motorcycle shop, landscaping, photo department at Walgreens) he found out about the job at the Iowa Film Office being available and got it. It was a substantial increase in pay.

What got established then was what the job was when he started and how it changed once the film incentive bill was passed. The job described to him was a marketing and customer service job which he was able to do. There was no orientation given to him. The closest to training he was given was the employee handbook. In it he found about the prohibition of state employees receiving gifts and he abided by it, even if it did create some awkward moments. The only other information he got was from previous Film Office manager, Steve Schott and what his immediate supervisor could provide. He was basically on his own for most of learning what the job entailed.

His responsibilities involved maintaining the Production Guide, answering questions via phone and email from film people and the general public, putting productions in contact with relevant Iowa people, and working on a location database. When he started major feature productions came to Iowa about once every two years.

The Film Office had a membership in the IMPA (Iowa Motion Picture Association) and the fee was paid for by the state. Tom joined the Iowa Scriptwriters Alliance (ISA) which he paid for himself. The Film Office was part of the International Association of Film Commissioners (which Tom was expected to participate in). He represented the Film Office in visits to IMPA, as well as visits to the Iowa Digital Filmmakers Guild (IDFG) in Iowa City and informed members of things going on in the state and worked to try to get them involved. He attended annual conventions of the Film Commissioners representing Iowa and promoting it as a place to do production.

Then the film incentives came into being...

Having talked to film commission people in other states and seeing what was going on, he was all for some sort of film incentive in Iowa since it would promote what he understood the Film Office's mission, indeed the mission of the whole Iowa Department of Economic Development, - the spending of money in Iowa. He was finding it difficult to compete with other states because they had film incentives and Iowa did not. Opportunities were being lost. However he wasn't the one to bring it up with the legislature. IMPA and other production entities in Iowa were the ones to approach the legislature about this. Tom Wheeler's role in all this was research for whoever asked for it. He looked up what other states were doing, what worked or didn't, what the incentives were, and how various programs were set up.

There were two failed attempts to pass film incentive legislation before it finally passed in 2006.

When Tom Wheeler joined the Film Office it was put in with Tourism. Later, once the film incentives were in place, it became apparent that Tourism wasn't up to the task of handling the business needs of film productions. Wheeler had a bit of a struggle getting the IDED to move it in with business but finally accomplished it.

Tom Wheeler testified that most of the learning of his job was by trial and error. This did not change with the passing of the film incentives. The film incentive bill did not provide any additional funding to provide for the expenses of administering such a program. The budget for the Iowa Film Office did not increase after the Film Incentives passed. In fact the budget was cut drastically.

Tom Wheeler testified that he had no training in either law or accounting. He entered the job with no experience with film tax incentives (in fact, these were new to everyone). He had never seen a film budget nor had any understanding of them. He testified that he relied heavily on the expertise of others within the IDED and other areas of state government such as Revenue and got as much help as he was able but many would only go so far and left him on his own after a certain point. He testified that at meetings about interpreting the film incentive statutes he was the least informed of everyone. He testified that he had only a "layman's understanding" of much of what he was confronted with.

When the film incentives passed, one of the things about them is that there were retroactive. There was no time provided to develop the proper materials (forms, applications, etc.) after they were passed and consequently for some films already shot within where the incentives were retroactive to the materials had to be improvised. Tom Wheeler had some help developing the rules and forms but much of it was left to him.

After the incentives passed his phone calls and emails increased exponentially. He was only given a limited amount of space on IDED servers to store Film Office files and this was soon exceeded. He at one point had to purchase with his own money an external hard drive to back up his files. It had a half terabyte capacity and that wasn't even enough. His email inbox, in the screenshot shown at the trial, showed over 11,000 messages.

It was established during testimony that Tom Wheeler made a great effort to keep records on everything and was constantly developing systems to keep track of the ever mounting volume of data. And this was while everything kept being changed. The content of applications were constantly updated as new information had to be adjusted for. Contracts on the other hand were not to changed more than once a year. The reason given by those who were involved with contracts at IDED was so that all the changes could be made at once. Of course, if you look at things, this was a problem because if something was wrong it would have to wait up to a year to be corrected. (The cars would be such an item.)

Tom Wheeler testified that it wasn't long before he went into reactive mode - that is, reacting to the current crisis rather than planning ahead - putting out fires, in other words. He testified that interpreting the statutes and administering the incentive program seemed straight forward at the beginning but turned out to be anything but when he actually did it. The program never stopped evolving even after he was fired.

The last of the testimony was truly breathtaking - a virtual descent into Wonderland. As mentioned before everything seemed straight forward at first as far as how the law was written and how the program was to be administered. That is until you get lawyers involved with it. The trouble started with "Peacock" with the term "Iowa resident" (if I remember what I heard correctly. The lawyers for that film told Tom Wheeler that programs in other states were interpreting the meaning of the term differently than how Tom understood it and was presenting it to them. Tom described how he had literally run to all of his various supervisors and told them of his error and how he had said they could do what they wished with him (fire him) if they needed to but that they needed to correct the problem first. The problem was one that could have cost the states millions in a lawsuit. During this part of the testimony it was mentioned that the terms "Iowa based company", "resident", "residency", "investor", "financial", "participant", "project", "qualified expenditure", - even "tax payer" were not defined in the law and were open to differing interpretations. Leave it to the lawyers! Tom Wheeler was definitely in over his head in all this. Who wouldn't be in such a crazy "Alice in Wonderland" situation?

From KCCI TV-8 In Des Moines

2011-08-29T14:31:00.000-07:00

DES MOINES, Iowa -- The former director of the Iowa Film Office is taking the witness stand in his trial in a Polk County courtroom Monday.

Former Director Tom Wheeler is on trial, charged with several counts of fraud, misconduct in office and conspiracy. Wheeler has pleaded not guilty to the charges.

Wheeler took the stand at 11 a.m. He said he has a bachelor's degree in Sociology and Religion. He said he hasn't taken accounting or law classes. He did take a graduate level creative writing class.

"I was not a very good student," said Wheeler.

He went on to talk about his job experience before taking the Film Office director's job, including working for a landscaping company, at a Bruegger's store and at a Walgreens in the photo department. He said then he applied for the job at the Iowa Film Office.

He interviewed with Nancy Landis, Mary Lawyer and Mike Blouin. He was offer the job and started working in January 2004.

Wheeler said the job was described to him as a marketing and customer service position. At the time he was hired, he said he was capable and qualified to do the job.

Wheeler said state employees were not allowed to take gifts, food or beverages. Wheeler said he never did.

He was not given any additional training for his job at the Iowa Film Office.

"I thought I knew what I was getting into," said Wheeler.

Wheeler said he answered phone calls and emails about films, maintained a production guide and provided photographs or took photographs of locations for movie shoots.

His salary was $50,000 plus benefits.

He said the position was by far the best job he had ever had -- paywise.

"By and large, I thought I knew what to do on a day-to-day basis," said Wheeler.

Wheeler said he learned how to do things by "trial and error."

Wheeler said his job was evolving on an ongoing basis. Then in 2007 with the passing of film tax credit law, his job changed dramatically.

Wheeler said he never endorsed any business. He would refer filmmakers to the production guide if there was more than one business in a particular category.

"Were you ready for a tax incentive bill to pass?" asked the defense attorney.

"In hindsight, no," said Wheeler.

Wheeler said he had no accounting experience, no history with tax credits, no law experience, no administrative experience and no lobbying experience.

Wheeler said after the film tax credits passed, his budget shrank. Wheeler also said he was denied any additional staff to help him.

He said he sought help to understand the tax credits.

"I was the least experienced person in the room, maybe in the building on that subject," said Wheeler.

Before being hired, he said he had never seen a film budget. He wasn't given any training in film budget accounting. He learned about film accounting from the filmmakers and the people who were developing budgets for films.

He said at first the film tax credit law seemed pretty straight forward.

"I was terribly wrong," Wheeler said.

Wheeler said the law was confusing. He said he did his best to figure it out.

"Did anyone ever tell you had it all wrong?" asked the defense attorney.

"No," Wheeler said.

Wheeler said the tax credit law was also retroactive to Jan. 1, so the demand for the credits was immediate. He said he had no time to establish rules, paperwork or promotions. He received more than 10,000 emails and used Outlook as a file cabinet. He also had hundreds of folders and files on his computer.

Earlier Monday...

Earlier on Monday morning, Kristina Swanson took the stand. She worked on "Splatter" and "The Offering" with Bruce Elgin. She was told she would not be paid until tax credits were cashed.

Her contract for "Splatter" was that she would be paid $28,000 for her work. If the film was sold she would get $148,000. She thought the low number was low. She said the high number was more in line with what she would be paid in Los Angeles.

She said she ended up being paid $28,000 plus reimbursements.

The prosecution said Iowa taxpayers reimbursed Elgin more than $74,000 for Swanson's services.

Swanson said she was surprised to hear the numbers, a little confused and sad.

Her contract for "The Offering" was that she would be paid $11,000 to $55,000 for her work.

The prosecution said Bruce Elgin received $27,500 in taxpayer money to pay her. She received $11,000.

She said if she thought anything wrong was going on, she did not tell Wheeler.

Look for more trial coverage here on KCCI.com and on KCCI-TV.

Thursday Testimony

The defense called four witnesses Thursday, three of whom worked closely with Wheeler in the Department of Economic Development including the man who hired him.

Anthony Gudas, owner of a company that pre-funds state tax incentives for filmmakers, took the stand Thursday morning.

"I thought Tom was honest. I thought he was overwhelmed and probably lacked the experience necessary to run a successful film program," said Gudas. "It also caused, shall I say, earthquakes throughout the industry in the business that I'm in and probably a lot of projects did not get made at first because they were wondering if there would be a domino effect from other states."

Gudas said Iowa's tax credit program was one of the best in the nation, but the legislation was poorly written and the program lacked structure.

He testified that he has more than $8 million in pre-funded tax credits trapped in the state as a result of contracts not being honored after the program was suspended.

He also said he believed Wheeler was overwhelmed but under qualified for the job of director.

Mike Blouin, the man who hired Wheeler for the position agreed with Gudas' testimony when he took the stand later in the day.

Blouin was the director of the Iowa Department of Economic Development then when he hired Wheeler, which was before the Film Tax Credit program was enacted.

"I don't think Tom was experienced or skilled or capable of handling the kind of program that would have been put on if the program had been proposed when I was director. As such, I may not well have even supported it. There was no staff, no budget, no account or legal help added as a result of it," said Blouin.

There will be no testimony Friday. The trial is expected to resume on Monday.

Wednesday Testimony

Wednesday morning, Wheeler's older brother, Steven, continued his testimony. Defense attorney Angela Campbell asked if Steven had seen any fancy cars, boats or anything big purchased by Tom Wheeler.

"Nothing," Steven Wheeler replied.

He was followed by Scott Seyman, who worked with Wheeler at Fox Animation Studios in Phoenix.

Seyman described Wheeler as a "Hard worker, eager to please. Always ready to take on more responsibilities. Just a real go-getter. Kind of a 'Type A' kind of guy."

Former tourisim director for the Iowa Department of Economic Development, Nancy Landess, also provided testimony.

She said Wheeler was hired in a marketing position to promote filming in Iowa. She said that Wheeler had performance goals that he was expected to meet for the number of films he brought to Iowa.

In December 2007, the goal was two films and Landess asked if he had met that goal.

"Would it be fair to say then ma'am that you were trying to encourage Tom Wheeler to increase the number of films that were used in the program?" said Campbell.

"Well certainly that was the goal to increase the number that were using the program," said Landess.

Mike Tramontina served as Director of the Iowa Dept of Economic when Wheeler was in charge of the Iowa Film Office. He took the witness stand on Wednesday morning.

Tramontina said he doubts Wheeler receive training on tax credits as an employee in the tourism department where he worked before joining the film office. He said he was in contact with Wheeler during the entire process and that Wheeler was not doing it by himself.

Campbell asked if Wheeler was seeking assistance and guidance from his supervisors.

Tramontina said Wheeler was on an irregular basis. Tom was not as communicative with his supervisors as most employees are and he probably asked fewer questions of his supervisors, fewer things came up to me than typically other people did, said Tramontina.

Tramontina said it was the general counsel and office of the attorney general's job to interpret law and statutes for the film office.
[Runge on witness stand.]
Runge on witness stand.

Minnesota firmmaker Wendy Runge took the stand in the afternoon. Runge pleaded guilty to first-degree fraudulent practice concerning the film projects "Run" and "Forever." She has been cooperating with the Film Office investigation.

Runge became emotional when she talked about her guilty plea and her pending appeal. She said she never had an agreement with Wheeler to defraud the state.

Runge said that she believed Wheeler did the job to the best of his ability.

She said Wheeler often said he had to ask, had to find out what the policy was and that he would get back to her, so often he would not answer directly and then get back at some point and time or maybe an answer never came from his superiors.

Read more: http://www.kcci.com/news/28961656/detail.html#ixzz1WSKMo8z5

Note From David B. Wheeler

2011-08-28T05:29:00.000-07:00

Film Friends - It wasn't reported in the news but late Thursday afternoon the former Director of the Legal and Compliance Department and team for IDED, Melaine Johnson, testified for the defense. The legal and compliance department's role is to assist all programs at IDED to manage contracts (legal), visiting film sets/filming sites to ensure equipment is being used (compliance) as registration/co...ntracts provided, the final amounts of tax credit awards are correct (legal) and the obligations made by movie producers are met (compliance). Much of her knowledge is attorney client privileged but it was very significant that she testified when she suggested IDED Legal and Compliance Department (with more than 15 staff) begin to provide their services and expertise for the Film Office in 2008, Director of IDED Mike Tramontina told her "No." Why wasn't this reported in the press? The Director of the IDED told the legal and compliance department no to assisting the Iowa Film Office. A very significant statement by the IDED's former lawyer and clearly part of the problem with the IFO. Melaine was unfairly thrown under the bus and fired as well.

Indiewire.com Post by Ted Hope

2011-08-28T05:27:00.000-07:00

Where The Tax Credits For Film Are In America These Days

Tax credits and subsidies for the film business are job stimulus. As a producer asked to ALWAYS squeeze a buck, I simply won’t shoot my films where the tax credits are not. Luckily I live in the wise and wonderful state of New York, that has one of the best tax subsidies for film and television any where in the world, not to mention the BEST talent pool in the universe too.

But it’s not the only place to go. The Incentives Office offers a clear MUST READ review of the state of the union of where to go for how much.

I received this email from The Incentives Office today. You should visit their site to receive such emails yourself.

Although many states have curtailed or terminated their incentives programs, others have expanded or enhanced their programs. There is still a substantial amount of money available - to find it:

THE INCENTIVES OFFICE TELLS YOU WHERE TO GO…

Alabama - $6 million available now, with new funds will be available on October 1st. $10 million annual cap.

Alaska - $50 million is available. Alaska has no caps on talent or projects, but requires a CPA audit to sell their 30-44% credits.

Colorado - $500,000 remains for their 10% rebate.

Connecticut - no annual cap. Regulations have tightened up for this (up to) 30% transferable credit.

Florida - (film only - see below for television). Only Florida resident cast and crew qualify, plus FL goods and services.

Georgia - 20% transferable credit, plus 10% uplift for logo (totaling 30%), requires audit/tax return. New sound stages, lots of post facilities. No annual ceiling.

Hawaii - refundable credit of 15% to 20%, requires a tax return. No annual cap.

Illinois - only resident cast and crew qualify, but Chicago is a major production center. Transferable credit of 30%. $100,000 per hire cap, but no annual ceiling.

Indiana - $2.5 million remains for the remainder of this calendar year.

Louisiana - top choice of producers, transferable credit of 30%, plus 5% bump for resident labor. The state redeems credits at 85 cents after CPA audit, or they can be sold (brokered). Many films now in prep or pre-production, so crew is getting strained. No annual ceiling, and three great stages.

Massachusetts - 25% transferable credit; state redeems at 90 cents. No caps or ceiling, and the credits are easy to sell after CPA audit.

Mississippi - a rebate of 25% for materials and non-resident crew, 30% for resident crew, $1M per hire cap. “The Help” was shot in Mississippi. Not a lot of crew depth, but growing. New sound stage in Canton. Costs are low, and the state is eager for production. $18 million is available.

Montana - refundable credit of 9% to 14%. No annual cap.

New Jersey - $14 million available, but half of this will be gone very soon, as earlier shows complete their submissions. 20% transferable credit, sellable after the CPA audit.

New Mexico - annual allocation is $50 million, for this 25% refundable credit which requires a NM tax return. First come, first served; if funds not available when you apply, you wait a year. Depending on total amount, credits awarded over 1, 2 or 3 years.

New York - fiscal year started July 1st, so new funds are available. Below-the-line credit of 30%, payable over 1-3 years with filing of NY state tax returns.

North Carolina - refundable credit of 25%, $1M per hire cap, and project cap of $7.5M. NC requires a tax return. No annual ceiling.

Pennsylvania - Some funds remain, but not for long. However, applications are stil being accepted, as films may drop out of the queue, freeing up funds for new projects.

South Carolina - $14 million currently available for their 10% to 30% rebate.

Texas - The incentive has now been raised to 15% for video game production. The previous rate was 5%. Only Texas resident cast and crew qualify, plus TX goods and services.

Utah - $11 million of fully refundable credits at 25% (with tax return), $3 million for 25% cash rebates (up to $500,000 per project).

West Virginia - $10 million annual cap, $10 million available. 27-31% credits.

AND WHERE NOT TO GO (FOR NOW)

Arizona - program was allowed to sunset, new legislation was defeated.
Florida(television only) - funds for the TV queue are exhausted, and without new legislation, new application will not be accepted.
Missouri - the film commission was not funded.

Idaho - program is not funded.

Iowa - program has been terminated.

Ohio - all funds gone until next fiscal year. Applications are being accepted in case something drops out of the queue

Oklahoma - no funds available until fiscal 2013, which starts July 1, 2012. Applications will be accepted beginning January 1, 2012.

Oregon - a good program, but they are out of funds until July 1, 2012.

Washington - program was allowed to sunset.

Wisconsin - allocation of $500,000 per year.

OTHER LOCATIONS TO CONSIDER
California - all funds allocated. Applications will be accepted starting June 1, 2012, for the next fiscal year, which starts July 1, 2012.
Michigan - Funds currently exhausted, but $25 million via a grant becomes available October 1, 2011. $2M cap per hire, and qualifying rates vary from 30-42%.
Minnesota - $1 million has been allocated; please contact the commissioner for details. Rules and requirements will change - no additional information is available.

Wendol Jarvis, The Man With A Plan

2011-08-27T04:47:00.000-07:00

Since the collapse of the film program in Iowa, former IFO director Wendol Jarvis has made countless trips from his home in Kansas City to Des Moines in his tireless effort to redesign the Iowa Film Office and laws relating to film production. This is all on his own dime and time. I know that there have been efforts to control what used to be the Iowa Film Production Guide by various groups and individuals, but I think it should all be under the IFO. There has even been talk of taking control of the IFO by outside entities. I personally have seen Wendol's plans for improving the Iowa Film Office, including charts and graphs and pages of brilliant details and hope Wendol will prevail. His return will mean he will rekindle important and extensive industry connections, which is essential for successfully relaunching the IFO and rebuilding trust and interest on the part of producers.

Tom Wheeler and the "Incompentence" Issue

2011-08-26T08:04:00.000-07:00

Two articles in the last two days have brought up the issue of incompetence in regards to Tom Wheeler:

Former IDED Chief: Wheeler wasn't qualified to run incentive program
http://blogs.desmoinesregister.com/dmr/index.php/2011/08/25/former-ided-chief-wheeler-wasnt-qualified-to-run-incentive-program/

Our View - Dialing back the cinematic vision for Iowa
http://www.press-citizen.com/article/20110826/OPINION03/108260303/Our-View-Dialing-back-cinematic-vision-Iowa?odyssey=nav|head

The first is about Mike Blouin, Wheeler's first boss at the IDED being on the stand as a witness and the other is about the Landlocked Film Festival going on at the same time as the trial. Both bring up the idea that Tom Wheeler was incompetent in the most unflattering terms. Let's take a look at the idea of incompetence and see what it really means and see who really deserves the term.

When you look at State Film Tax Credits, it is a relatively new thing - certainly for Iowa. They just have not been around that long and the people who would already have most of the experience are already working - for OTHER states. When something is new, everyone in it is "incompetent". When airplanes were first invented, you can bet that the Wright brothers didn't have a lot of flight hours under their belt when they flew that first plane at Kitty Hawk.

It's well established that Tom Wheeler did not have training in legal contracts or in accounting. There were others at the IDED and in other areas of state government who did and didn't exercise their responsibilities. It is to those people who the term incompetence, in the worst sense, should be applied. And the term should be applied most of all to former governor Chet Culver. From evidence brought up at the trial I could see that Tom Wheeler and to some degree his bosses WERE trying to close the loopholes and make the program work as intended but it was Culver who decided to freeze the whole thing forever instead of allow it to be fixed and decided to turn it into a political football.

I've noticed that there have been a number of people who wish to throw Tom Wheeler under the bus. We've been experiencing this with this trial where the operative word is "persecution" not "prosecution" and I've noticed it in our own film community, such as there is of it. I've heard it mentioned that there was a lot more going on as far as abuses that is being reported with an evil eye directed toward Wheeler. So far at this trial most of the abuses have been those we've known about. At the emergency IMPA meeting I attended there certainly seemed to be a willingness to make Tom Wheeler the sacrificial goat from some parties there. It is just so easy to point fingers when you don't know the facts.

Here is what I believe, given the facts I am aware of:

Tom Wheeler was in over his head and did not have training in legal contracts or in accounting. There was way too much paperwork to sort through, even if he would have had those skills. He wasn't receiving the full support he needed with either additional qualified staffing or support from others in state government. No efforts were made to understand what was going on in his department by those whose responsibility is was to know - his bosses. They just left everything to Tom and forgot about it. ("Ignorance is bliss.") And finally you had someone deciding the fate of the whole thing who knew next to nothing about it and made no effort to - Governor Chester Culver and the results were similar to letting loose a monkey with a hammer into a china shop.

Brother: Tom Wheeler wanted to leave Iowa Film Office

2011-08-24T05:58:00.000-07:00

by Rod Boshart/SourceMedia News for the Cedar Rapids Gazette, August 23, 2011, 5:59 pm

DES MOINES – David Wheeler testified Tuesday he advised his younger brother in 2009 to “hold on” as manager of Iowa’s Film Office given the tough economy even though he was swamped with what defense attorneys are portraying as a burgeoning though poorly structured state tax-credit program for which he was not adequately trained or staffed to run.
“I remember specifically writing to him: ‘Tom, it’s tough out there. I would hold on.’ In retrospect, I wish he wouldn’t have taken my advice,” he told a nine-woman, three-man Polk County jury during the second week of Tom Wheeler’s trial on charges of felony misconduct in office, first-degree fraudulent practices and conspiracy related to his work at the film office prior to his September 2009 termination.
David Wheeler, a Norwalk native who now lives in Spruce Pine, N.C., and operates an event management company, said he had several “chats” with his brother about leaving the post in the Iowa Department of Economic Development to pursue other options, but he told Tom to keep his job for the time being due to the tight employment market.
“He was very upset. He was working his tail off,” said David Wheeler, who struggled to keep his composure during about four minutes of testimony. “Our father had died the year before and he never really had time to deal with that, and the bottom fell out and here we are today.”
David Wheeler told jurors he is paying for his brother’s defense because “Tom’s been out of work and he’s got nothing left.”
The testimony came on a day when prosecutors rested their case after showing a brief video of Tom Wheeler making a presentation to California moviemakers touting Iowa’s film tax credit program as half-price filmmaking that provided a 25 percent tax credit for production expenditures made in Iowa and a 25 percent tax credit for investors for projects that spent at least $100,000 in Iowa.
Prosecutors have painted Wheeler as “an inside man” who allegedly helped filmmakers fraudulently obtain state tax credits for bogus claims, inflated expenses and unqualified purchases. They contend he used his position in the film office to help filmmakers improperly benefit from the tax credit program by knowingly altering and substituting public documents, and by knowingly approved false and inflated expenses submitted to the film office.
Defense attorney Angela Campbell worked to dispel that image by calling witnesses who praised the former film office manager as friendly, professional, ethical and honest.
“I felt that he was a straight forward, honest guy,” said Joel Sadilek, a former Cedar Rapids resident who works as a movie line producer in California.
Sadilek said Wheeler never suggested anything untoward to skirt the program’s rules during the two films he worked on in Iowa, but he conceded during cross examination by prosecutors that some of the rental costs approved by Wheeler for other projects that qualified for tax credits were excessive – examples such as $450 to rent two shovels for six weeks or $250 for a rake.
Among the six defense witnesses to testify Tuesday was Donald Schnitker, a special agent of the Iowa Division of Criminal Investigation, who helped probe the film office operations after former Gov. Chet Culver suspended the tax-credit program when allegations surfaced of lax oversight, sloppy bookkeeping and questionable expenditures that included two luxury vehicles that were taken to California for personal use. After the scandal broke, six people lost their jobs within the economic development agency, including Wheeler.
Campbell produced a bank statement seized by DCI agents and asked Schnitker: “Sir, can you tell me where in that exhibit it demonstrates that Mr. Wheeler was getting paid on the side, getting a bribe or otherwise improperly benefitting from the film tax credit program?”
“There’s no evidence of that in this bank account,” Schnitker replied. He also said DCI agents were unable to locate any other bank accounts held by Wheeler.
“So, either Tom Wheeler is so talented at hiding bank accounts or he doesn’t have another one,” Campbell noted.
“Correct,” the DCI agent said.
Campbell also talked about 32 boxes of materials investigators seized from the film office and asked Schnitker: “Sir, can you tell me where in those boxes you found evidence that Mr. Wheeler was improperly benefitting from his work at the Iowa Film Office?”
“Monetarily benefitting?” he replied.
“Yes,” Campbell said.
“That wasn’t found,” Schnitker testified.

Gene & Jay Go To The Wheeler Film Office Trial

2011-08-23T17:55:00.001-07:00

Gino and Jay Attend the Tom Wheeler Trial

I am so glad Jay and I went to witness Tom Wheeler's trial today. Tom was glad to see our familiar faces. I know we cheered him up a bit by showing our support. We sat in the front row, next to Tom's brother, David. Behind us sat Tom's wife and Des Moines Register reporter, Lee Rood, who has done an excellent job covering the film crisis since it all began.

Before entering the courtroom at the Polk County Court House, we spoke with Cedar Rapids native, Joel Sadilek, a movie line producer who lives in Burbank, California. Joel's Iowa projects include "Sixteen to Life", and "The Experiment". Joel was on hand to offer testimony for the defense because he said he felt compelled to do so, feeling that Tom is an honest man who was overwhelmed with an impossible amount of work when he was the director of the Iowa Film Office.

Tom's attorney, Angela Campbell, opened her remarks by saying there was not a sliver of evidence that Wheeler ever intended to commit a crime or had any criminal intent to do wrong and asked for an acquittal. The prosecutor, attorney Thomas H. Miller, asserted that Tom "looked the other way" and "aided and abetted fraud and conspiracy".

Wheeler's other attorney, Gordon Fisher, said the Iowa film laws are vague and impossible to understand and interpret.

An Iowa Department of Revenue agent, Jim McNulty, took the stand and briefly answered questions regarding the meaning of "above the line" as it relates to qualifying for tax credits. If I understand it correctly, "above the line" refers to expenses for the director, producer, other top crew and top actors. Anything below the line is where tax credits would apply.

When asked what "line producer" means, Joel Sadilek said a line producer creates budgets based on scripts and manages the film's budget, including money for crew and below the line actors, and more. Joel said movie budgets almost always change, mostly going higher. He said film budgets are generally highly educated guesses. He said a movie's pre-production budget fluctuates.

Sadilek discussed the idea of line producers being bonded, and that being bonded means being worthy of trust by movie investors. Joel said bonding companies are similar to insurance companies who protect investors' money and assure them that a project will be completed no matter what.

During the time movies were being made in Iowa, being bonded was not required of line producers but should have been, according to Sadilek.

When asked what projects he worked on in Iowa, Joel said he produced "Duck Farm Number13" (later changed to "Sixteen to Life", as well as the movie "The Experiment". Wheeler was one of his very first contacts before these movies got under way. He said Wheeler was very friendly and helpful, working far beyond normal state employee hours, and that Wheeler "wanted to do things right". Also, according to Sadilek, Wheeler never asked for a kickback or even a free lunch. The producer said his business is able to continue because of referrals, accounting for 99% of his work.

He pointed out that the union, IATSE, sets rates for film crews and that there are no maximum rates. Also, Joel said that he would know what things would cost, more so than Tom could. "Deal Memos" were discussed by attorney Campbell, and Sadilek said such memos were essential on a film, as they detailed terms of compensation and other important details between a worker and the production company. "Deferred Compensation" was another topic brought up by Ms. Campbell, where actors and workers work for nothing and get paid later.

Joel said a "contingency" is normal and adds ten per cent to a movie's budget and that bonding companies actually require it. Campbell said Wheeler had been criticized for changing a film's budget, to which Joel said budgets are estimates that often do change.

Campbell asked why a movie company would rent rather than buy movie equipment and Joel said it's cheaper to do so, and that by renting expensive equipment you get tech support when equipment breaks. He said in one film they had to go through five Red One cameras and tech support came in very handy.

Attorney Campbell asked Joel is he kept track of all the details in a movie, such as all of the many receipts generated and he said "no way!". She asked if he would be able to manage the receipts of twenty-two films in two years (what Wheeler was expected to do) and the producer said there would simply not possibly be enough time in a day. He said rental houses keep records of "every little screw", implying that such details would require a full staff to scrutinize.

Campbell asked him if Tom ever discussed how to sneak "under the radar", and answered by saying "Tom's not that way and neither am I", adding that Tom talked about how to make film laws in Iowa better.

Prosecutor Miller asked Sadilek how a movie budget comes about and was told that "Movie Magic" software was a popular industry template used by many movie producers. Miller began a series of questions in what I perceived to be his attempt to trip him up, such as what per cent of a movie budget does a camera take, and what about a grip, a gaffer, and more. Sadilek calmly and clearly stated that such answers are difficult without specifying in detail what type of camera, what type of lenses, et cetera.

Miller then asked him is he'd rent a ladder for $900, or a shovel or push broom for big prices. Joel simply said no. When asked if he'd rent or buy a vehicle, Joel said directors sometimes ask for cars if they can be used in a film, such as for a "picture car", a car used in a scene. When asked if buying a luxury car and giving it away would be good Joel said that it would be between the director and producer. Miller then asked if getting five dollars for about two dollars in tax credits is justifiable, Joel said "no".

Campbell discussed how crews can receive higher pay when the number of available crew is thin, owing to many movies being produced in one area. Sadilek said the union, IATSE, negotiates the pay for crews and that costs can go up when available workers are scarce. He said about 50% of a movie budget is for labor and 25-30% is for equipment.

Prosecutor Miller asked Sadilek how much it would cost to rent a "rolling turtle", his obvious attempt to make Joel look stupid. Joel said workers have lots of names within their own trades for various equipment and that he didn't know what such a device was. I just looked it up and it appears that this is a type of C-stand.

Sadilek was brilliant. He sounded very expert in his field and delivered his answers calmly and thoroughly, citing specific details often.

My impression: the prosecution is struggling to make Wheeler look bad and is failing because Wheeler did not gain in any way from all of this. Wheeler's attorneys are equipped with a massive amount of accounts, facts, and figures, all solid ammunition in their arsenal for use in defending a very nice man who got thrown under the bus while his superiors were only fired, without even a hand being slapped.

Gene L. Hamilton, SAG

Interview with Kent Newman from the weekend

2011-08-23T15:15:00.000-07:00

There was an interesting interview with Kent Newman, the former president of the Iowa Motion Picture Association (Jay Villwock is the new one) about the current state of Iowa's film industry. It was on KCCI-TV's Newsmakers program.

Here's a link to Part One of the interview:

http://www.youtube.com/watch?v=BDUK1Q6HK7M

and here is link to Part Two:

http://www.youtube.com/watch?v=AyO8MxEzQmA

An Afternoon at the Tom Wheeler Trial

2011-08-22T16:43:00.000-07:00

Since I had the day off today, I went down with Jay Villwock to the Tom Wheeler trial. We were able to join the proceedings in the afternoon.

The defense attorney for Tom Wheeler was cross-examining Vince Lintz, the former Deputy Director of the Iowa Department of Economic Development (IDED). From the way the questioning was going, I had guessed that it was the defense's witness, not the prosecutions because for the most part the answers couldn't have been more favorable to the defense's case.

The judge from what I could tell appeared to be the same one who had presided over the Wendy Runge trial. I got a vibe from his of being fair and impartial and that his mind wasn't made up in support of either side. Wheeler's attorney, Angela Campbell, was a very sharp lawyer during what I saw and there was a lot more action during this portion of the trial than I had expected.

The main thing that was established through the questioning was that Wheeler was overwhelmed and overworked and that the people above him at the IDED were in many ways clueless or asleep at the wheel. Many examples of what he had to do, what he was expected to do, and what kind of support he received from his higher-ups was given with thorough, respectful questions asked to confirm things.

Even early in the film program, Tom Wheeler was overwhelmed and needed assistance but was not provided the additional staff that was needed. And then the onslaught happened after a cap was set and a total of 122 applications were submitted to the office. As an example of the number of documents required for just one film to establish expenses three bankers boxes of receipts were brought onto the courtroom floor. And this was just for one average film. It was emphasized how long it would take to go through all of this and how unreasonable it was to expect one person to do this alone. (I recall it took a team at the Attorney General's Office at least 6 months before they could even start to bring any charges.) There was mention of phone voice message boxes being full and unanswered, both for Tom's office and cell phone (that's a LOT of messages). Wheeler's attorney recounted all of the various jobs he was supposed to do and it sounded like enough for at least 3 people to keep busy to me. Practically every question the defense attorney asked about responsibilities ended with the answer "Tom".

There was evidence presented to show that Tom Wheeler was not the "inside man" the prosecution has claimed him to be but rather that he was making strong efforts to tighten the program and to identify and eliminate the loopholes. It was established that Tom tried to work with people to make changes in the rules to make the program run better and that he worked with legislators. It also established that he did not write the law. In fact it was made clear that he had neither the legal training nor the training in accounting that was needed for what he was asked to do.

The issues of the cars was brought up. You remember those, don't you? The Land Rover and the Mercedes - the vehicles that started this whole scandal? It turns out that there was nothing in the law as it had been written nor in the contracts made with producers that excluded these purchases - the ones that got the press and the Culver administration into such an uproar. It was shown beyond a doubt that leasing and purchasing of motor vehicles was allowed under the terms of the law and the contracts. There was no mention of how they were to be used or what kind of vehicles could be purchased. Have you ever wondered why no charges have ever been brought up concerning these vehicles? If you didn't before, you do now.

Toward the end of the session the prosecution tried to counter some of the arguments of the defense. A job review form was exhibited that showed that Tom Wheeler had not filled in an area where it asked if he needed additional staff to do his job. After the evidence in emails from earlier in the program, this omission didn't seem to carry as much weight. Given the work load it certainly seems possible that Wheeler could have either forgotten to fill it in or was at the point of throwing up his hands and not bothering because of the futility of asking. That is at least my impression.

I'm sure I've probably have left some things out from the afternoon's proceedings but that's the gist of a lot of it. Tom Wheeler's trial is set for three weeks and this is the second week. I'll be off work again next Monday and will try to attend and see what I can give as an eye witness report.

-Dave

Crap Should Flow UPHILL

2011-08-20T05:53:00.000-07:00

When I saw the latest IFO trial report on TV last night and saw one of the former IDED big shots testifying I got pissed because I believe HE and others are at fault for not coming to Wheeler's aid when he needed it. And pissed, too, that those jokers just lost their lucrative jobs. I wonder if they still got their benefits and even severance pay.

Film-Related Event Tomorrow In Parkersburg

2011-08-18T15:39:00.001-07:00

This Friday, tomorrow, there will be an event tied to the horrible events that took place in Parkersburg, Iowa: the devastating tornado and the murder of beloved Parkersburg coach Ed Thomas. This event is a book signing by the author of "The Sacred Acre", which relates to these events. Tony Wilson, a producer of a motion picture made in Iowa, "The Final Season", has acquired the rights to make a film based on this book. Tony is with the West Des Moines production company, Applied Art. Former Iowa Film Office head Wendol Jarvis will be on hard, as will Governor Branstad and Lt. Governor Reynolds. Iowa Senator Grassley will also be there. This will all occur in the Parkersburg High School Gymnasium, beginning at 6:30 p.m.

I Agree With Dave Thrasher!!

2011-08-18T09:01:00.000-07:00

David Thrasher (pictured)

Once again they get it wrong. The tax incentives weren't used to purchase the vehicles. The vehicles were purchased with the production's money and these were turned in as qualified expenses for which tax credits were awarded. There was no check ever written by the state, only a certificate toward money off taxes which the producer could sell to someone else so they could take money off THEIR taxes.

Also, there's never been any prosecutions in regard to the Range Rover or the Mercedes because the law was written so loosely that there was nothing in it to say that such purchases weren't allowed.

Even at this stage of Tom Wheeler's trial there is evidence that those above him are trying to make him the scapegoat and throw him under the bus to divert attention from their own negligence.

from Des Moines Register.Com

2011-08-17T16:18:00.000-07:00

http://www.gannettonline.com/external/scripts/momslikeme/?siteid=6171

A
A

Written by
LEE ROOD

Two of the first witnesses in Tom Wheeler’s trial this morning warned the former film chief that filmmakers were were abusing the new film tax incentive program passed by the Legislature in 2007.

Wheeler faces multiple felony charges for misconduct in office, fraudulent practices and conspiracy. Hired to run Iowa’s one-person film office in 2004, he has been accused by state prosecutors of being an “inside guy” for those who abused the program.

Steve Faust, an Urbandale man who worked on several Iowa movies after the incentive was created, testified that he warned Wheeler director Bruce Isacson was drving a Land Rover on the set of “South Dakota” that did not appear to be used in the film.

Faust said he had heard it was being loaded up and shipped back to California.

“I went and said, ‘Tom, do I need to talk to you or someone above you?” he said.
Wheeler, Faust said, told him he would take care of the problem. He also told Faust to not tell higher-ups because he could get fired.

But Faust alo said Wheeler was respected by the people he worked with in the industry and acknowledged Wheeler might have overlooked things because the program was growing so quickly.

Faust said he had no idea whether the law drafted by legislators or rules put into place afterward by the Iowa Department of Economic Development allowed for the purchase of luxury vehicles.

Also this morning, Doug Miller, one of the state’s most experienced film and production professionals, said he warned Wheeler early of potential problems with part of the tax incentive that offered investors in a film a 25 percent tax credit.
Miller, co-founder of Great River Studios in the Quad Cities, said he worked extensively with Wheeler and other industry-backers to create incentives to lure movies to Iowa. He said he knew investor enticements could prove a problem in an industry known to have its share of swindlers, but organizers proceeded with the incentive anyway.

Miller was also expected to testify today that he told Wheeler one movie-maker changed his name after being convicted of bank fraud, and that Wheeler allowed that moviemaker to proceed with a project anyway under a different name.

The film scandal erupted in late summer 2009 after a preliminary audit at the Iowa Department of Economic Development revealed widespread mismanagement and abuses.

The state has doled out $1.5 million in court settlements so far, convicted a handful of filmmakers for trying to defraud taxpayers and fired several state workers.

The incentive program has been suspended until 2013.

from WWW.Algona.com

2011-08-17T16:15:00.000-07:00

Algona film project: take three

Tietz hopes third time is the charm for stalled project
By Nathan Countryman, Assistant editor
Published: Thursday, August 11, 2011 10:03 AM CDT

ALGONA — Wendol Jarvis, former manager of the Iowa Film Office, and screenwriter, producer and director Don Thompson visited the Camp Algona P.O.W. Museum on Thursday, Aug. 4.

The duo were visiting the museum to see if a stalled film project can proceed on the Camp Algona P.O.W. that was established during World War II.

The film project originally was being promoted by Larry Webster and Media Majik. The film was to be based off of Don Tietz’s 2007 biographical novel, One American Dreamer, written by Alice C. Bateman.

In 2010 Tietz sued Webster and this year won a judgement default after Webster refused to appear for trial conference calls.

After suing Webster, Tietz brought in a new executive producer, Raw Leiba, director Robert Stock and screenwriters Liz Finn-Arnold and Sandra Longo, but the project stalled.

Jarvis is working with the film on behalf of Gov. Terry Branstad on a volunteer basis to try and reestablish a film office in Iowa following the film scandal.

“I’m originally from Iowa, and am good friends with Don Thompson and Don Tietz,” Jarvis said. “Right now we’re doing research in order to help us find what the story would be of the museum and work on developing a screenplay. The screenplay would be the first baby step towards the filmmaking process.”

Jarvis created the Iowa Film Office in 1984 and left the position in 2002 after budget cuts forced him to lay off two assistants.

Jarvis is originally from Centerville and has ties with the Algona area. His wife is originally from the Emmetsburg area.

According to Jarvis, the soonest filming could begin on any project would be in 2012.

“It is real important that we understand what the story is and how we can relate that to what was happening during World War II.

Jarvis brought on director, producer and screenwriter Don Thompson to give Don Tietz and Jarvis advice on how the project should proceed.

Thompson has worked on numerous films, including “Blood on the Mountain,” “Life Flight,” and “Paradise Trail.”

“I’ve been interested in film since I was a kid,” Thompson said. “I went to Hollywood and got a position at Paramount Pictures and moved out there.”

Thompson worked on several made for television movies.

When he hasn’t worked on films, Thompson has also worked as a radio broadcaster, since the age of 15, including a stint of 15 years at WHO Radio.

“When I wasn’t doing movies, I was working in radio,” Thompson said.

Currently he has a Sunday morning music and memories show, “The Musical Clock Show,” in which he plays Christian music, as well as the hits from the 1940s and 1950s and a spiritual message.

Thompson is originally from New York.

“Wendol called me up on the phone, and because we had worked together on several films I worked on that filmed in Iowa, we became good friends,” Thompson said. “He told me about this project, and it was something I never had come across before.”

Thompson remembers during World War II that P.O.W. Camps were in existence, as he saw them in New York. He didn’t realize, however, that the Midwest ever had any.

Thompson also finds a draw for the story, because of the human element.

“Anything about the military or bringing honor to our military is something I like to do with my projects,” Thompson said.

Thompson has also found there have been fewer decent movies released in the past 20 years.

“I haven’t been to a movie in the past 20 years,” Thompson said. “There aren’t as many family films in existence anymore. I remember when I was younger, my family would go to see Tarzan or the Durango Kid films on Sunday afternoons at the cineplex.”

Thompson said writing the screenplay could take months and additional research trips to Algona and the museum to find the angle needed to best portray the story on screen.

Jeremy Ray Smolik's "Career Day" film fest entry

2011-08-13T17:44:00.000-07:00

Jeremy Ray Smolik really impressed me with his "Career Day" entry for the annual 48 Hour Film Festival!!

See it at: http://www.youtube.com/watch?v=Jnloeudui7k&feature=youtube_gdata_player

Iowa's film program costs near $1.5 million with deal

2011-08-10T16:14:00.000-07:00

From the Des Moines Register (http://www.desmoinesregister.com/article/20110810/NEWS10/108100311/-1/GALLERY_ARRAY/Iowa-s-film-program-costs-near-1-5-million-deal):

Iowa's film program costs near $1.5 million with deal
by Lee Rood

Producers of the 2009 movie "Smitty" reached an agreement this month with state prosecutors to receive cash and tax credits, pushing the taxpayer tab of court settlements tied the collapse of Iowa's film program to almost $1.5 million.

Under the agreement, makers of the family feature film starring Peter Fonda, Mira Sorvino and Louis Gossett Jr. will receive more than $265,000 in tax credits and almost $60,000 cash.

Jeff Thompson, a deputy state attorney general, said settlements with the makers of "The Crazies" and "The Experiment," two films whose expenses are being audited by the state, are expected to eventually be the largest reached. A handful of others could still receive tax credits.

Several filmmakers had yet to receive credits when the lucrative film incentive program was suspended in 2009 due to abuse and mismanagement. A state audit released in 2010 found 80 percent of the tax credits awarded before the program collapsed - some $26 million of $32 million - were issued improperly.

The state paid $450,000 this year to Midsummer Films, a film company that was planning to spend millions in Iowa before the program was abandoned. The company planned to make six movies, to be filmed over three years, that were worth an estimated $60 million to $70 million.

Late last year, the state also paid a $434,171 cash settlement to After Dark Films. The amount was on top of $315,828 in tax credits previously awarded to the company, which made the horror movies "Husk" and "Fertile Ground."

Next week, Tom Wheeler, former manager of the state's one-man film office, will face charges of felonious misconduct in office, first-degree fraudulent practices and conspiracy. He has pleaded not guilty.

Dennis Brouse, 60, of Plattsmouth, Neb., the owner of Changing Horses Productions, is scheduled for trial March 15.

Chad Witter, 38, of Bettendorf, a tax credit broker accused of helping several filmmakers abuse the program, is scheduled to go to trial April 16.

Harel Goldstein - also known as Harel Gold and Kevin Ward - of Calabasas, Calif., has been charged with first-degree fraudulent practices, forgery and conspiracy. Goldstein, 50, is a movie distributor and was producer of the film "Underground." He has yet to appear in court.

Tom Wheeler trial finally underway

2011-08-07T07:22:00.000-07:00

After being delayed 4 times at least, the trial of Tom Wheeler looks like it may be finally beginning, according to this article on WHO-TV's website:

http://www.whotv.com/news/who-story-film-head-court-date-20110804,0,6415666.story

There seems to be a feeling from many people that the idea of this trial is to "throw Tom Wheeler under the bus" and leave higher-ups of his from the Iowa Department of Economic Development (IDED) and members of the Culver administration, including former Governor Chet Culver himself, unscathed by the scandal with total blame assigned to Wheeler. We'll have to stay tuned to see how all of this plays out. Besides the Tom Wheeler trial, there are 3 other known trials that have been reported by the press.

Iowa Film Featured Prominently at the Rural Route Film Festival in New York

2011-08-07T07:17:00.000-07:00

Iowa is featured quite prominently in this article in the New York Times about the Rural Route Film Festival in Queens (in New York City):

Filmmakers Head to the Country, in Several Countries

http://www.nytimes.com/2011/08/05/movies/rural-route-film-festival-in-queens.html

From Quad Cities Times

2011-08-04T05:46:00.000-07:00

Mel Brooks is cooking up a new horror film to be made in Rock Island.

The $5 million movie - "Pizzaman" - will start shooting in September and is the latest non-comedy project from Brooksfilms, which made "The Elephant Man" (1980), "The Fly" (1986), "The Fly II" (1989) and "84 Charing Cross Road" (1987).

Mr. Brooks, the 85-year-old comedy guru, is best known for spoofs such as "Blazing Saddles," "Young Frankenstein," "The Producers," "High Anxiety" and "Spaceballs," as well as the Broadway musical hit version of "The Producers" (which originated as a straight film in 1968 starring Zero Mostel and Gene Wilder).

The project has been in development at least three years, and while the plot remains under wraps, Hollywood Reporter said the screenwriters are longtime Brooks collaboratorsRudy De LucaandSteve Haberman, who co-wrote 1995's "Dracula: Dead and Loving It," produced by Brooksfilms.

"Pizzaman" will be the film directing debut of Mr. Haberman, who co-wrote the comedy "Screw Loose" (1999), which starred Mr. Brooks.

The Quad-Cities helped land the new film because Great River Production principal Rainer Soehnlein is a business partner of Mr. Brooks, said Doug Miller, GRS co-founder and executive in charge.

GRS, a consulting andproduction management company at 1724 4th Ave., Rock Island, launched in June to help attract and assist other Quad-Cities film and television production. It's separate from GreatRiverProductions, which was formed to make the $15 million computer-generated film "Troll," which is still waiting for final legislative approval of a change in Illinois film tax-credit law to start production.

"Great River Studios has been in communications with the production company and is awaiting approval of the Illinois Film Office," Mr. Miller said of "Pizzman"'s application for state tax credits.

Betsy Steinberg, managing director for the Illinois Film Office, said her office has received an application from Brooksfilms for the movie, but could not provide details. The production will be eligible for tax credits, but Brooksfilms won't be reimbursed until after the production ends and the state audits its expenditures, she said.

The film will shoot in the area for five weeks, and be released in theaters next year, Mr. Miller said.

Ms. Steinberg said she hopes GRS succeeds because "we're hoping to grow outside of Chicagoland." The Matt Damon film "The Informant" was shot in Decatur and Springfield, and the new Superman flick, "Man of Steel," is being filmed in Plano, west of Chicago, she said.

Mr. Miller said they hope to hire as much "local" as possible. "We need expertise in areas leaning heavily toward special effects."

He said he expects many film professionals from the Chicago area will work on the movie, which will be the biggest-budget film made in the Illinois Q-C, he said. "Sugar" (2008), a baseball movie made in Davenport and Burlington, had a similar-sized budget.

"They want something that looks like suburban America, which is what we do very well," Mr. Miller said.

The fact that this low-budget horror film is atypical for Mr. Brooks is interesting, he said."He's so known for his comedies, a lot of people don't realize he gave David Lynch (who produced "Blue Velvet," "Twin Peaks" and "Mulholland Drive") his start.

Auditions will be scheduled soon for "Pizzaman."

Boston.Com Article

2011-07-31T05:27:00.000-07:00

DEVENS
The Boston Globe
Studio proposal delights officials
Local developer plans film complex
By Scott Van Voorhis
Globe Correspondent / July 31, 2011

A proposal for a Hollywood-style movie studio at the Devens complex is wowing state and local officials eager to bring new jobs to the former military base in the wake of the Evergreen Solar fiasco.

The Massachusetts Development Finance Agency, which owns the old base, is in talks to sell a prime tract of land - and provide millions of tax incentives - to a local developer with plans for setting up a studio.

And the $104 million proposal, with the potential to turn Devens into the headquarters of the Massachusetts film industry, has won an early endorsement from officials in the communities that share the former Army property.

Ayer Selectman James Fay said he is encouraged by the proposed studio project, which would provide facilities for the growing number of Hollywood productions shooting in Massachusetts.

Fay said he is cautious about the use of tax incentives to lure companies after the Evergreen debacle, in which the Marlborough-based solar-panel manufacturer used the breaks to build a factory at Devens, only to shut it down this winter, taking with it more than 800 jobs. However, he also said the $5 million sum is relatively modest compared with the $58 million package doled out to the now-struggling Evergreen.

“I have said all along Devens should focus on manufacturing,’’ Fay said, adding the studio complex, in his view, would be “manufacturing films.’’

MJM Development LLC, which is based in Andover, hopes to win approval from MassDevelopment by the end of the year to begin construction on the first phase of a 600,000-square-foot studio complex.

The project is slated to take shape on vacant land on Jackson Road, across from the Bristol-Myers Squibb plant at Devens.

The developer plans to build the project over 10 years, with an initial, $30 million phase to feature four 18,000-square-foot sound stages that would be suitable for rental to everything from big-budget movie productions to commercials. The complex would have a permanent staff of around 40, with hundreds of other positions working out of the studios at any one time, based on the various movies, TV shows, and other productions being filmed there, according to MJM.

The developer is also exploring the potential for converting what was once officer housing at nearby Sherman Square into dorms for a film school, though there are no pending plans to buy the site, said Michael Meyers, MJM’s managing partner.

“It makes a very good opportunity for the region,’’ Fay said. “It’s not on the scale of what Evergreen could have been, but at least it will be a success.’’

Along with Fay, others are also throwing their support behind the studio proposal.

HotelNewsNow.Com Article

2011-07-31T05:22:00.001-07:00

Film crews create hotel demand in Cleveland
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27 July 2011
By Carlo Wolff
HotelNewsNow.com contributor
carlo.wolff@gmail.com
Story Highlights

The key movie is The Avengers, a US$40-million Marvel Comics franchise.
One source says the movie business will swell occupancy levels in downtown Cleveland hotels.
In 2006, Spider-Man 3 generated 4,820 room nights in greater Cleveland hotels.

CLEVELAND—Movies under way in Cleveland could mean millions of dollars and thousands of room nights for hotels in the struggling northeast Ohio city. The Ohio Department of Development suggests they could produce close to US$5.3 million in economic activity and more than 41,000 room nights, making movies one of the biggest demand generators in Cleveland, on par with the Cleveland Clinic and Progressive Insurance.

According to Katie Sabatino, public information officer for the state development department, the figures are based on Ohio Motion Picture Tax applications. “There are plenty more film and TV projects that come to Ohio and use hotel nights that do not use the tax credit, and since there is no real film permit in Ohio—it is impossible to know exactly how many room nights are used,” she said by e-mail.

The key movie is The Avengers, a US$40-million Marvel Comics franchise that already has mounted a casting call of 2,000 for crowd scenes. It will be the largest feature film ever made in Ohio, according to the Greater Cleveland Film Commission.

In 2009, then-Governor Ted Strickland signed into law the Ohio Film Tax Credit, including US$30 million over two years, for film, television and other media productions in Ohio. Every dollar spent will generate about US$1.50 in local economic activity, according to the city’s film commission. Strickland’s successor, John Kasich, pushed hard to shift Avengers production from Detroit to Cleveland.

David Sangree, president of Lakewood, Ohio-based Hospitality & Leisure Advisors, said the movie business will swell occupancy levels in downtown Cleveland hotels for the year, and assuming crews “have a good experience, they’ll want to keep coming back,” becoming a new demand generator.

Top executives may stay at the Ritz-Carlton, Cleveland or the Renaissance Cleveland while “the lesser people may stay at the Comfort Inn or the Hampton Inn,” he said. “I’m sure the movie companies will try to negotiate packages that will guarantee a lot of room nights and that would give them a lower rate.”

“In effect, it’s like adding a new company downtown,” said Sangree, noting movies are being shot all over Ohio. “If a movie is really successful, it can generate some long-term benefits as well as short-term benefits.”

The head of the city’s film commission, Ivan Schwarz, said the hotel-spend and roomnight figures are realistic. They speak to at least seven movies in process: The Avengers; Fun Size; I, Alex Cross; Boot Tracks; Old Fashioned; Suicide Kings 2; and Liberal Arts. There is an application for an eighth, Flashback. Avengers is set to spawn 27,000 room nights; Flashback, 44. Respective expenditure figures are US$3.384 million and US$44,000.

“I’ve been talking about building an industry here, and that’s what we’re trying to do,” Schwarz said. “This is all part of it.”

Past performances
Dan Williams, VP of sales at Positively Cleveland, said that in 2006, Spider-Man 3 generated 4,820 room nights in greater Cleveland hotels. He suggested this year’s projections reflect eight movie productions at an average of 5,000 roomnights each. “I’d be a little more conservative than that, but looking at what was requested for Spider-Man,” it makes sense. “That would be phenomenal. But that’s eight movies, too. Movie crews tend to be smaller, but they stay a lot longer. For Spider-Man, there was almost a month in production,” at about 200 rooms per night.

Commission President Schwarz says there’s no formula on how many people are involved in a film production. About 3,300 room nights were generated by film productions in Cleveland last year—by three “small” films. Fun Size sports a 150-person crew, for example. “The wealth is spread,” said Schwarz. “They’re all over.”

Meanwhile, local hoteliers wouldn’t quantify revenue and roomnight projections.

Joseph Mattioli, general manager of the Ritz-Carlton, said these productions would benefit hotels accommodating stars, crews and their relatives. “As far as talking about how much this could bring dollar-wise and how many roomnights (these productions might generate), I cannot really comment. It changes. It’s not happening yet. Nothing has been decided. Those are all last-minute decisions.”

Williams, the sales chief at Positively Cleveland, the city’s convention and visitors bureau, said movie-related groups will bring steady business to the area but will “be smaller than the typical convention.

“Typically, an average convention (attendee) will stay two-and-a-half to three days. Typically, what we get for movie crews is 30 to 45 days. They also rent apartments. One of the good things about the movies when crews come in is they use a lot of food and beverage, so that’s a positive.”

There can be negatives, noted Leonard Clifton, general manager of the DoubleTree Cleveland Downtown Hotel. “Movies are a risk a lot of times unless you’re talking about an A-rated movie. They’re typically operating on funds that are being applied for through grants and funding can fall through … Unless it’s an A-rated, Hollywood, box-office Tom Cruise (-level movie)—I’m being a little old school there—you run a risk of collections. You have to make sure to secure money upfront.” At the same time, he noted Cleveland’s low rates and occupancy levels make it appealing to film crews.

Cleveland market
In Cleveland, developers recently broke ground on medical mart, a four-story showplace of medical equipment, and a connected, underground convention center. The 1-million-square-foot complex, costing taxpayers US$465 million, is scheduled to open in 2013.

“With the lack of a convention center, the market is not bearing premium dollars for rooms at the moment for large group businesses,” Clifton said. “They’re able to come into a city that is running 57% occupancy and you are obviously are going to get a much better rate than a city that is running 65% to 70% and has a full convention center doing 30 to 50 citywides a year.”

There are about 4,200 hotel rooms in downtown Cleveland, according to Positively Cleveland’s Williams.

According to STR, parent company of HotelNewsNow.com, the greater Cleveland market offers 189 hotels with more than 21,600 guestrooms. STR said overall occupancy in 2010 in greater Cleveland was 54.5%, with an ADR of US$81.92. The first three months of 2011 yielded respective figures of 47.1% and US$83.90.
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From WWW.10TV.com

2011-07-26T15:39:00.000-07:00

More Movies Shot In Central Ohio From Tax Credit
Monday, July 25, 2011 5:57 PM

COLUMBUS, Ohio — A tax-incentive program has brought a taste of Hollywood to Ohio.

Since former Ohio Gov. Ted Strickland in 2009 approved a $30 million film tax credit for 2010-11, several movies have been shot in the state, 10TV's Andrea Cambern reported.

The credit only applies for productions that promise to spend more than $300,000.

"I think for Ohio, especially in the last couple of years, we're definitely seeing the upswing of growth," said Amir Elyon, the state's tourism director.

SPECIAL SECTION: Entertainment

Some of the locations that have been used in Ohio include Oxford, when George Clooney, Ryan Gosling, Philip Seymour Hoffman and Paul Giamatti were working on "Ides of March." The movie was shot on the Miami University campus.

"The Avengers" is set for a 2012 release and is being shot in Cleveland, featuring Robert Downey Jr., Chris Evans, Scarlett Johansson and Samuel L. Jackson.

Recently, Bexley native Josh Radnor shot "Liberal Arts" on the Kenyon College campus, his alma mater.

"It's a great school," Radnor said. "It's a beautiful school. They've really opened the place up for us, and it's just been really nice."

Radnor, who stars on the CBS show "How I Met Your Mother," said he started working on the script about a year ago and knew central Ohio was the place for the movie to be made.

"You can film anything here in Ohio except for a desert and the Rocky Mountains," Elyon said.

Huntington Park was recently the backdrop for "Gibsonburg: The Movie," the story of a 2005 Ohio high school state championship team.

Talent and crew members from central Ohio were used. Director Bob Mahaffey said that he plans to enter the motion picture in national film festivals.

A new Web series, "Two Doors Down," is about to debut. The comedy is based in Columbus.

The series revolves around a divorced couple trying to raise their son while living in the same neighborhood. The series was shot with central Ohio areas in neighborhoods that included Clintonville and German Village.

The series will debut on Aug. 21.

Several filmmakers spent the weekend shooting and editing 4-7 minute films. The 48 Hour Film Festival is scheduled for Wednesday and Thursday at the Grandview Theater, located at 1247 Grandview Ave.

From SouthCoastToday.com ..Could've Been In Iowa...

2011-07-24T04:33:00.001-07:00

Construction on Mass. film production center could start next year

By Michael Norton
STATE HOUSE NEWS SERVICE
July 23, 2011 12:00 AM

BOSTON — The state's economic development agency has agreed to enter into negotiations over a sale price and tax incentives with a development company that plans to build a 600,000-square-foot, state-of-the-art film and television production complex in Devens.

After declining to release details following a unanimous board vote a week ago, MassDevelopment officials on Thursday elaborated on plans to move ahead with MJM Development LLC of Andover, which plans to build the studio complex, including four 18,000 square foot sound stages, over 10 years.

The deal hinges on the development team, helmed by former hotel industry executive Michael Meyers of Andover, purchasing two lots encompassing a 28-acre site along Jackson Road, the main access road into Devens, a former military installation in north central Massachusetts that is home to about 75 businesses.

The project's first phase is expected to include the four sound stages, a mill, production support offices, a storage building and other support areas totaling 126,000 square feet and expected to cost $30 million.

At full build-out, the project will include 600,000 square feet with eight sound stages at a cost of $104 million. The full project is expected to create 44 permanent jobs and another 800 to 1,000 jobs when the facility is fully leased, according to a memo to the board from MassDevelopment chief Marty Jones.

If details are worked out, the first phase of construction could begin next year and the first facilities could open by the end of 2012, according to a MassDevelopment official.

Meyers told State House News Service on Thursday that he is working on the project with local businessmen who wish to remain anonymous. The team includes real estate developers and equity investors, film industry consultants, studio operators and designers, according to officials familiar with the project.

While Meyers said the project will be fully funded through private equity, MJM and MassDevelopment have also agreed to enter into talks on tax increment financing valued at $5 million over 20 years, with clawback provisions, to reduce property taxes on improvements made in connection with the project.

Meyers acknowledged a "long road to travel as we start our due diligence, engineering and permitting" but expressed confidence about moving the project forward.

Under state law, MassDevelopment is the designated public agency responsible for redevelopment within what is known as the Devens Regional Enterprise Zone. MJM Development, which was formed to build the studio complex, hopes to provide a facility capable of producing feature and documentary films, TV programs and commercials.

From The Denver Post, by Jason Blevins

2011-07-15T09:08:00.000-07:00

business
Colorado's new film commission chief wants to boost state's movie-making incentives
By Jason Blevins
The Denver Post

Legislators in 17 states, including Michigan, Arizona, Kansas, New Mexico and Idaho, are scaling back and even suspending movie-incentive programs as they wrestle with budget deficits.

Lawmakers in Utah and Wyoming are ramping up programs that offer cash rebates of 25 percent or more to filmmakers who roll cameras in their states.

Then there's Colorado, which boasts the oldest state film commission in the country. Filmmakers have largely eschewed the state — not for its lack of theater-filling landscapes but for its bottom-of-the-barrel incentive program, which offers a comparatively meager 10 percent rebate to production outfits that film here.

In the past seven years, legislative attempts to grow the incentive program have failed, including this year's push to tack a dime onto every movie ticket sold.

"I'm a firm believer that if we create a better incentive plan for Colorado, it will be a good business development tool," said Republican state Rep. Tom Massey, who has carried some form of movie-incentive legislation for the past seven years. "We have to find a way to create that funding source outside of the traditional government funding procedures."

Colorado has not hosted a major movie production in years, while neighboring states such as New Mexico

and Utah have attracted scores of Hollywood hits.

Since Utah created its state-run film commission in 2004, 65 film projects have earned rebates and left about $178 million in the state, according to the commission. Recent films out of Utah include all three "High School Musical" flicks and the Oscar-nominated "127 Hours."

New Mexico's 25 percent incentive has lured 159 major productions in the past nine years, harvesting almost $4 billion in economic impact and paying out $253 million in rebates, according to that state's film office.

With a big-name Hollywood producer now helming the recently revived Colorado Office of Film Television & Media, and a governor friendly to the idea of more Colorado-based movies, hopes are high that Colorado can regain its luster with moviemakers.

"Independent filmmakers generally choose the place with the best incentives," said Donald Zuckerman, whom Gov. John Hickenlooper this spring tapped as new chief of the Colorado Office of Film, Television and Media.

Zuckerman would know.

The Hollywood producer has backed almost 20 pictures, including several with the late director George Hickenlooper , cousin of the governor. In the past decade, Zuckerman said, he has watched incentive programs grow to dominate the industry. A pair of recent films he produced in New Mexico earned him cash rebates of $1.3 million and $1.25 million.

"We could not have made those movies without that money," he said.

He has crafted a plan — which he says he can't discuss until he presents it to the governor — that "will bring a lot of business to Colorado. A lot of significant business."

"It will not cost the state any money but will actually earn the state money," Zuckerman said. "The centerpiece is something unique that no other state has done. It will actually be a profit center for the state."

In 2010, a record 40 states delivered $1.4 billion in film and television tax rebates as part of incentive programs. Today, 43 states have movie-incentive programs. More than $6 billion in public money has been delivered to filmmakers since incentive programs first bloomed a decade ago, according to research by the Washington, D.C.-based Tax Foundation.

In fact, some scripts, Zuckerman said, are actually being written and revised with an eye toward incentives, which can reach as high as 42 percent in suddenly movie-mad Michigan. Last year, Michigan taxpayers paid nearly $100 million in incentives, almost triple the amount paid in 2008, the incentive program's first year.

But in Michigan, they are skeptical. A report last fall by the state Senate fiscal agency argued that nearly half the private spending generated by movie-making "effectively left the state and did not contribute to the state's economic activity."

The report found the state spent $37.5 million in rebates to generate $21.1 million in private-sector activity in 2008-09 and plans to spend $100 million in 2009-10 to generate $59.5 million in private-sector activity.

A similar report by New Mexico State University's Arrowhead Center concluded that the state — which has recently been dubbed "Tamalewood," thanks to its thriving movie industry — lost money on its incentive program.

(To counter the reports, movie and tourism supporters in both states commissioned studies that show, not surprisingly, significant boosts in revenue for every dollar invested in movie incentives.)

Today, Michigan is planning to cap its rebate program at $25 million and New Mexico is weighing a cap.

Nationally, both support for and opposition to movie incentives cross political boundaries. The liberal-leaning Center for Budget and Policy Priorities and the conservative Tax Foundation issued reports last year concluding that movie incentive programs delivered too little bang for their buck.

"Basically, this thing has become an arms race. I call it a race to the bottom," said Harris Kenny, a policy analyst for the free-market-advocating Reason Foundation who testified against the proposed 10-cent movie ticket fee in Colorado's statehouse this spring.

Still, some states are investing in movie incentives, betting that the scaling-back by other states poses an opportunity.

In Utah, for example, lawmakers this spring raised the state's incentive from 20 percent to 25 percent and established a fund that guarantees rebate money would never lapse.

Studios love the fund concept because it means they get rebates in weeks instead of months or even years, said Marshall Moore , director of the Utah Film Commission.

State lawmakers believe in the program, he said, and they recognize the promotional opportunities.

"We have a proven stable record of success over the years, and legislators recognize those benefits," Moore said.

"Our program is here to stay. This is the way of the future and the way it is today."

Jason Blevins

Detroit Free Press Article

2011-07-04T05:18:00.000-07:00

Alternatives to movie incentives aim to keep Michigan competitive

With the end of tax credits that spawned a growing Michigan film industry, new state incentives -- beyond the $25 million in direct subsidies approved for 2012 -- are a long shot for the near future.

But advocates of incentives, who say $25 million isn't enough to keep Michigan in the highly competitive game, aren't giving up.

Here are some possible scenarios:

• The $25-million direct subsidy could become the norm, and major productions such as "Oz" take Michigan off their possible location list.

"Oz" was approved for more than $40 million of refundable tax credits and is in preproduction at Raleigh Studios in Pontiac.

• The direct subsidy could be increased a lot or a little if the program proves successful and state revenues grow enough to allow more spending. Gov. Rick Snyder would consider this.

• A different type of tax credit -- one that could be sold since the state's tax format changed -- could be used, with a Louisiana program serving as the model.

State Sen. Majority Leader Randy Richardville, R-Monroe, is exploring this, but Snyder doesn't like credits.
State's goal: Make sure film grants benefit Michigan

First of three parts

Gov. Rick Snyder wanted a stripped-down business tax, one without loopholes and exemptions for every well-connected interest group. And that's pretty much what he got from the Legislature when it replaced the Michigan Business Tax with a 6% corporate income tax.

Since the movie and TV subsidies enacted in 2008 were calculated as part of each production's Michigan Business Tax (MBT), they will be history when the new tax -- to which virtually no media productions would be subject -- takes effect Jan. 1.

In their place, the Legislature approved Snyder's recommendation for $25 million in direct grants for media production, unconnected to the tax liability of investors or producers, for the state spending year that begins Oct. 1.

Officials in the Michigan Film Office and the Michigan Economic Development Corp. are in the early stages of developing a plan for the administration of that fund.

Film Office spokeswoman Michelle Begnoche said the grant-making procedures, which may or may not require legislative action, will almost certainly include criteria designed to maximize hiring of Michigan residents, spending in Michigan and promotional value to the state. She said administration officials also want to maintain as much flexibility as possible to control the size of the awards and limit reimbursements for spending deemed of little value to Michigan.

Under the original incentives program, Michigan taxpayers paid up to 42% of the cost of talent (stars, directors, etc.) up to $2 million per person. Begnoche said that cap could be reduced since "most of those ... expensive people don't live in Michigan."

Snyder administration proponents of the grant program said it will allow the state to target and control spending better, while still attracting film and TV production. Producers also benefit, they said, because the state money could be available up front, instead of at the conclusion of filming.
Exploring a few options

Entertainment industry advocates mostly reject that view and urge Snyder and the Legislature to consider a reconfigured tax credit.

They have a potential ally in Senate Majority Leader Randy Richardville, R-Monroe, who has expressed concern about the fate of investment made under the original incentives, especially the millions of dollars spent to develop Raleigh Studios in a former Pontiac auto plant.

Richardville has asked Senate staff to explore options outside the grant program, said spokeswoman Amber McCann.

One possibility, she said, is an incentives program like that in Louisiana, which provides transferable credits (which can be sold back to the state treasury) against its business and income taxes. The incentives program has been expanded in recent years to include the recording industry.

The annual cost to Louisiana taxpayers was not immediately available. But the state's film office says the credits have resulted in $3 billion in spending in Louisiana since they were enacted in 2002.

Snyder appears to have little interest in restoring tax credits in any form.

"The governor wants to see how the grant program works out," spokeswoman Sara Wurfel said. "He believed we needed to get tighter control over the spending and a more transparent process, and that's what the new law does."

Another alternative -- and one Snyder may be more willing to entertain, Wurfel said -- would be increasing the money available under the new grant program. Film industry advocates told lawmakers in tax hearings that at least $100 million annually would be needed to sustain a viable movie and TV industry in Michigan.

Wurfel said Snyder would be open to increasing the $25-million program if it appears to be working and state finances stabilize enough to make it possible. But putting film subsidies in direct competition with school, health or community funding could be politically dicey.
Where things stand now

In the meantime, advocates for the industry will press for more. Some Oakland County legislators have expressed concern that the downsized incentive program could place the investment and jobs at Raleigh Studios in jeopardy.

Sen. Mike Kowall, R-White Lake Township, said he would like to "do something," but it's hard to know what, before the new tax and budget plans begin later this year.

John Truscott, a longtime Lansing public relations consultant who has been working with an industry coalition called Michigan Film First, said, "Right now, everybody is just trying to catch their breath ... and assess what (the new rules) mean."

The Film Office is doing the same thing, Begnoche said, but without the expectation that the rules will change soon.

"We've been given our directive," she said. "We're going to focus on what we know ... and that's that we have $25 million to work with next year, and we're going to try to use it in a way that's best for Michigan."