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State paves way for Hollywood

By Markeshia Ricks April 13, 2009

When Gov. Bob Riley signed a bill that offers incentives to the film industry, he set the stage for Alabama to play a more major role in the industry.

But there are a lot of lines to be written before the state can become a major player.

Behind the scenes, state officials are working quickly to put regulations in place so the state can roll out the welcome mat for film and television production companies.

Lee Sentell, director of the state tourism department, said the state film office and the revenue department are busy putting together those regulations.

"The regulations could be ready by some time in August," Sentell said.

Staff members from the film office also are on their way to California for a location expo where they will get to meet with people in the industry who scout locations for projects.

That's good news to folks like James Chambliss, who have been waiting for years for the film legislation to finally hit the governor's desk. Chambliss is the vice president of the Alabama Filmmakers Association and the owner of Magnolia Land Entertainment, a production company in Fort Deposit.

He said he's hearing from a number of people in the film industry who live outside the state, who are interested in coming back because of the state's new incentives.

"I've been surprised at the number of people that I've bumped into just at the State House while we were pushing for this thing who have family living in California and working in the industry," he said. "Those people want to come home and work here in their home state."

While much of the emphasis of the incentives bill has been on its ability to attract filmmakers from out-of-state, Chambliss said he hopes that the state will keep Alabama filmmakers and production companies in mind as the regulations are being written.

"They've got to be workable," Chambliss said. "You can't just put something together and say 'Here it is.' The film people need to be involved."

Chambliss said it's not for the industry to tell the state what to do, but the industry could help the state to craft regulations that will ensure that movies and television productions will happen in Alabama.

Daniel Wheatcroft, an industry consultant who helped Alabama officials craft the film incentives bill, said working with the industry is key to making sure the state and filmmakers are on the same page.

"At this point, the state should be making direct contact with the industry, particularly the studios in Los Angeles, establishing relationships and sharing information back and forth," he said.

"It's very similar to what we did with the bill in terms of cooperation between the state and the industry. The regulations also should be created in collaboration with the industry and the state agency."

Wheatcroft, who also is the founder and principal of California-based Shoot To Thrill Productions, said drafting the regulations that govern a state's incentives program is a crucial step that can have a major impact on the overall success of the program.

"Where some states fail is that they write regulations that are out of sync with the industry, and even if they write good regulations some of them don't pay those incentives on a timely basis," he said.

Under the incentive act that Riley signed, a qualified production company can receive a tax break equal to 25 percent of state-approved expenses, excluding payroll paid to Alabama residents, and a tax break equal to 35 percent of all payroll paid to Alabama residents.

To qualify for the tax breaks, expenses for a project have to equal at least $500,000 but be no more than $10 million. A qualified production company that spends $150,000 or more for multiple projects within a 12-month period will be exempt from paying state sales, use and lodging taxes.

The state film office and the revenue department will be responsible for establishing the criteria that production companies must meet to qualify for the incentives.

Wheatcroft said Alabama's bill is written conservatively to ensure that it's not flooded with projects that have no outlet and also to make sure that the state is not so overrun with projects that the money to pay the incentives isn't available.

"There is a part of the industry, an underbelly if you will, where people simply make productions they have no intentions of ever distributing as a tax write-off for investors," he said. "We filled those gaps in the bill. Now it's very important that the regulations match what we wrote in the bill.

Wheatcroft said the state is in prime position, and the industry is watching.  "The interest level is way up," he said. "If I had an applause meter, I would say that it jumped way up on the day that bill was signed."

While the focus now is on crafting regulations and getting the $100-billion-a-year film industry to do some business in the state, some in the state are looking toward the future.

Tonea Stewart, professor and chairwoman of the Alabama State University Department of Theatre Arts, said she's excited that the state is finally laying the groundwork for building and attracting the film industry to the state.

But she said the state has to get busy building capacity to support the business it attracts.

Stewart, who also is a professional actress and was instrumental in ensuring that "The Rosa Parks Story" was filmed in Alabama instead of Canada, said the industry will need technical support to be truly viable.

She sponsors a summer technical training program to help young people learn about the business and how to handle themselves in the industry.

"The incentive is a wonderful thing, but we also need to prepare people to handle the job of working with the industry," she said. "We need to be preparing caterers, camera crews, makeup artists."

Stewart said some of the training could be done by professional consultants through workshops, but more concrete programs through the state's two- and four-year colleges and universities will have to come on board.

"It's just like when we brought the Hyundai plant," she said. "There had to be various subsidiary businesses all around it. We need to do something very similar for the film industry."