LFEA Message – Legislative Update and Overview
As you know from previous reports, your Board has spent considerable time, effort, and funds to develop comprehensive legislation to protect the industry and satisfy the state’s need to solve its budget crisis.
The overwhelming majority of legislators did not want to kill or seriously damage the motion picture incentive program, but felt that changes were necessary to help resolve the current fiscal deficit and to sustain the long-term viability of the program by implementing measures to protect against fraud and abuse.
In an effort to generate funds for the current budget year, the legislature voted in the eleventh hour to limit the amount of tax credits able to be claimed to $180M per fiscal year beginning July 1, 2015, making it a REDEMPTION CAP – not a cap on the issuance of credits for new productions. At first blush, this cap worried many of us, but newly released historical data published by LDR shows that the average number of credits redeemed in prior years has been in the range of $180M, so this redemption cap may not be as limiting as it first seemed.
Now that the dust has begun to settle, your Board has turned its attention towards working with LDR and LED to find the most constructive path forward. We are pleased to report that the effort is meeting with much success, as evidenced by a report published yesterday by LED giving an overview of its interpretation of the new law. We are thankful that both LDR and LED seem intent on implementing the law in ways designed to be as positive for the industry as possible. Please go to this LINK to see LED’s current breakdown.
Cameras are still rolling today and much of the uncertainty has been resolved by interpretations from LDR and LED. Plus, new opportunities have been created for indigenous filmmakers, local screenwriters, and local crew, who now have their salaries credited at 40% instead of 35%.
While we have carefully considered mounting a constitutional challenge to the new law, we feel that our time and resources would be better utilized continuing to work cooperatively with LED and LDR and see how things develop over the remainder of the year. We intend to work to elect supportive legislators and to solidify commitments to our industry from all gubernatorial candidates. We expect to be extremely proactive during the next six months and anticipate further revisions to the legislation in the first quarter of 2016 designed to fix any remaining glitches.
We will need you more than ever. There is strength in numbers, and we have the numbers! Almost 14,000 of you signed our petition. If our industry continues to speak with one voice through LFEA, the candidates will not only have to work with us, they’ll want to. Stay tuned – more to come in the following weeks.