Tag Archives: Tax Incentives

Here’s to Our Future, Washington

Motion Picture Competitiveness Bill Signed into Law

By Jessie Wilson, Communications Consultant, Washington Filmworks

FLASHBACK TO 2011:
In June of 2011, the Motion Picture Competitiveness Program sunset, in essence halting five years of significant effort to maintain Washington’s viability on the national filmmaking scene. Efforts to renew the legislation that funds our state’s film incentive program passed the Senate in 2011. Unfortunately, the bill stalled in the House of Representatives and was never called to the floor for a vote.

The sunset of this program was an undeniable blow to our state’s film industry. The Joint Legislative Audit and Review Committee (JLARC), an independent body of the legislature, had recommended the Motion Picture Competitiveness Program be reinstated. JLARC backed program renewal because it offered a return on the state’s investment and effectively maintained Washington’s position in a competitive marketplace. Yet despite significant contribution to Washington’s economy, the bill to renew the Motion Picture Competitiveness Program sunset on June 30, 2011.

The law establishing the program provided that Washington Filmworks could collect up to $3.5 million each calendar year from contributors who were eligible for a dollar-for-dollar B&O tax credit from the Department of Revenue. The Washington Filmworks board was able to gather this amount before the tax credit expired. This enabled the organization to provide incentive funds for 11 projects in 2011.

Knowing that the renewal of the program was uncertain, the Filmworks board developed a contingency plan, which would allow the portion of the program that serves as the state’s film office to continue on a limited basis through June of 2012. After reviewing the organization’s budget, the board took action to reduce staff and all other expenses, while still allowing for meaningful assistance to productions interested in filming in Washington. This also allowed staff, the board, and the community to prepare for another round of lobbying in Olympia the following year.

CUT TO 2012:
Slightly battered, Washington’s film community had pulled itself up by the bootstraps and was ready for take two on the road to renewal. Facing another state budget shortfall, combined with a short legislative session, provided challenges for the program’s renewal. However, the legislature had made it clear that creating and maintaining jobs was a priority. This gave some hope; the Motion Picture Competiveness Program was designed to create jobs and provide sustainable work for the local film industry. Coming to terms with our bill’s underdog status in this economic climate, Washington Filmworks had become a little leaner and meaner. We were officially savvier and determined to keep our supporters informed. As a result, we launched a legislative blog to keep the film community in the fight.

Since the bill had stalled during the 2011 legislative session, it once again landed in the house of origin—the Senate. We continued to have great support from our champion, Senator Jeanne Kohl-Welles (Seattle), but this time the landscape had shifted slightly. The Motion Picture Competitiveness Program passed out of the Senate with an overwhelming majority—40 yeas, 8 nays, and 1 excused.

The bill, now known as 2ESSB 5539, was headed back to the House of Representatives where the bulk of our fight would still lie. We were somewhat anxious at this news, as the bill had been significantly amended in the House Ways and Means Committee the prior year.

Simultaneously, we had reason to feel cautiously optimistic. Washington’s film community was rallying in a way not witnessed in 2011. Washington Filmworks was hearing word that people were taking action, calling legislators, writing letters and e-mails, and visiting Olympia. We were copied on thousands of e-mails to elected officials across the state in support of the Motion Picture Competitiveness Program.

Ironically, as our state’s film community was fighting to maintain their industry, Washington Filmworks’ filmmaking alumni were raking in awards and nominations. 2011 films produced through the incentive program were charming the pants off critics and audiences on the 2012 film festival circuit. Safety Not Guaranteed was a darling of Sundance, where it earned worldwide distribution, while Eden and Fat Kid Rules the World premiered at SxSW, both eventually going on to win Audience Awards. It was clear, Washington had a slew of successes to share with our legislators.

A new rally call was put to the film community. Washington Filmworks asked them to get informed, get involved, and get renewed. We knew we could not pass this legislation without their involvement. By early March, things had intensified in Olympia and the legislative session was slated to end in less than a week. By now 2ESSB 5539 had been declared necessary to implement the budget (NTIB), but Olympia had taken a page from Hollywood’s book and things were starting to get dramatic. On the evening of March 2, the GOP seized majority control of the Senate and passed their own version of the budget. Suddenly we were witnessing rare political and parliamentary maneuvers that had not been seen in Washington for over 25 years.

Was it time to worry? Was 2011 doomed to repeat itself? Washington Filmworks’ legislative team still felt there was a chance to be heard in the House, and the Washington film community had turned up the heat. Calls and e-mails were flooding into legislators’ offices yet again. Elected officials in each district were hearing from constituents in support of the incentive. There was word from Olympia that their voices were being acknowledged, but it was getting down to the wire.

One tremendous hurdle still faced our film community. The bill was referred to the House Ways and Means Committee, where it was amended during the 2011 legislative session. In fact, Ways and Means Committee Chair Representative Ross Hunter had cut the annual funding for the program in half, crippling its effectiveness and stopping the momentum that has been created through the film program. Not wanting a repeat performance, on March 7, Washington Filmworks and members of the community headed to Olympia to testify in front of Representative Hunter and members of the House Ways and Means Committee.

We were prepared for an underdog scenario, and while Representative Hunter was expectedly outspoken, the support from the rest of the room was apparent. The majority of Representatives in the room spoke in favor of the bill and opponents appeared to have become the minority. Phenomenally, before the Committee could vote on the bill, it was pulled to the Second Substitute Calendar, making it eligible to be heard on the House floor.

On March 8, Washington Filmworks and much of our state’s film community spent the day watching the House Floor debate on television. The anxiety was palpable in our office and on our social media platforms. We were fielding questions on parliamentary procedure as other measures came to the floor.  By the afternoon the film bill had not been scheduled for a vote and we knew there were no guarantees one would happen. The House had until midnight to consider any bills, and as day turned into evening, 2ESSB 5539 was still not up to be heard. We could only watch and wait, all the while recalling last year. Would that night’s dinner be the equivalent of a last meal for the Motion Picture Competitiveness Program?

Around 9pm, Washington Filmworks heard word from our legislative team that the film incentive bill would indeed come to the floor. We were glued to our televisions and computers to watch what unfolded. We had done all we could do.

If our strategy had worked, cautious optimism told us to expect renewal of the Motion Picture Competitiveness Program, but the vote would tell the true story. The Representatives began to speak in support of the bill and the legislation was opened to a vote. Our jaws dropped as the number of “yeas” on the tally board rose higher and higher, finally closing with a count of 92 in favor and 6 against.

After 2ESSB 5539  passed out of the House of Representatives, the bill was sent to Governor Gregoire’s office for her signature. It was officially signed on the evening of March 29, 2012, and will become law 90 days after the end of the 2012 legislative session, or June.

A HAPPY ENDING
This legislative renewal campaign had all of the elements of a Hollywood blockbuster, but one made in Washington. The story is born out of the classic underdog plotline. There were definitely protagonists and antagonists, there have certainly been overwhelming odds, and there was undeniably a lot on the line.

When the credits roll, there are many heroes to recognize. None of this would have been possible without the support of the bill’s sponsors, especially Senator Kohl-Welles and Representative Phyllis Gutiérrez Kenney. Washington Filmworks would also like to acknowledge the Speaker of the House, Representative Frank Chopp, who was essential in bringing the Motion Picture Competitiveness Program to the floor for a vote. Watching our industry take ownership of their future has been amazing and we tip our hats to the tremendous grassroots efforts of the film community. It has been an inspiring thing to watch.

Here’s to our future, Washington.

Congratulations, Washington!

Reactions to the Film Program’s Renewal

Members of Washington’s production community poured forth with celebratory—and congratulatory—words about the Motion Picture Competitiveness Program’s hard-fought battle for renewal. Take a look…

I was privileged to be a “Team Captain” working with Washington Filmworks. While the process seemed frustrating and mind boggling at times, it was great learning the political ropes and was such a joy to see the House vote! Now we can celebrate, briefly, then it’s back to work! Bring it! – Gordon Adams, Big Fish NW Talent

Our members look forward to going back to work on the many projects this legislation will provide and we look forward to working with our industry colleagues to use this program to bring many jobs to the state and expand this program in the future. We would also like to offer a very sincere thank you to all the legislators who stuck by our growing industry and voted this legislation into law. We applaud you! – Dena Beatty, Executive Director, Screen Actors Guild, Seattle/Portland

Over the last few years, I have watched our local filmmakers mature into a very well-organized, savvy and creative bunch. Washington has an incredibly talented group of leaders in our film community. Ms. Amy Lillard is an amazing asset. She and Mr. James Keblas are two intelligent, informed, diligent and inspired leaders for our group of businesses, and our state is reaping the benefits from their unique talents. We are thrilled that they now have the tools they need to compete with the 44 other states that have incentive packages. – Peter Barnes, President, Clatter&Din

The incentive is so important in so many ways, but for me, it does the following: Supply me with seasoned, awesome crew that are not forced to leave town for work. My company personally contributes to the incentive with our taxes. We are making money and funding it too. – Sue Corcoran, Director, Von Piglet Productions/Women in Film

When I heard the news about the Washington film incentive passing the House I was in Austin at the South by Southwest Film Festival, where my film Eden was premiering. Eden was shot almost entirely in Washington state, as were two of the other biggest hits of the festival, Fat Kid Rules the World and Safety Not Guaranteed. All three of these films were incentivized by Washington Filmworks, and all have garnered awards and increased the recognition of our state as an amazing place to make films. I couldn’t be prouder to be part of this community, and now that our incentive is back I look forward to building on that reputation for years to come! – Megan Griffiths, Writer/Director, Eden & The Off Hours

I’m thrilled. The signing of this bill now makes Washington competitive again with other states vying for this important industry. This will be a benefit to our local economies and local workers at all levels. With over 40 features shot and produced here in Eastern Washington, I expect we could double that number in the coming years. Washington is such a great place to shoot and produce films with our diversity and variety of locations. It will be great to be back on set. – Rich Cowan, Co-owner, North By Northwest Productions

I just spent two weeks scouting locations in Manitoba and North Carolina to double a location in Washington that we already have. Without the incentive I can’t encourage the investors or producers to shoot here even if the location is perfect. – Jennifer Roth, Executive Producer, The Details & World’s Greatest Dad

As an advocate for Washington’s production community, Hendricks & Lewis is delighted to see the renewal of the Motion Picture Competitiveness Program. This program encourages the production of film, television and commercials in our beautiful state, and is a great tool to win business and keep Washington workers employed. Job well done to the Washington film community for its determination to renew this program and keep Washington State in the movie business. – Caitlin A. Bellum, Attorney, Hendricks & Lewis PLLC

Passage of the Motion Picture Competitiveness Program, Senate Bill 5539, is good news for the Washington film community. The Program administered through “Washington Filmworks” will continue to strengthen the film industry in Washington State by attracting and encouraging investment in film production jobs and economic activity by providing up to $3.5 million in annual tax credits to qualified motion picture and commercial producers through 2017.– J. Bowman Neely, Attorney, Hendricks & Lewis PLLC

Obviously, I’m very pleased that the incentive package passed. I think it is a very important piece of legislation that benefits everyone in the state, not just the film industry. A competitive film industry provides revenues from ancillary services such as restaurants, hotels, rental cars, etc., in addition to the film-related services hired for the production. In short, everyone wins. – Dave Howe, Principal, Bad Animals

This couldn’t be better economic news for Spokane. We have an outstanding, experienced production workforce and we want them working on projects here at home, rather than having to leave town to make a living. The Motion Picture Competitiveness Program ensures that Spokane’s reputation as a film-friendly community will continue to expand and our state will stay on the radar as a great place to make movies. – Jeanna Hofmeister, VP/Director of Destination Marketing, Visit Spokane

 

Representing the NW at SxSW

Several Washington- and Oregon-made films screened at this spring’s South by Southwest (SxSW) Film Festival. Here’s a look at a few of them:

Eden
Seattle writer/director Megan Griffiths’ third feature film made its premiere at SxSW this year—and won three awards in competition. Eden won the Audience Award for Narrative Feature, the Jury Special Award for Performance (Jamie Chung), and the SxSW Emergent Narrative Woman Director Award. The film is based on the true story of human trafficking survivor Chong Kim, played in the film by Chung. Set in New Mexico but filmed entirely in Washington last year, Eden was incentivized by the Washington State Motion Picture Competitiveness Program.

Blue Like Jazz
Adapted from Donald Miller’s best-selling 2003 memoir of the same name, Blue Like Jazz is about a Texas college student (played by Marshall Allman) who flees the hypocrisy of his religious upbringing and lands at “the most godless campus in America”—Reed College in Portland. The film, directed by Steve Taylor, was partially filmed in Nashville and partially in Portland on Reed’s campus. The coming-of-age comedy was picked up by Roadside Attractions and will open nationwide in April.

Fat Kid Rules the World
This Seattle-shot feature, also incentivized by the state’s Motion Picture Competitiveness Program, was included on IFC’s list of “must-see” films at SxSW. Helmed by Matthew Lillard (in his directorial debut) and based on a popular young adult novel, Fat Kid is a coming-of-age story about a dysfunctional teen who rises to the top of Seattle’s music scene. Making its world premiere at the festival, the film screened in the Narrative Feature Spotlight category and won an Audience Award.

1 out of 7
Based on actual events, this film takes you on the journey of a teenage girl trying to escape her abusive mother and in the process finds herself joining the forgotten “street kids” living in the shadows of Portland. The film was shot in and around the city, including at Union Station, back in 2007. Directed by York Shackleton, the film made its premiere as part of SxSW’s Community Screenings program, which offers free film screenings to the public.

Safety Not Guaranteed
In this quirky indie comedy, three Seattle magazine employees (Aubrey Plaza, Jake Johnson and Karan Soni) head out on an assignment to interview a guy who placed a classified ad seeking a companion for time travel. Directed by Colin Trevorrow and filmed in several neighborhoods around Seattle, Safety premiered at Sundance in January and was subsequently picked up by FilmDistrict. The film hits theaters on June 8.

Seattle’s Strong Summer

By Paul Nevius, Communications Coordinator, Washington Filmworks

Despite the uncertainty surrounding Washington’s motion picture tax incentive and the future of filmmaking in the Evergreen State, summer of 2011 represents one of the busiest and most productive shooting seasons in recent memory. Cities around the state played host to four feature-length films that showcased the variety of locations and the depth and talent of Washington’s crew base. To better understand the impact these films had on Washington and how they came to be made in our home state, the filmmakers were asked to share their experiences.

Perhaps unsurprisingly, the incentive was central to the producers’ decision to film in Washington. “We created a detailed tax incentive analysis to compare the film incentive programs in Washington and California, and the Washington Filmworks funding assistance was the winner by several thousand dollars,” said Jacob Mosler, one of the producers of Eden.

Eden tells the harrowing true story of a young Korean-American girl who is abducted and forced into prostitution by domestic human traffickers and comes to join forces with her captors in a desperate plea to survive. At the helm of Eden was director Megan Griffiths, a Washington native and rising star of the indie scene.

The incentive was also an integral part of what attracted producer Rick Rosenthal to Seattle to make Fat Kid Rules the World. Adapted from the novel by K.L. Going about an obese 17-year-old who becomes drawn into the world of punk rock and becomes the drummer of a punk duo, Fat Kid also marks the directorial debut of Matthew Lillard.

Rosenthal, an industry veteran with decades of experience in filmmaking, said, “The incentive was vital. We would not have come to Seattle without it. We would have gone to Portland or even NYC because both have strong incentives that have remained in place. I think it is imperative that Washington bring back the incentive if they wish to stay competitive and stimulate film production in the state.”

Australian director Richard Grey of Mine Games acknowledged that the incentive made filming in Washington possible. “Otherwise we would have filmed in California. The extra costs to bring cast and key crew to Seattle (including accommodation, flights, per diems) were directly offset by the incentive. It made everything possible.”

Filmed in the Ape Cave located in Snoqualmie National Forest, Mine Games is a psychological thriller about a group of young friends who make an incomprehensible discovery in an abandoned mine, but find the more they try to change the future, the more they seal their fate.

The unique scenery in Washington was also a compelling factor in attracting these productions. To make their directorial debut, Scott Moore and Jonathan Lucas, writers of The Hangover, selected the University of Washington, basing their film, 21 and Over, on the iconic Husky campus.

To replicate the look of the American Southwest needed for Eden, producers Mosler and Colin Plank filmed in the eastern part of the state, spending time in Spokane, Ellensburg and Enumclaw.

Mosler noted that the services and amenities for the production were top-notch, even when filming was done away from major production centers. “We were able to house our cast and crew in everything from luxury hotels in downtown Seattle, to cozy independent hotels when shooting in the remote desert. The greater Northwest is truly a land with a vibrant economy supported by strong resources that are clearly reflected on screen and added great production value to our film.”

For Fat Kid, New York City was replaced by neighborhoods and homes in the Ballard district of Seattle. Said Rosenthal, “Great neighborhoods and diverse locations, coupled with a solid local crew and some talented local actors. A plethora of great restaurants—Ballard seemed to be the favorite hangout neighborhood, along with Capitol Hill.”

The Mine Games team had a similar experience. Said Grey, “Locals were very helpful and friendly, crew recommended others, and our Washington team came together very quickly. We found a perfect place to stay at the Red Lion in Bellevue, which catered for all needs. Catering we sourced surprisingly from Enumclaw, and they, too, were very good.”

As the shooting season comes to a close and the features transition into post-production, it is time to look ahead to what the future holds for filmmakers in Washington. Without the film incentive in place, it will be a tall order to bring filmmakers here to take advantage of the variety of locations and the pool of professionals that make Washington their home. It remains to be seen if the Washington legislature will take the steps to ensure that this season is not the last season for making movies here in the Evergreen State.

Washington Filmworks Fights Back

On the night of May 25, the 2011 legislative special session adjourned and it was revealed that a bill to renew the state’s production industry incentive program did not pass.

The bill—which would have extended the expiration date for the Washington Motion Picture Competitiveness Program from July 1, 2011, to July 1, 2017, and increased the program’s budget, among other things—died without ever being brought to the floor for a vote.
“This is devastating to our industry,” said Amy Lillard, executive director of Washington Filmworks (WF), shortly after the announcement was made. WF is the non-profit organization that handles film production support and incentives statewide.
“It’s so competitive out there,” she continued. “Forty-four states have incentives, and without an incentive, your state won’t even be considered for film production.”
Since its establishment in 2006, Washington’s Motion Picture Competitiveness Program has created over $100 million in economic activity statewide, with more than 70 projects—films, television and commercials—receiving the incentive since 2007. According to a December 2010 report by the Joint Legislative Audit and Review Committee (JLARC), each dollar spent in Washington by the film industry was estimated to yield $1.99 in economic return.
Along with its report, the JLARC recommended to the Legislature that the bill be passed, with the following explanation: “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.”

Though fruitless, the JLARC’s recommendation is a significant feather in the cap of the failed bill, officially named 2SSB 5539, which experienced its share of challenges prior to its death in the House.
After passing through the Senate with a 30 to 17 vote, the bill made its way to the House Ways & Means Committee. There, it was amended by Committee chair Rep. Ross Hunter, D-Medina, who introduced an amendment to reduce the size of the program’s fund to $1.75 million per year from the proposed $3.5 million.
Two days later, when 5539 reached the House of Representatives, House Speaker Frank Chopp linked it to a housing and homelessness bill that needed to be passed in the Senate. The housing bill did not pass the Senate, effectively killing the production incentive bill as a result.
It is not clear why Chopp linked the two bills, and Media Inc.’s attempts to contact him for comment went unanswered. However, in an interview with Jordan Schrader, state government reporter for Tacoma’s News Tribune, Chopp said that the defeat of the tax breaks for film production, as well as newspapers and computer servers, was simple.
“There were a lot of concerns about giving tax breaks to any people,” he said, adding, “These things weren’t necessary for implementing the budget, so we ran out of time.”

If there is one positive takeaway from the session, it is the strengthening of the state’s film community. Leading up to the session, the bill received unprecedented support from local production folks who participated in letter-writing campaigns and face-to-face meetings with legislators.
“Traditionally the industry hasn’t been politically active,” explained Lillard. “And while the outcome of this legislative session isn’t what we wanted, we are pleased with the great support we received from our production community. Every time we were in Olympia, we talked to legislators who said, ‘I’ve heard so much about your bill,’ which means our community really stepped up and vocally supported us. There’s a real sense of community here.”
Added Don Jensen, WF boardmember and president of Alpha Cine in Seattle, “We had a lot of support in both the House and the Senate, from legislators such as Senate majority leader Lisa Brown and Jeanne Kohl-Welles, among many others.
“A lot of people told us we had the votes. We just ran out of time.”

The bill’s demise has dealt a major blow to the local production community, which over the past five years has come to rely on the incentive program.
“As a community, the film incentive has helped create a thriving hub for film production,” said Jeanna Hofmeister, vice president and director of destination marketing at Spokane Regional Convention and Visitors Bureau. “(Spokane production company) North By Northwest has produced several movies each year, providing jobs and economic development in the process. In fact, North by Northwest’s most recent production, River Sorrow, debuted at Cannes. That kind of recognition, both for an industry and for our community, is invaluable.”
Hofmeister noted that the bill’s defeat was especially difficult considering that it came on the heels of the demise of the state’s tourism office, which was also cut in the legislative session.
“It felt like a double whammy,” she said. “The tourism and film industries create billions of dollars in spending, and millions of dollars in tax relief for Washington’s residents.  It seems foolhardy to cut programs that generate thousands of jobs and that kind of revenue for our state.”
Though many in the local community remain confident that the industry will survive with or without an incentive program in place, it will be difficult to assuage the impact of the loss and also maintain the increase in business many have become accustomed to since the incentive’s initial passing in 2006.
“The incentive has given us access to an increased volume of high-profile national work, which has been good for my business,” said Peter Barnes, principal of local audio company Clatter&Din. “This additional national work has helped spread the word about Seattle’s talent pool, which, in turn, helps us all.”
Added Dave Peterson, president of Seattle’s Midlakes Insurance, “Over the last few years (the incentive) has helped us compete with big brokers in SoCal for insuring projects in Washington. I have been very satisfied to be a part of the program…
“Hopefully some day it will be resurrected.”

Lillard is optimistic that “some day” will be next year, when Washington Filmworks takes the bill back to the 2012 legislative session. The WF board is meeting periodically to strategize how to best do so, and plans thus far include a grassroots lobbying campaign.
“We’re seeing this as a delay, rather than a defeat,” said Lillard. “Our industry is so interesting in general. It takes time to explain how our industry works, and we’re going to spend time helping legislators understand. We aren’t an industry that fits in a nice box.”
“We need to work to build strong political support,” agreed Jensen. “We already have key supporters, but we just have to keep working to build that base. We have a good shot when we go next year.”
Lindsey Johnson, former production services manager at Washington Filmworks and current managing director at National Film Festival for Talented Youth (NFFTY), said she hopes that the coming year will be used to “re-evaluate what is needed as far as an incentive and film office by working with the film community, legislators and business community to find what would be the most helpful to grow and support a sustainable industry.”
She added, “Maybe even create a new model that is innovative, competitive, and uniquely Washington State.”
In the meantime, it is business as usual at WF.
“We’re in no different shape financially than we would’ve been if it had passed,” said Jensen. “We raised funds in the first six months to keep us going just in case.”
Added Lillard, “From January to June of this year we raised $3.5 million, so we will continue to honor the commitments we’ve made to productions, and we will continue to service the community in a film office capacity—permitting, locations, infrastructure questions.”
With the money raised, WF recently awarded incentive packages to four separate productions coming to Washington.
“We are committed to Washington’s production industry,” Lillard continued. “And we are not going down without a fight.”