Date: 03/09/2006
Final
BILL SUMMARY for HB06-1362
HOUSE COMMITTEE ON FINANCE
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11:35 AM -- House Bill 06-1362 - Concerning Incentives for the Motion Picture Film Industry
Representative Massey and Representative Jahn, prime sponsors, explained the provisions of the bill and commented on the need for Colorado to attract more film production to the state. Representatives Massey and Jahn began by showing the committee a brief video on the motion pictures filmed in Colorado over the years.
Representative Massey began by describing the provisions in the bill. The bill allows any production company that spends at least 75 percent of its production expenditures in Colorado on qualified local expenditures and at least 75 percent of payroll expenditures on local hires to claim an incentive payment from the Colorado Economic Development Commission (EDC). The bill defines several terms, including qualifying local expenditures, qualifying payroll expenditures, and production company. The amount of the incentive would be determined as follows:
● If the film originates in Colorado and total qualifying expenditures are at least $100,000, the incentive will be equal to 10 percent of the total qualifying expenditures.
● If the film does not originate in Colorado, but total qualifying expenditures are at least $1 million, the incentive will be equal to 10 percent of the total qualifying expenditures.
Representative Jahn commented that the bill requires a company to apply to the EDC prior to beginning production in Colorado. The bill allows the EDC to determine the application and evaluation process. For each application that meets the guidelines for eligibility, the EDC will grant conditional written approval to the production company. Once the film production is completed, the company then would submit financial records along with a signed affidavit, detailing expenses incurred while filming in Colorado. If the amount expended is equal to or exceeds the production company's projected expenditure, then the company is issued an incentive payment in the amount specified in the bill.
The committee briefly discussed the incentives in the bill.
The following persons testified:
11:43 AM -- Mr. Dennis Berkfeldt, President of the Denver Branch of the American Federation of Television and Radio Artists, distributed a handout (Attachment E) to committee members and testified in support of the bill. Mr. Berkfeldt commented on the history of film production in Colorado and said that the state needs to be more competitive. Mr. Berkfeldt said that surrounding states such as Utah and New Mexico, offer more incentives to the film industry to make films in their states than Colorado. Mr. Berkfeldt commented on the economic impact of the film industry to these states and said that Colorado needs to offer some incentives or the film industry will look to other locations for making films. Mr. Berkfeldt closed by saying that House Bill 06-1362 incentives will only be realized by the industry after a film has been make, jobs have been filled, and dollars have been spent in Colorado. This means that the state and local governments will capture tax revenues from film industry expenditures before money is spend under the bill.
11:47 AM -- Mr. John Singer, Screen Actors Guild, testified in support of the bill. Mr. Singer commented on the economic benefits the state would realize under the bill and urged the committee to support the legislation.
11:48 AM -- Mr. Jim Taylor, American Entertainment Union, testified in support of the bill and commented on the history of filming motion pictures in Colorado. Mr. Taylor said that House Bill 06-1362 will help promote film-making in Colorado and bring back an industry that was once very active in the state.
11:52 AM -- Mr. Ron Schwab, International Teamsters Union, testified in support of the legislation and talked about the large number of trucks used in the filming of motion pictures. Mr. Schwab said that Colorado is one of the only states that does not provide an incentive to the film industry. Mr. Schwab closed by saying that House Bill 06-1362 is all about bringing jobs to Colorado. When a film is made, it takes carpenters, tradesmen, truck-drivers, and the film industry to make a motion picture possible. Mr. Schwab urged the committee to support the legislation.
11:57 AM -- Mr. Ken Seagren, Lighting Services Inc., testified in support of the bill and said that the legislation will stimulate Colorado's economy by bringing the film industry to Colorado.
11:59 AM -- Mr. Greg Babcock, coloradofilmlocations.com, urged the committee to support the bill. Mr. Babcock commented on the number of films that are filmed in locations other than Colorado because the state does not offer the industry any incentives. Mr. Babcock closed by commenting on a film that was shot in Vancouver, B.C. rather than in Colorado.
12:05 PM -- Mr. Martin Cuff, Colorado Film Commission, testified in support of the bill and distributed a handout to committee members (Attachment F). Mr. Cuff commented on the benefits the state would receive from having more films shot in Colorado. Currently, the average feature film and even an average television commercial, spends about $100,000 a day. Mr. Cuff said that this money is spend on local labor and services, camera operators, sound and lighting technicians, caterers, plumbers, carpenters, electricians, animal trainers, truck drivers, and many other people who are needed to make a film. Mr. Cuff said that estimates show that for every state dollar spent on the production of a film, an additional $2.50 is spent in the wider economy. Mr. Cuff closed by saying that incentives are a standard film business practice. The state needs to adopt House Bill 06-1362.
12:10 PM -- Mr. Tony Gagliardi, National Federation of Independent Businesses, urged the committee to support the bill and commented on the number of small businesses that would benefit from the legislation.
12:14 PM -- Mr. Maurice Devany, representing himself, urged the committee to support the legislation.
12:16 PM -- Mr Emzy Veazy III , representing himself, testified in support of the legislation and commented on the need to make the legislation fair to everyone. Mr. Veazy closed by saying that equity is important and part of the political economy.
12:25 PM -- Mr. Thomas J. O'Connor, Independent Filmmakers, testified in support of the legislation.
Representative Massey and the committee engaged in a discussion about the state money used for incentives in the bill. Committee members voiced a concern that there is no cap in the bill for the money appropriated by the General Assembly for incentives. Representative Massey said that the bill states that the amount of incentive payments would be limited to the amount appropriated by the General Assembly for the purpose of this program. Should the EDC receive applications for incentives that exceed the amount appropriated, the funds are to paid on a first-come, first-served basis.
After a brief committee discussion, Representative Vigil, Chairman pulled the bill off the table to allow the sponsors to add a provision to the bill that would address a cap on state incentives. (The bill was not rescheduled.)
12:36 PM
Adjourn.