5.18.2011 Legislative Alert

May 18, 2011
We continue to lobby in Olympia in support of SSB 5539; the legislation to renew Washington's Motion Picture Competitiveness Program.  We want to share with the film community a letter written to State Senators by Washington Filmworks' Board Chair Becky Bogard.  We anticipate the bill will come before the Senate for a full vote in the near future. We will keep you informed as things progress in Olympia.

Dear Senator,
I am writing to you as the volunteer chair of Washington Filmworks (WF) asking you to support SSB 5539.  WF is the private non-profit organization that manages the Motion Picture Competitiveness Program, formed pursuant to the 2006 law establishing a tax credit to stimulate motion picture production in Washington State.  Additionally, WF took over the activities of the Washington State Film Office when the legislature eliminated funding for the office in 2008.  Under the terms of the original legislation, the program is due to sunset on June 30, 2011.  SSB 5539 extends the program until June 30, 2016 with no increase in current funding level of $3.5 million per year.
There has been a lot of discussion this legislative session about repealing and reviewing tax incentives.  There is no doubt that all tax incentives need to be reviewed to ensure that they have created jobs and have allowed Washington businesses and workers to maintain their competitive position. The current Motion Picture Competitiveness Program has not only been reviewed and received a positive recommendation from JLARC but it has demonstrated that it meets the other tests of tax incentives.
A December 2010 JLARC study recommends:
"Because the tax credit for contributions to the Motion Picture Competitiveness Program is achieving the objective of maintaining Washington's position as a competitive location for filming, the Legislature should continue this preference and re-examine the preference at a later date to determine its ongoing effectiveness in encouraging filming in Washington State."
The JLARC report further finds that the program has created over $100 million in economic activity statewide in areas including Seattle, Tacoma, Spokane, Bellingham and the Olympic Peninsula. The JLARC report also cites that companies working exclusively in the film industry provided 1,629 jobs in Washington State in 2009 and that between 2009 - 2011 funding recipients created 2066 jobs.  In 2010 (a year not analyzed by JLARC), producers' reports submitted to WF indicate that funding recipients provided 1155 jobs in one calendar year. Without the renewal of this program the state will lose the economic impact and the family wage jobs created by the motion picture industry.
While the original legislation has some provisions concerning reporting, we realize that the information reported by those who receive the incentive needs to be expanded.  In fact, in section five of SSB 5539 there is a provision for better accountability. That said, the JLARC report cites reporting deficiencies for the program were with the production surveys filed with the Department of Commerce, NOT Washington Filmworks.
Under our existing program WF has adopted a rigorous and thorough review process that requires each production receiving funding assistance to provide:
·       A full line item budget detailing all Washington expenditures (including the vendor name, date of expense and total amount)
·       Invoices and Receipts for all qualified expenditures
·       Proof of payment on a percentage of randomly selected Washington expenses
·       Declaration of residency forms and proof of residency for each Washington based cast and crew-member
·       Proof of payment for health and retirement benefits
I want to assure you that as Board members we are very cognizant of the need to provide accountability.  I would invite any of you to visit our office to see the kind of information we require of companies receiving incentive funding.
The Washington State Film Office was defunded two years ago and the functions taken up by WF.  Over the past two years, WF has become the first point of contact for statewide film business serving as the marketer for attracting the film industry, a clearing house for securing local and state film permits, and managing the production incentive program. If WF is allowed to die because the incentive program is not renewed, there would be no resource for filmmakers who are shooting in Washington state.  All of the activities listed above would continue to be accomplished within the current funding level.
As a personal note, I want you to know that one of the things that those of us involved with WF are most proud of is that our film incentive is the only one in the nation that requires productions pay health and retirement benefits for film workers.   This has caused us to disapprove some applicants because we believe so strongly that providing these benefits are part of providing family wage jobs in this industry.
I know that voting on tax incentives is difficult in this session where there are so many needs. Unlike other larger tax incentives, we are in the unfortunate position of expiring if the Legislature takes no action.  I ask that you review the success of this program and vote to continue it.  It stimulates the creation of jobs with health and retirement benefits for Washington workers and maintains the film industry in this state.  Without the incentive, we will go the way of post Sleepless-in-Seattle and continue to see Canada and other locations portrayed as Washington State.
Thank you for your attention.
Becky Bogard