Anchorage Daily News

JUNEAU -- No place in the world is more photogenic than Alaska, yet the state is blowing the scene when it comes to attracting a film industry potentially worth millions to the local economy, a state lawmaker says.

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North to Alaska - 1960

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Mystery, Alaska - 1999

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The Guardian - 2006

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On Deadly Ground - 1994

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30 Days of Night - 2007

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Insomnia - 2002

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Limbo - 1999

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That's why Sen. Johnny Ellis, D-Anchorage, is sponsoring legislation to try to lure movie producers and their dollars -- and halt what he calls an appalling trend of pictures set in Alaska being shot in places like British Columbia and Louisiana.

Senate Bill 230 would grant state corporate income tax breaks of 30 percent or more against amounts producers spend within the state making movies. The bill is scheduled for a 9 a.m. hearing today before the powerful Senate Finance Committee.

Lots of other states offer such incentives to get the cameras rolling, and Alaska is losing out on an opportunity to create jobs and sales for local vendors, said Ellis, the Senate majority leader.

"If I've heard it once I've heard it a thousand times in this Legislature: What we need to do is diversify our economy," he said.

To Ellis and supporters of his bill, it's ridiculous that movies purportedly set in Alaska such as Kevin Costner's Coast Guard rescue drama "The Guardian" and last year's Arctic vampire thriller "30 Days of Night" were filmed not in Kodiak or Barrow, where they were set, but mostly in Louisiana and New Zealand.

For filmmakers to shoot more than just scenery or "establishment" shots in Alaska, the state must match business incentives other places offer to the film industry, bill supporters say.

Alaska is one of only five states without some sort of an industry incentive program despite its picture-perfect tidewater glaciers and majestic mountains, Ellis said.

And other states such as Texas and New Mexico have film offices with up to 11 employees and million-dollar budgets, while Alaska's film office has dwindled to one employee who spends only a quarter of her time fielding questions from the industry, according to research Ellis has pulled together.

The tax breaks his bill would offer wouldn't benefit filmmakers directly. That's because producers typically set up limited liability companies for each project, and these LLCs don't pay corporate income tax in Alaska.

So the bill provides that filmmakers could sell their credits to any Alaska firm with a corporate income tax liability. Here's how it would work: Blockbuster LLC receives a $1 million tax credit from the state for its local costs to build sets, pay actors and haul cameras to locations. The company sells its credit for 90 cents on the dollar, netting $900,000.

Lots of other places have figured out that such incentives can effectively attract some of the billions of dollars movie and TV producers spend annually, Ellis said.

Veteran players in Alaska's small movie-support industry endorse the senator's bill. They're sure it'll work to attract movie spending.

"We think this industry is just going to rocket because of this tax incentive," said Bob Crockett, an Anchorage location scout who is part of a trade association called the Alaska Film Group.

He said studio people in Hollywood tell him it's no longer location that draws producers, it's the cost environment.

Alaska has "an allure, a mystique" that appeals to script writers and filmmakers, said Deborah Schildt, who runs an Anchorage film support company.

"But sadly, they use that mystique and shoot somewhere else," she said. "We really want Alaska to be on the map. We're like an uncut gem, you know?"

Not everyone thinks SB 230 deserves an Oscar.

"This is a film industry subsidy bill," said Sen. Con Bunde, R-Anchorage.

It vexes him that filmmakers who wouldn't owe corporate income taxes in Alaska could nevertheless receive tax credits. And he notes that state officials estimate it would cost about $300,000 a year to run a film office with staffers to "jet around and rub elbows with film moguls."

Plus, he said, the tax breaks would cost the state an unknown amount in lost tax revenue.

Bunde said he also believes the bill's impact might be overstated because Alaska would remain a tough sell for Hollywood filmmakers with its long and expensive plane rides and harsh weather.

As for subsidies, Ellis argues the state gives tax breaks to another rich industry, oil and gas, to try to spur more in-state investment.

Bunde and Ellis agree on one thing, however: Both believe SB 230 has broad appeal in the Legislature and stands a good chance of passage.

Find Wesley Loy online at adn.com/contact/wloy or call him in Juneau at 907-586-1531.

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