Georgia’s legislative session has concluded, burying with it a tortured bill on tax credits for state television and film productions — much to the relief of Hollywood, independent producers and Georgia soundstage owners.
“Georgia is open for business and continues to be a premier destination for film and television productions. After much study and debate, the General Assembly has maintained a tax credit policy that has served the state well, and is working exactly as intended,” said Kelsey Moore, executive director of the Georgia Screen Entertainment Alliance. .
“We appreciate the leadership shown by Gov. Brian Kemp, Lt. Gov. Bert Jones, Speaker of the House John Burns, and lawmakers from both parties on this issue. “Our state leadership has sent a clear statement, literally around the world, that Georgia strongly supports the film industry,” she said in a statement last night.
The bill’s failure is not a huge surprise given Georgia’s thriving production industry. What was unexpected was that the bill was revived at the last minute and came down to the wire. HB 1180 was introduced in the Senate earlier this week after a sweeping review that “irked people who liked the hat, and people who didn’t like the hat,” one person said after the debate. It was “a bill that was highly undesirable to both sides of the issue.”
It resurfaced as “Frankenbill” (combined with tax breaks on low-income housing for the disabled, and the creation of a special data center energy planning committee) in a last-ditch effort that fizzled. This latest version was more similar to the first, which caused a great deal of concern in Hollywood by capping annual tax credit transfers – to 2.5% of the state budget – or about $900 million at current levels. In the bill passed tonight, the cap would only be triggered if the state finds itself in severe financial distress, specifically “in any calendar year following a fiscal year in which funds in the revenue shortfall reserve are less than 10% of the balance sheet.” . Net revenues for the prior fiscal year.” This was supposed to be a rare event, but how rare it was and how often it happened was not clear.
The version before that one had essentially eliminated the cap by excluding the state’s largest sound stages and productions filmed there, creating a two-tier system that many lawmakers disliked. But in the end, neither version of the bill received enough support to pass.
The General Assembly meets again in January, at the start of a new two-year legislative session, which will require a new bill from scratch.
It will never be easy. Lawmakers two years ago tried and failed to pass a bill that would cap the incentives and make them non-transferable.
Film and television production in Georgia creates jobs and economic impact. According to poll results published yesterday by FGS Global on behalf of Moore’s Georgia Screen Entertainment Coalition, eight in ten likely voters in the state say the film and television production industry has a positive impact on Georgia’s economy, a sentiment shared by three-quarters of likely GOP voters. Primary voters. The company interviewed 1,000 likely voters, with an “oversample” of 300 likely Republican voters. Generous tax breaks have attracted an influx of projects that have made the state one of the world’s top production destinations.
But tax credits also squeeze revenue, and an unlimited tax credit like Georgia’s gives the state little visibility into the hit from year to year, according to sponsors of the original bill, which set an annual limit but allowed credits above the cap to be sold in The following year. Most credits in Georgia come from out-of-state entities that can’t use them, so they transfer them or sell them to local businesses or high-net-worth individuals in what has become a booming market.
The bill’s sponsors insisted that the annual limit was not punitive, but merely a way to give the state some predictability. Critics warned that it would create uncertainty and discourage production, which would be a major problem for the state as the local crew base and infrastructure have been greatly strengthened to serve the industry. Their voices triumphed.