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Subject: incentives

It is becoming increasingly clear that the film and television industry incentives will not be given a chance to pass in this legislative session. Filibustering over the budget has taken a large chunk out of the session and there are other pressing issues for the boys on the hill to deal with. I recommend that anyone interested in bringing film and television to the state look into Amendment 3. Passed at the last session, it allows county commissions and municipalities to create their own incentives to induce industry into their counties. If we all work together to work out a formula for paying the incentives back to the production companies in a timely manner without strapping the various commissions, then we can move forward together without the aid or input from the state. I will be happy to get together with anyone and everyone to work on this. As a film maker this is in my best interests, and I’m sure it is in yours as well. To those of you who are out of state and are monitoring us here in Alabama, all I can say is that we are a diverse group of intelligent people dedicated to making films and television shows here in our State. We will prevail. We will have incentives at the local level if nothing more. We will be competitive with other States. Give us a moment to catch out breaths and we’ll be back.

-George Caldwell

Subject: Passing The Bill

If you have been wondering where AFTA has been these past few months, and during the legislative session that is on going, here we are. I have been working on a two-hour special that began shooting on March 14th and wrapped principle videography March 23rd. It is what I call “Monster Garage on Steroids”. I’m happy to say that we used only Alabama talent and crew. Terry Duffie of Enterprise is largely responsible for this television show, taking place. He is a gifted Executive Producer. As the Director and one of the Executive Producers, I have had to keep focused on the project as we are spending other people’s money. That being said we were not to busy on a moments notice to attend the public hearing for Senate Bills aimed at tax incentives for our State. Terry Duffie and I along with others in our business spoke to the committee led by Senator Bedford about the importance of these bills for the well being of our industry here in Alabama. Of course the other side was also well represented in the form of Dr. Hubbard and a respected tax attorney. To the credit of the committee they recognized the importance of the film and television industry and suggested that both sides get together and work out the differences. Who knows. 

The Film Office was there to monitor, and a quality information package along with a very good letter from the Director was distributed to the committee. There is still much to be done and we are far from home. Please contact the film office and let them know that you want this to happen. Let’s work together for a better Alabama for the future.

As soon as I have finished the show that I am working on I will be back walking the halls of the State House, visiting with the committee members and others to push our cause. The State House belongs to us, so go and make your presence known. I look forward to seeing you there, if not in person, in spirit.

-George Caldwell

Subject: New Canadian incentive push.

This was in the same issue of the Hollywood reporter and sent as a heads up to me by our friend Chuck Bush in Louisiana. Thanks Chuck This is a clear example of the value of the film and television industry to an economic base. Canada has begun to feel the pinch of states enacting tax incentives to keep production at home in the US. Alabama can be a major player in the film business growing an industry that can produce hundreds of millions of dollars in economic growth. With out building a road or a manufacturing plant and not even ponying up millions of dollars in advance. What ever incentive dollars that are returned to the production companies working in the state are after the film dollars have been spent in the state. Win Win

Ontario sweetens lure for prod'n

TORONTO -- Looking to bolster the flow of production into Toronto, the Ontario provincial government on Tuesday increased the tax credit for foreign producers shooting here from 11% to 18%. "This is a significant increase in the tax credit and makes Ontario competitive again with any jurisdiction," said Douglas Frith, president of the Canadian Motion Picture Distributors Assn., which represents the interests of Hollywood studios in Canada. The production tax credit hike to 18% follows the federal government in February raising its own tax credit for foreign producers from 11% to 16%. "We need to be competitive in a North American environment," Ontario finance minister Greg Sorbara said, explaining the tax credit increase. Sorbara, who a year ago provoked industry scorn by talking publicly about reducing and even scrapping the foreign-producer tax credit, showed earlier reluctance to join a global bidding war for business from Hollywood by persistently upping tax credits. (Etan Vlessing)

-George Caldwell

Subject: States Incentives

This was in the Hollywood Reporter today the 22nd of December. I am pretty sure that Governor Schwarzenegger will be able to convince the rest of the legislature. We need the same help here in Alabama. We should be doing between $150 and $200 million dollars a year in film and television here in Alabama. Again have a Blessed and Merry Christmas. Be safe on the highways and lets come together in the New Year to make a difference for our friends and families for generations to come.

Calif. Works on prod’n credits

California could be the next state to pursue production incentives under an ambitious set of proposals that could be ready early next year. Sources say Gov. Arnold Schwarzenegger is ready to flex his political muscle in support of the incentives, which still face resistance from lawmakers in Sacramento because of the ongoing budget crisis and the fact that film and TV production is mostly based in Southern California. A similar effort died in committee in September 2002, nine months after it was announced by then-Gov. Gray Davis and as the deficit problem mounted. That plan, which enjoyed the support of nearly every major performers union, would have provided a 15% wage-based tax credit applicable to the first $25,000 of a employee’s salary on productions with budgets of up to $10 million that took place in the state. Early drafts of the new incentive package are said to be even more ambitious, though a wage-based tax credit is still believed to be one of the central tenets. Several states including New Mexico and Louisiana have benefited from innovative incentive packages that were clearly aimed at luring productions that might otherwise go abroad to save money. New York recently established production tax credits on both the state level and in the Big Apple. (Jesse Hiestand)

-George Caldwell

Subject: Film In Alabama

Before we go on to the next phase of our work in the film and television tax incentive bills I thought that you all would like to know what the actual numbers were from the State of Louisiana. I have attached the data from Mark Smiths office for you to have a look at. As they say in poker “read em’ and weep” For those of you who will be unable to open this attachment, for whatever reason I’ll give you the readers digest version.

(Editor's note: there is a large, 717 kb JPEG photo of this information that you can download here- Louisiana Request 2 Dec. 21, 2004 )

2001 before the incentives the state posted income in the area of twenty million for the year 2002 was the year that they passed their legislation. The following is only from July to December of the year. Two film companies shot a total of 90 days. The reported in-state expenditure was sixty two million three hundred thousand. For the year 2003 saw six companies shooting in the state for a total of 237 days with a reported in-state expenditure of one hundred nineteen million five hundred thousand dollars. 2004 the report is from January to July. Eight companies have shot in the state for a total of 390 days with an in-state expenditure of sixty nine million two hundred thousand.

In less than three full years of incentives, Louisiana has gone from shooting 90 days to 390 and has garnered two hundred fifty million dollars of in-state expenditure. This is some food for thought for those of you who are able to help change this state. For those of you who cannot help directly; this is food for thought in voting. We fall further behind each day we wait for change. Let’s make the upcoming session of legislature a time for change and make our voices heard in the governing body of our State. The people of Alabama deserve better. Let’s work together to give it to them. Each one of you is important in the growth of Alabama, even you guys in Hollywood. I consider you all family and look forward to jump starting our industry here next year. Have a very Blessed and Merry Christmas.

-George Caldwell

Subject: More grist for the mill.

This was in the Hollywood Reporter dated December 16, 2004. Written by Nikki Denvir NYS Oks Prod’n tax breaks New credits worth up to $12.5 mil The New York city council on Wednesday passed a 5% tax credit to boost film and TV production in the city and complement the state’s existing 10% credit legislation. The bill, which was championed by New York Mayor Michael Bloomberg, was passed by the City Council on a 48-1 vote. Only councilman Michael McMahon from the Staten Island district opposed. 

The new law will provide tax credits totaling as much as $12.5 million per calendar year in connection with below-the-line costs as an incentive to keep productions from heading north to Toronto or other foreign locales that have subbed for Manhattan in recent years. “Diversifying our economy across all five boroughs is a key prong of our economic development strategy; that’s why we are so committed to expanding our share of this important industry,” said Bloomberg, who is scheduled to sign the bill Jan. 4. 

New York State already has a similar tax-incentive plan on the books. Silvercup Studios president Stuart Match Suna said that swift passage of the bill was “a collective effort of industry and labor. It was supported jointly by all sides of the business.” New York film commissioner Katherine Oliver said she is “grateful to the City Council for passing this so quickly.” As a result of the tax credit, NBC has already decided to produce a new pilot revolving around New York police detectives in the 1970s in the city rather than shoot it in Toronto as previously planned, council officials said. “Film and television production employs over 100, 000 New Yorkers, and this measure is a critical component of our efforts to retain and attract production work,” Bloomberg said. Representatives from Silvercup Studios, Steiner Studios, SAG and the MPAA testified Wednesday before the City Council’s finance committee about the importance of taking steps to retain and recruit film and TV productions. “This bill is part of our umbrella ‘Made in New York’ program”. Oliver said. “More New Yorkers will be put to work, and we will work with unions to diversify New York workers. 

The new tax credit will be touted at a news conference scheduled for today on the steps on New York City Hall. Among those scheduled to appear are City Council Speaker Gifford Miller, NBC Entertainment, News and Cable president Jeff Zuker, Steiner Studios chief Douglas Steiner and Silvercup’s Suna. Representatives from SAG the DGA, the American Federation of Television & Radio Artists, the International Alliance of Theatrical Stage Employees and the Teamsters also will be in attendance.

-George Caldwell

Subject: Happy Holidays from AFTA

Before everyone gets away for the holidays I want to take a moment to let you know that this has been a good year. We have made progress with some small films being shot in the state. The film “Constellation” starring Billy D Williams, shot in Huntsville will have it’s premier in January. “Heavens Fall” filmed primarily in Monroeville and Montgomery starring Timothy Hutton is still in post. Both of these films were in the four to five million dollar range and independently financed. With the new federal tax cut bill placing film and television in the manufacturing category, there is an opportunity to really begin a push for our state film and television legislation. Senator Erwin has pre-filed the tax incentive bills for the next session; the numbers are SB 1, SB 2 and SB 3. We have enlisted the help of some visionary legislators who recognize the importance of this industry for the State of Alabama. 

With the help of the Governor and some key Cabinet members we will have a more than fighting chance next session. In the year 2002 Louisiana voted into law, tax incentives for film and television. The numbers I received from the Louisiana film office are impressive not only in dollars but the overall impact of the industry on the state. The educational opportunities, investment and growth of the ancillary industries that support every film community is a model for any state. The Film Office run by Mark Smith and his associates are continuing to build on their success. I believe the film “Ray” which was shot in Louisiana will bring an Oscar to the state. 

The Governor of Georgia has also just enacted new tax incentives for film and television. Some of the crew base that moved to Louisiana from Georgia to work in films will be moving back home. It took Louisiana two years to pass their incentives. This will be our second try. With your help, and those in the legislature who see the long-term benefits, I believe we will be successful. The increased film and television activity in the South East will be a great boon to the education systems in the regions supporting the industry. Not only in actual dollars into the local economy but also in the growth of facilities that will begin teaching the necessary production skills to work on the set. This is our opportunity to lay the groundwork for the future of the industry here in the State of Alabama. Don’t let this slip away. Have a great Holiday Season and be safe.

-George Caldwell

Subject: Tax Incentives

A quick note to let you know what is going on. We are currently waiting on precise information on how to apply the tax cuts in HR4520. Members of the DGA and other organizations are working with entertainment tax specialists for clarification and application of the federal tax incentive package. This is a tremendous opportunity to infuse the film and television industry not only here in Alabama, but nation wide. This bill was championed through the federal legislature by the MPAA, DGA, SAG and and many other related guilds and organizations, for the purpose of stopping runaway production to other countries. This is an ideal opportunity for the film makers in Alabama to step up and make some movies. Louisiana is poised to break the 300 million dollar mark this year and we here at AFTA wish them more and more success. The more successful they are, the more opportunities for all of the southeast. We are still working on state tax incentives, and with the help of far thinking legislators that include our Governor, his Cabinet and advisor's Alabama will soon be on the map as a film and television state of opportunity. God Bless and Keep you. Though us He will work wonders.

-George Caldwell

Subject: HR. 4520

I am sending a portion of the Bill that President Bush signed into law that impacts the film and television industry. This is huge for our industry and for Alabama film makers who have access to investor dollars. Until we can get incentives unique to Alabama in place, this new Corporate Tax Bill will help. Currently the DGA is doing more work on specifics from entertainment tax experts for producers. As soon as these specifics are available I will send them out to our membership. Isn't it sad that the Federal Government has to take the lead for Alabama. Maybe our elected officials and heads of teacher organizations will take note. Any way here it is.

Special Rules for Certain Film and Television Productions in HR.4520

Purpose: To encourage film and television production in the United States in response to an aggressive effort by other nations to steal U.S. jobs by luring away U.S. produced film and television productions with a variety of incentive programs.

Background: Today, a number of countries have enacted incentive programs to attract U.S. film productions as a means of creating local jobs. Those incentive programs are designed to lower the cost of producing a film or television production. Canada accomplishes this through a tax credit that is paid to producers based on the cost of hiring Canadian workers. The UK, Germany and other countries accomplish this by permitting the immediate write-off of film production costs which attracts investors tempted by the tax savings that can be realized through large deductions. Through either approach, it is possible to reduce the costs of production by approximately 7% to 15%.

HR 4520 Provision: Under the provision in the FSC/ETI Conference bill, a category of film and television productions, which are most likely to runaway to other countries, would be eligible for a tax incentive program. Under this program, the cost of production of qualifying films would be permitted to be immediately expensed -- that is, fully deducted from income for tax purposes -- in the year the expenditures occur. This would be in contrast to current law, where the cost of producing the film is usually recovered over a period of several years. This ability to immediately deduct costs from income will serve as a means of attracting investment capital into production where a portion of the tax benefits will flow through to reduce the cost of the production.

Specifics: 1 The cost of qualifying film and television productions would be permitted to be immediately written-off for tax purposes in the year the expenditure occurs in lieu of using the income forecast method for amortizing the costs of films.

2 The proposal applies only to qualifying film or television productions the aggregate cost of which does not exceed $15 million.

3 A higher expenditure cap of $20 million would apply to productions located in areas eligible for designation as a low-income community or eligible for designation by the Delta Regional Authority as a distressed county or isolated area of distress.

5 Qualified film and television productions would be limited to any production of a motion picture (whether released theatrically or directly to video cassette or any other format); miniseries; scripted, dramatic television episode; or movie of the week. Only the first 44 episodes, including the pilot production, of a scripted dramatic series would be eligible under this Act.

6 To qualify, at least 75 percent of the compensation expended on the production must be for services performed in the United States.

7 Qualified films would not include sexually explicit productions as defined in section 2257 of title 18 of the U.S. Code.

8 These provisions would be in effect for qualifying productions started after the date of enactment and sunsets for qualifying productions commencing after December 31, 2008. The Commerce Department would be directed to report by December 31, 2006 whether the provision materially aided in retaining film productions in the U.S.

-George Caldwell