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Spring 2011
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Arizona Film Bill Status
Friends of film in Arizona –

The road to a successful AZ Film Incentive Program has been a long and arduous one, and now the journey is going to be even longer. Our bill, SB1159, stalled once again (this happened last year too) in the AZ House of Representatives. SB1159 will not be heard which means no AZ film incentive program.

SB1159’s fate was sealed last week when the Speaker of the House, Kirk Adams (who killed our incentive bill last year when he wouldn’t allow it to be heard on the floor of the House) finally assigned SB1159 - after much pressure from the production community and bill stakeholders - to the House Ways and Means Committee. The head of that committee, Representative Jack Harper, then refused to allow his committee to hear the bill.

Below is the e-mail from Rep. Harper explaining why he wouldn’t allow the bill to be heard. His e-mail includes a link to an Anti-Arizona film tax credit video that has been circling at the legislature. It will give you a better idea of the opposition we’ve faced. It’s obvious that the bias is against tax credits in all forms.

When we knew the bill wouldn’t be heard, a Plan B was implemented – find a "striker" bill to attach SB1159 to and ask that the striker bill be assigned to a committee, but the Speaker, Kirk Adams, did not assign the bill to a committee. So, like last year, our bill, after passing through the Senate, died in the House.

I know this news is discouraging, especially to those whose livelihood depend on this industry, but it’s important to take the high road when dealing with our opposition. We will need their support when we go back with another bill next year. So please communicate your thoughts to them with respect. Use facts and your own experience. Don’t forget to thank those who supported our bill - you can find their names here. Several of these senators were against SB1159 bill earlier this year, but they changed their minds once they understood that SB1159 was about jobs and an 8% return on the state’s investment.

It’s exasperating to have this vibrant industry – one that offers thousands of high wage jobs, millions in economic impact and the potential for unprecedented international exposure – at our doorstep and to have to turn them away because we lack incentives that New Mexico and Utah (which just increased their rebate) have. In fact, now that the bill has died, Tucson will most likely lose the biggest studio motion picture production Tucson has ever seen. The studio, encouraged by the prospect of a new AZ incentive program, was so serious about filming here that they spent a week with us scouring southern Arizona for potential locations - several of which the director loved. If Tucson was chosen as their base, they would have started working here in November and would have stayed for seven months -now that scenario has most likely reached a dead end.

Our Arizona production community doesn't give up easily. We will keep moving forward...

Subject: Harper Removes SB1159 from the Ways and Means Committee Agenda.

http://www.youtube.com/watch?v=e_dXe5rRqMg

SB1159 Multimedia Production Tax Credits, will not receive a hearing in the House of Representatives.

Despite years of pointing out to the proponents that "refundable tax credits" and "transferable tax credits" create a financial incentive for the recipient to NOT do what they promised or the public expected, they have brought yet another multi-million dollar loser to the State Legislature. When a tax credit is transferable, whatever part of the credit the recipient does not use against their state tax liability, they can sell (transfer) to another state taxpayer to write off against their tax liability as well. When a tax credit is refundable, whatever part of the tax credit is not used against the recipient's state tax liability, is refunded from the state general fund. Refundable Tax Credits are likely unconstitutional under the gift ban in the Arizona State Constitution. In both cases, refundable and transferable tax credits create an incentive for the recipient to do as small of a project as required in the law and then sell or redeem the remainder of the tax credit. The Arizona State Legislature and the taxpayers of Arizona have fallen victim to these schemes in the past.

Had SB1159 had an up or down vote in the House Ways and Means Committee on Monday, it is widely believed as of Thursday March 17th, 2011 that it would have failed on Monday. Rather than risking that committee members would endure a weekend of coercion and possible attempted bribes, I have arbitrarily decided to remove SB1159 from the agenda and end the proposal for the year. When one business stands to gain $35 million to $50 million in a single piece of legislation, felony quid-pro-quo's are bound to materialize.

I offer my apologies to the sponsor of the bill, State Senator John Nelson. He did not know of my intentions or concerns about the proponents of the bill.

State Representative Jack Harper
Arizona House of Representatives
(602) 926-4178


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