DES MOINES — State lawmakers and economic development officials believe a new tax rebate program for movie productions in Iowa would be a sequel in line with “The Empire Strikes Back” and “Terminator 2,” not “Caddyshack 2” or “Dumb and Dumberer.”
Iowa’s former tax credit program for movie projects, which ran from 2007 to 2009, was a box-office flop, panned by critics — including the state auditor, who reported $26 million in funds were improperly issued by the state.
Now, state officials and lawmakers are working on a sequel, which they expect to be far superior to the original.
The new proposal would establish a two-year, $10 million pilot program under which movie projects that film in Iowa would be eligible for tax rebates on specified costs related to the production.
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There has not been a tax incentive program for movie productions in Iowa since Gov. Chet Culver ended the previous, much maligned program 15 years ago — $26 million out of $32 million awarded under that program was improperly issued, according to a 2010 report from former Iowa Auditor David Vaudt.
That misuse resulted in at least seven criminal convictions of individuals involved with multiple movies and the program in the state economic development office, including former Iowa Film Office manager Tom Wheeler, who received a deferred judgment and probation for his role in the scandal.
More oversight
The new proposal received its first legislative blessing Tuesday during a subcommittee hearing at the Iowa Capitol. Among the legislators who sat on the subcommittee was Iowa Rep. Brent Siegrist, R-Council Bluffs, who was in the Iowa Legislature in 2009 when the previous program came under fire.
Siegrist expressed his support for the new proposal, saying the legislation is designed to provide better oversight because of the difficult lessons learned from the previous program’s failures.
“The time before, the bill was, as I recall, pretty well-written, but there just was a lack of oversight. And given the history, I just don’t think that’s going to repeat itself,” Siegrist said after Tuesday’s hearing. “There’s more safeguards in the bill. Plus the reality of history will make sure we’re much tighter with what’s going on. But I think it really is exciting stuff.”
The bill was written by the Iowa Economic Development Authority, which would operate the program, and Renovo Media Group, a media company based in Clear Lake.
Other states
A lobbyist for Renovo Media, Jennifer Kingland, told lawmakers during Tuesday’s hearing that Iowa has been passed over as a filming location because of tax incentives in other states and countries, including for a film about a writer from the University of Iowa Writers’ Workshop.
That movie is “Wildcat,” which is being produced by Ethan Hawke about the life of Flannery O’Connor, who was accepted to the Writers’ Workshop in 1945. That production started filming in Louisville, Ky., earlier this year, according to Variety.
Iowa is among 13 U.S. states that do not have a tax incentive program for film productions, according to Cast & Crew, a financial services company in the entertainment industry.
“It is kind of how that business works,” Kingland said. “We have seen projects that we have been passed over for as far as filming here in Iowa, going to other states, going to other countries.”
Asked about the proposed tax credits, State Auditor Rob Sand, who formerly worked in the Iowa Attorney General’s Office, said in a statement, “Having prosecuted multiple cases from our first disastrous film incentive, I think we can find some more grounded, consistent, reliable ways to build our economy.”
Under the bill, film productions would be able to receive a tax rebate on 30 percent of qualified expenditures. The program would run for two years, in 2025 and 2026. Lawmakers at that point would need to determine whether to extend the program or allow it to expire.
With its 4-1 approval in Tuesday’s subcommittee hearing, the proposal, House Study Bill 731, takes its first legislative step and is now eligible for consideration by the full Iowa House committee on tax policy.