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Legislation & Government Relations

IMIN STATEMENT ON VETO OF HEA 1388:

The Indiana Media Industry Network, and professionals in the media industry across the state, are disheartened by the Governor's veto of House Enrolled Act 1388, the production incentives bill. The bill would have made the state more competitive and would have brought hundreds of millions of dollars in additional revenue over time. The bill would also have provided another tool in reversing the "brain drain" of talented people out of the state.

IMIN takes issue with several of the points raised in the veto message, including:

  1. That much of the activity that would be incentivized by the bill already takes place in Indiana. In fact only a modest number of commercials that would already occur would have been affected by the threshold of $50,000 or above, making this a bill that would overwhelming affect new business that would be attracted to the state.
  2. That the bill would not create a single new job or purchase in our state. In reality, the only way that the incentive could be utilized would be if new employment, purchasing and production were to take place in the state.
  3. That the projected fiscal impact of the refundable tax credit would reach $30 million and is too high. The Legislative Services Agency projection would require that over $200 million of in-state production costs occur before $30 million in incentives were to be granted. This would move Indiana from the back of the pack to the top tier of production states. As HEA 1388's incentive is far below competiting states, the projection by the Legislative Services Agency has been highly inflated and does not represent a true assessment of the fiscal impact to the state.
  4. That the bill became a "Christmas Tree" of benefits for the production industry. In fact the scope of the original bill was reduced by the Senate, and represented a much more modest incentive than those adopted in the top tier of states that have enacted incentives. Had HEA 1388 become law, Indiana would have moved from its current position of twenty-eighth to between thirteenth and seventeenth in the nation, by industry standards a respectable level of incentives but far from being excessive.

Governor Daniels indicated that he is concerned about oversight by the Indiana Economic Development Corporation of the incentives, and does not wish to incentivize existing industry, both valid concerns. IMIN is committed to working with the Governor, the IEDC, and other offices of state government to resolve these issues, and we will continue to advocate the value of this industry to the members of the Indiana General Assembly.

HB 1388 Legislative Summary

HB 1388 - Final Version
  1. Changes rebate to a refundable tax credit - if the credit exceeds the State tax liability of the production company, the State writes the company a check.
  2. Reduces the percentage from 25% to 15% for productions under $6 million and up to 15% for productions over $6 million.
  3. Sets a $100,000 floor for film and television production and a $50,000 floor for digital, music, commercial and corporate productions.
  4. Establishes a cap of $5 million annually for projects with in-state spending of over $6 million.
  5. Requires that a production company file an Indiana tax return for up to five years, provided that the company continues to receive profits.
  6. Extends the waiver of the sales tax to digital, music, commercial and corporate production. Projects may take the refundable tax credit or the sales tax waiver but not both.

READ THE WHOLE BILL: http://www.in.gov/apps/lsa/session/billwatch/billinfo?year=2007&session=1&request=getBill&docno=1388