ALC-Executive Subcommittee
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Representative Les D. Eaves
Unverified
0:39
members if you could go ahead and grab a seat we're gonna get this meeting of executive subcommittee called to order members we're still working to get the motion picture folks online to for that presentation so for now we're gonna skip item B and move down to item C it's consideration of an emergency rule by Department of sharered
administrative Services we have Mr Grant Wallace or Jessica Patterson? OK.
Morning you would just when you get sat down hit your button and introduce yourself for the record and then you can tell us about your emergency rule. Working now is yours on
Senator Terry Rice
Unverified
1:50
OK you're good now Hello Grant you're on now right Grant Wallace director of employee benefitnefis and office
Speaker 27
2:14
of property risks. Jessica Patterson, chief legal counsel for shared administrativeervices and director of the office of state procurement.
Speaker 12
2:22
go ahead and present your your rule. so the
Senator Terry Rice
Unverified
2:25
emergency rule you have before you really is just putting into rule the kind of operational aspects or early days of the captive program it delineates claims that were prior to July1st,2025 and how those are going to be treated and then the ones that come that came after July 1st how we were going to treat those. The first section dealing with mitigation
services obviouslyviously in some of these instances we don't want to delay in being able to stop further damage from being done so this just gives us the ability to allow mitigation services to be done quicker than just the normal procurement process and I'll let Jessica kind of speak to that if there are any questions on that but with that be glad to answer any questions all right senator reich you're recognized
thank you fellow Grant Jessica good to have you here today in the rulemaking deal I would
just point out the cause of something that I'd heard of on the one of my local school systems is to keep in mind you talked about mitigation and and you know you gotta get some stuff done sometime but sometimes when there is a dispute some can be vastly on whether it's hail damage or not hail damage how much and all I just asked to keep in mind
what a process would be to allow some fair way to be able to do that for for the school systems there's always that between insurance companies and others but there there needs to be a fair dispute and and there are additional rules, more permanent rules that are
coming in that would probably be appropriate place to address those issues you yes sir thank you senator members any other questions Miss Patterson
Representative Les D. Eaves
Unverified
4:23
do you have anything to add to that or are
Speaker 27
4:28
you good? no unless there are questions I'm happy
Representative Les D. Eaves
Unverified
4:33
to answer them but all right seeing no other questions without objection to the proposed emergency rule is reviewed and approved and the review and approval shall be effective upon adjournment of legislative council meeting this Friday, August 15th. thank you guys members next that takes us to consideration of an emergency rule for the department of Corrections we have Miss Elaine Lee, Miss Tony rowell and Mr Trent Rigdon.
if you would just introduce yourself for the record and you
Speaker 26
5:18
can begin presenting your rule. I don't know why that one's not working.ry one of the others right there we go. Good afternoon chief legal counsel Department of Corrections Tony rowell so we have in front of you and proposed amendment to the rule
that is promulgated by the Arkansas Sentencing Commission that sets out which offenses are required to serve 25 and50% of their sentence. y'all passed quite a few criminal offenses this legislative session of those only two went on to the50% list. one was fleeinglas A and the other was coerced abortion by fraud that brings up50% list to26 total offenses. The remainders all went on that 25% list. there's408 total on that
now fleeinglas A, the class B felony is actually 100% so that one's on the50% until this body has an opportunity to decide whether they want that class A to be a 100% or not this is actually should result in a net savings to the state just because the rule as it was drafted two years ago provides that if an offense is not set out as a50% or 25% in the rule it automatically defaults to a50% as you know one of the charges of the sentencing commission is the efficient utilization of state
correctional resources so that's just what this does and as soon as it's
Speaker 42
6:37
ready to go then we can push forward with permanent promulgation. and I'll take any questions members any
Representative Les D. Eaves
Unverified
6:42
questions right ing un thank you for your testimony members without objection this proposed emergency rule is reviewed and approved and the review and approval shall be effective upon adjournment of legislative council meeting this Friday August 15th thank you. members that takes us to
item E it's consideration of an extension of the publishing and editing of statutory materials agreement betweenblr and Matthew Biner. I believe we have Miss Jill Thayeryer and Kevin Coon. you get it thank you. i ll therehayer bureau of legislative
Speaker 48
7:29
Research. Kevin Coon Bbureau of Legislative Research thank you
Speaker 50
7:36
so you should all have in your packets a copy of a publishing and editing of statutory materials services agreement. this is the bureau's contract with Lexxis for the publication of the statutes the code and the current contract that we have expires this December. The code revision commission at its last meeting authorized the entering into the automatic renewal term that starts upon
expiration of this contract. The contract provides for two automatic renewals but because it is a contract that Marty will have to sign and and has to continue. we need legislative council approval. so the code revision commission gave that recommendation for approval and now we just need the same from y'all if that's your desirre we'll answer any questions that you may have. thank you for
Representative Les D. Eaves
Unverified
8:28
that members any questions on this Marx seeing none, I'm gonna need a motion to approve the motion's
second any discussion all those in favor signify by saying aye posed guys haven't disproved thank you that takes us back to the top right we're still waiting on the motion picture folks to sign on yeah members if you would we're gonna skip back down to item F and Marty has an announcement that you need
Speaker 55
9:03
to hear. back in 2019, Senator Dising
and thenpresentative dotson along with the legislature passed an act creating the code of Arkansas rules. it was assigned to the Bureau of Legislative Research to create a website and a program where all of the agency rules were going to be housed on one location this was an enormous project but when you talk about good government this is good government we had agency rules that could be found in someone's drawer. you know they were old rules on agency
websites our staff has worked for the past6 years to create this website. it's a lot of tears and efforts and I actually have to thank the governor's office as well as the s agencies for working with us to create this so it is up and running as of January 1 and this last week I believe at the administrative codes and registers conference our program and our website received theRobert Colburn Junior innovation Award for our code
of Arkansas rules and it's a really a big honor and I have to thank my folks for doing really just an immense amount of work Isaacynham, Rebecca Miller Rice we had a huge a team of editors and attorneys that put a lot of effort into this program and and again I can't overstate what an impact this will be for the citizens of the state of Arkansas this is a whole lot of transparency for agency rules in one location so you just want to let you all
know this is good stuff. So Senator Disanging was asenate sponsor I didn't want this but we got
Representative Les D. Eaves
Unverified
10:48
it Thank youmarty that's fantastic we sure all of us I know appreciate the hard work thatblr does on our behalf so thank you very much Senator Desming also thank you for your foresight in this'm grateful all right thanks marty right members we have the motion picture folks signed on now so we'll get back up to
the agenda item B we have miss Missina Sadler
and Mrira Sadler excuse me and Mr Leon Ford I get it right ? lo se
Speaker 63
11:18
you did thank you chair and and you're recognizing and go ahead and present thank you I'm not going to share any slides I'm just going to speak for a couple of minutes and then
Speaker 66
11:31
be very glad to take any questions. so our company Osberg SBI was retained by the ureau of Legislative Research to undertake a study on the Arkansas digital product and
motion picture incentive which we delivered and the full study is is now online it's it's a pretty detailed piece of work so I'm I'm just going to pull out some key findings and numbers for you today. just a quick word on scope the the study we were asked to look at the economic impact of the digital product and motion picture incentive and make a set of recommendations around the structure the administration and other elements with a view to helping ourkansas maximizing
future economic contributions of of the screen production sector. a quick word about context what we found and and ira and I spent some time in state both in LittleRock and and Northwst Arkansas we found that the the state does have a small but but lively industry for screen production but it has struggled for a struggle for consistency and and part of that is about larger macro factors coming out of the COVId-19 era
the the the the investment in screen production is recalibrating but a big part of that inconsistency was the the state incentive which is is currently not optimal in terms of its structure or in terms of its budget it runs with an annual system budget of around4 million dollars which is significantly lower than Arkansas's neighbors and significantly neighborig states I should say and significantly lower than some of the
competitors and just a flag that these these sort of automatic incentive systems film and television are very widely used. there's about 120 of them globally and there's a lot of competition for screen production dollars. so to to have a system that is is has a very low budget and is fairly unpredictable in how that is funding is funded is is is not optimal. We did find there is an opportunity to build a more stable sector which I'll
come on to just to flags and numbers for you. we looked in our economic work at fis cal year2014 up until fiscal year 2025 to date and what we found was that through the Arkansas cash rebate and the tax credit model the state had invested about $19.7 million over that time we used the state outlay to estimate qualifying production expenditure which which isn't
tracked the state only tracks the the amount it invests in these productions but we were able to use the incentive rates to estimate qualifying production which we found to be about $94 million over the fiscal year 2014 to2025 period. So almost $20 million invested by the state and almost $94 million in qualifying spends to flag a couple of key economic impact numbers and if you are interested in these
numbers we that there's a lot of detail in the full report but to pick out pick up three overall metrics which combines all channels of impact so direct indirect and induced we found that the incentive had delivered or production spending going through the incentive had delivered just over54 million dollars in total GVA between 2014 and2025. and in terms of
GVA return on investment that was about3 dollars62 s in value created for every dollar spent in job terms, film and television production is is is largely a freelance largely freelance workforce so we look at full time equivalent jobs and we found that the peak average over the time frame that we were looking at was about600 full time equivalent jobs in fiscal year 2018 which was a a
the busiest year in terms of film and television production in state and a kind of model of how many jobs could be created if if Arkansas was to keep attracting production at that same level which it it isn't consistently and then just finally before questions we were asked to set out a number of key
Speaker 63
16:10
s and we'll I'll pick up on four very briefly the the key one coming out of the study is
Speaker 66
16:22
around the incentive as I say these are key sectoral development tools for screen production and the Arkansas model is is not competitive it has a it has a low cap4 million dollars and has not been consistently funded creating some uncertainty in the state. Our recommendation is that Arkansas considers expanding this this tool if if if the state wishes to to expand the screen production sector and we think a sort of 20 million
cap rather than a4 million cap would enable a sort of meaningful change in you know building the size of the industry and creating a more consistent production industry annually and we include some sub recommendations there around the type of incentive and some provision for the lower budget projects that tend to film in Arkansas we also recommend a cohesive industry development strategy
alongside any expansion in the incentive in in doing our consultations in state it was clear that the industry is fairly unconnected and fairly uncohesive so having a a strategy that builds the industry if if a new tool like the incentive is expanded having a a sexual development strategy would be important and then finally on the film commission and on data the film commission when we were doing our study was
a one person office which did not compare favorably in in personnel terms with Arkansas's neighbors who have similar offices but but more staff to operate them and we recommend an an expansion of of that office and more industry involvement to ensure that it it has the resource to take a more proactive role in in building the sector and then finally on data that you know one of those la there's issues behind the lack of cohesion that we found was that
people there was a lot of uncertainty about how much incentive investment might be left in any given year. what the usage of the incentive looked like what what the production throughput in state looked like and that that was limiting for for workers in the state who were unsure where they could find opportunities. so again a recommendation around improving that data size as I say very very quick headline results from the study which is now fully online and be very
glad to answer any questions that you
Representative Les D. Eaves
Unverified
19:02
may have sir I have a quick question. I'm looking at some of the charts in here and you've got Arkansas comparing to Oklahoma, Texas, Louisiana and Mississippi can you give me some idea I think we're all aware that Georgia has a pretty robust film industry where how does Georgia compare to the states that you have shown in these
Speaker 63
19:23
charts yeah it's it's a great question and we we've undertaken an an
Speaker 66
19:29
economic impact study of the Georgia state incentive. I mean it's it's very much one of the largest if not the largest incentive models in the United States. it's an uncapped model which means that the you know the the amount of incentive or the amount of tax credits has has no caps so technically the the industry can service an unlimited amount of production and because of that we've seen a large amount of investment in in infrastructure
like studios and a lot of a lot of crew growth as well but as we say in the report that's that's not the only approach that we see in in other states you know many of the the the the ones we found that similar to the the Arkansas level do have caps which enables the enables the legislature to control the annual investment that they're making into this industry and have a sense of how much is is going to be spent on that investment
Representative Les D. Eaves
Unverified
20:33
do you have any sense of what sort of economic activity that means to Georgia the way they do it in terms of dollars we do
Speaker 63
20:42
have those numbers'd I'd need to I'd need to pull them out of our files but I can it's it was a public report
Speaker 66
20:47
that that we undertook in Georgia so I'd be very happy to circulate if you don't mind send that to staff and we can get it to
Representative Les D. Eaves
Unverified
20:54
the membership. all right thank you cochairgilmore you recognize you
Senator Ben Gilmore
Unverified
21:06
So I'm looking at page 92 where you have some findings and recommendations and and perhaps and I'm sure there's going to be other questions related to this so I'm not gonna ask you to belabor it a couple of things there that give me concern so I'm sort of wanting to examples perhaps where you talk about lack of clarity, transparency, cohesiveness strong words what can you elaborate on what led you to that?
Speaker 63
21:38
so a few things I mean on the lack of clarity side what
Speaker 66
21:43
we found was and this is particularly relevant when we're thinking about investors or producers coming to ourkansas or looking at Arkansas with a potential investment in a project generally the first thing that the producer like that will do is they will have a long list of potential potential production destinations usually based on creative elements you know the story, the setting, the
locations and you know always including an analysis of the cost base and the incentive and what we found is that when when those producers were looking at Arkansas you know the fact it's funded by the governor's quick action closing fund there's real uncertainty around is is money available for this production right now and you know if you think about the financial risk that that a film or television production involves you know many millions
of dollars you know in in productions going to Georgia you you know sometimes talking about hundreds of millions of dollars that risk becomes unpalatable for those producers and leads them to choose jurisdictions that are that are more that are clearer that are more sort of stable in in that information and even within the just small incent ive funding that that Arkansas has we found that the sector often you know 11 key issue is that
they often had no understanding of whether there was any money left in in in the funds for that year whether it could fund more production service more productions so just that that lack of knowledge and certainty about the incentive side was a very a very
Senator Ben Gilmore
Unverified
23:35
significant problem and then I think the last finding there where you mentioned
limited level of of interest as
what what kind of data so speak to that if you would where you've talked about published data is
Speaker 63
23:53
limited what should there be available? So I think yeah this is this was a key recommendation and I think the the lack of information here is around some of the incentive processes
Speaker 66
24:05
so there's some technical elements to that recommendation which is some people would just unclear in practice how certain
Speaker 63
24:12
elements of the system worked but then also
the sector itself you know some of the people some of the sort of stakeholders we spoke
Speaker 66
24:21
to were uncertain what productions were coming in you know we we spoke to a lot of crew members who often only found out about you know productions when it was too late for them to be connected with potential job opportunities. and and there's always a bit of a dance there because productions like to you know for their intellectual property they they don't want to announce that they're going to be filmed but we do see in some
other jurisdictions are much more proactive sort of data and publishing of information to alert the sector that this production is coming in3 months and is is crewing up here's who you can contact if if you're interested and that that wasn't necessarily happening as as much as we thought it could have in in Arkansas. Thank you umpeaker Evans you're recognized
Representative Brian S. Evans
Unverified
25:20
thank you Mr Chair. over the last two or three weeks I've had the opportunity to visit with some legislative colleagues
from other states in in the southeastern part of the United States who have very robust film programs and I see in your packet you your firm has been doing this for north of30 years so a lot of a lot of experience how often with the states that you've worked with has it been your recommendation
to move the film office out of economic development into parks and tourism because the states that I talked with theirs is in economic development so curious as to why the recommendation here was
Speaker 63
26:05
to do that yes thank you for the question and there's a number of reasons for that. I think again going back to the the the sort of resourcing and the cohesiveness point that we were talking
Speaker 66
26:22
about. I think that the natural home for film commissions is often economic development because you know incentives are economic development tools. I think what we heard you know we spent time in state talking to some of your your legislative colleagues about the the sort of economic strategy for Arkansas on a more general basis and heard a lot about the visitor economy and the the growing you know the growing tourism
sector in Arkansas and it felt to us that this could be an opportunity to revisit whether a different department would be more suitable for the the aims of building the the film production sector and as I say that's that's set against the context which is in the years we've been talking about the the aim of the incentive which was to expand the industry had not really happened so we were looking at options to try
and drive that change and considering the the department in which you know the key film commission agency is is
Speaker 84
27:30
housed within was one of those options. So it's it's if I understood what
Representative Brian S. Evans
Unverified
27:35
you're saying it's not necessarily you're always your recommendation to do that you just find Arkansas to be unique to where it's better suited to move it there yeah it's
Speaker 63
27:46
certainly it's not you know all of our work
Speaker 66
27:48
in in you know in each state or jurisdiction we work in is
completely bespoke to that it's it's not a kind of standardized recommendation by any means. I mean if if we do this type of work in any jurisdiction we'd look at the formulation of key offices which we
Speaker 63
28:08
did in this in this instance and and yeah I think on an international basis these
Speaker 66
28:13
these officers tend to be economic development more frequently but also you know tourism and some other departments as well but yeah this was a specifically
Representative Brian S. Evans
Unverified
28:25
Arkansas consideration I may have missed it in the in the report but in the conversation I had in other states it may be the same thing just different terminology that we speak here versus what they speak there but you you can you mention quite often the incentive and if I understand it the incentive that you're recommending here is a tax credit buyback but other states that I've talked with talk about a rebate
is that are is there a difference is that the same thing just someone's terminology
Speaker 61
29:03
is different than others in in part yes
Speaker 66
29:06
and I Id we'd be very happy to share we have some literature on the the verbiation how how things differ but in in general terms the film and television incentives on a global basis are structured in sort of two headline ways one
is as a cash rebate which is the production undertakes the spend and the jurisdiction refunds a portion of that cash for that production cash that that was hit in the you know that was dropped in the economy and that that happens after after an audit and after after checks that you know each item of spend is eligible and has been undertaken the other the other sort of main grouping is around tax credits and actually these are much more common in the United States than
rebates and sometimes people call tax credit rebates but they are technically tax credit based models where the jurisdiction instead of handing out a you know instead of cutting a check from the the legislature's budget or the government's budget it supplies a tax credit to the production and that can either be monetized through selling it so that this is how Georgia works the producer there will sell the credit to a
taxpaying entity had a reduction on the dollar and that way the the the government the state government is paying for the incentive through foregone tax revenue rather than cash and the other the other option which is less common is a refundable tax credit where this is similar to a rebate where the the producer will give it give its credit to the state or the the government and receive a a rebate on that tax credit. what what we've specifically looked at for Arkansas again we we recommended
a tax credit model and specifically a transferable tax credit model in you know from the logic that the the cash rebate model that Arkansas has had has not functioned in building a sustainable industry. so in our view isn't isn't a good bet for the future for building a sustainable industry so we looked at a transferable tax credit which could expand the overall pool of incentive and be funded by foregone
revenue rather than hash from the government which has proven problematic what we did hear a lot from the sector is that a lot of low budget work is made in Arkansas and those producers and investors were very nervous about the additional costs involved in a transferable tax credit. so we recommended a a a sort of a buyback clause if you like where rather than selling it to a third party, the producer of certain low budget
material could sell it back to the state at a at a kind of named discount model. so that's that's the that's maybe going into too much detail and I'm happy to send some literature that we have on
Speaker 88
32:16
this but that that's the general picture and the specific recommendation. My last question Mr.
Speaker 89
32:22
Chair and and council staff can probably clarify this but I'm curious as how this has worked
Representative Brian S. Evans
Unverified
32:28
in other states going back I meant to ask this on the first question in regards to running these
projects through economic development I would think in most states that that would give the state foia protection if you're negotiating on a really big film project for your state I would think that the film industry would want that you know they wouldn't want everybody to know that they're about to come to Arkansas and film a a big project and someone run ahead of them or so forth but I'm not for certain that under parks and tourism that that same protection would be
there so have you seen that in other states where maybe production companies were hesitant to go into a state with a project because they might not have foia protection as they would here under economic it's a really interesting question I'm
Speaker 63
33:23
not sure I have to be honest. I think I think productions you're you're completely right production's you know do you
Speaker 66
33:33
want do you want secrecy and that's
largely you know for the for the larger productions that's about the intellectual property and keeping keeping the value of what's going to be in that film or TV show keeping it under wraps so that when it hits the marketplace it's new for people and it it hasn't been you know trailed six months earlier when everyone everyone saw you know paparazzi pictures of the stars or whatever. I mean so
Speaker 63
34:01
you you're right that's absolutely a a key concern. I haven't I haven't seen any productions pulling back from
Speaker 66
34:10
specific jurisdictions because of foyer though I think I think that can be managed in certain ways. I mean production is often use working titles, you know, if if they're on a studio lot they'll be very stringent security around taking pictures and access and things like that so you know and I think we commonly see the amount of incentive given to certain production companies in the public domain. So I think that's manageable. I don't think
it's a deal breaker in that way but we can also take a look at other examples and come back to you in
Chair
Unverified
34:51
case we can find anything. Thank you Mr Speaker.
Senator Jonathan Dismang
Unverified
34:54
Senator Disma you recognize. and I'm glad we're kind of talking a little bit about the proprietary side of things because I've I've heard a little bit about that I mean there's that cuts two ways I mean and obviously think there's a way to do it I mean whether it be an economic development or parks folks should know what they have to apply for how
to apply for it and then to be quiteana who else is receiving it which is something that is very hard to track at least my understanding if you talk to people in the industry in Arkansas and creates a ton of confusion and a lot of folks just choose to not participate we're not even look at the state because of how muddy the waters are or can be here and and I guess my question was before we just got to the previous questions what was what do you mean is it
not important that that information be made public even about who's being awarded I'm not saying we're going to publish someone's script you know or that sort of thing but who's participating in the program because number one if they're successful studios or whatever it may be film crews whatever that are that are filming in Arkansas and finding success we want the rest of the world to know that that's happening right because I think that helps create some awareness about what we have to offer whereas if no one really knows until after it's all over with I I think that's a
whole different ballgame but so what what do you see in other states as far as what's considered proprietary and open to the public versus what everyone should know because then when we are talking about tax credits the the people of Arkansas and the state legislature should bann some accountability about how they're rewarded and that sort of thing or we're talking about rebates one of the two we have two programs in the state both of those because yeah so can you just talk about that idea of what's proprietary and what's not in
other states and maybe how we should look at structuring that as we're having this conversation about how we manage the
Speaker 63
36:55
program. thank you senator and it you know you won't be surprised to hear that it differs
Speaker 66
36:59
quite widely depending on the state and depending on the country if we're talking internationally and and we should highlight that you know, Arkansas is competing internationally as well as with other states so I think what what other countries are doing is is is
relevant as well. I mean I think you know as you rightly say this is public money this is this is tax money and there is a you know there is a duty to taxpayers to to inform them of of how this money is being invested so I think that there should be a some kind of mechanism to to show that in any in any system. I think you know and again this differs very widely but often we see reporting around
on a production company level so if you know it might not be broken down at a project level but there could be reporting annually that says here's here's how the the tax credit has been invested this year and here is the list of entities that have claimed this credit so I think I think that's very important. I think where it becomes problematic for investors and we've seen this not so much in the US but in in some international territoriesries where there have
been systems that do ask for things like scripts or at the back end you know there's often there's an acknowledgement that that often film and TV can lead to tourism and sometimes there has been from systems a bit of an unrealistic assumption that they can maybe send camera crews onto set to get tourism footage or interviews with stars and I think that it's it's that sort of side that gets problematic and I think the other
the other thing to flag is you know production budgets this is all sort of commercial commercially sensitive information and and competitor sensitive information so I think investors are are very nervous about you know any any data release that shows how much they're spending on on making making film and television, you know what they're what they're spending on on on staff it's just it's not something and and many businesses are in that same
position really wouldn't want to to have that out in the open market but I think the the sort of headline investment level is is pretty pretty well accepted as a as
Speaker 88
39:34
something that has to be has to be released really. and
Senator Jonathan Dismang
Unverified
39:40
just so kind of a follow up because I'm not sure how it works here and in in your research what you saw were you able to kind of decipher how we awarded projects and how they were prioritized and who and how
we set commitment levels and that sort of thing in your research what did that look like? I mean what what was your conclusion to well you know the state of Arkansas prioritizes film projects based on these 10 criteria we routinely do that these types of projects aren't going to be awarded it's a first come first serve like what did our current system look like for the amount of money that we had available for rebates and then also tax credits
Speaker 63
40:25
think likeira to come in to this question as well having worked
Speaker 66
40:28
on the economic side but for example and this may have this may have just been the way the data was provided to us. I don't think for example we had project titles and I don't think we had exact spend from those projects so as I say we estimated what we what we did have what we did know is how much the how much the state spent on those
projects but we didn't have a corresponding figure that said for this incentive investment this is how much exactly this project spent in Arkansas in qualifying terms. and also and that's also important because there's qualifying and non qualifying spend and I think for an incentive you know there's elements of that production spend that can be qualified through the incentive and there are elements that can't so every system has non
qualifying components and what you're what you're missing by estimating based on the percentage of an incentive from how much the state has spent on it is that additional piece on the non qualifying so the whole picture isn't isn't that clear really in terms of the exact dollar amounts that get spent. I don't know if you'd add anything to that
Speaker 98
41:53
just to say that we the data that we received was by production company so we
couldn't assign it directly to specific project titles and as Leon mentioned earlier the only information that we've received on that level of detail was the total incentive paid out and not anything on the amount of qualifying production expenditure that that related to
Speaker 99
42:16
five fiscal year either and maybe this will help with the question a
Senator Jonathan Dismang
Unverified
42:22
little bit did y'all get to see what the form looked like for someone that was applying
for an incentive in Arkansas I mean did you get to see the landing page or whatever it may be to you know I'm assuming there was some kind of rigorous process of you know yes and no questions and maybe more detailed questions about projects that we're looking to do business in the state that didn't got submitted so that again the commissioner can make a decision on you know we we need to prioritize this and needs needs to be accepted were y'all able to see any of that to tie it back to oh this is the this is the formula for why Arkansas
wards projects you know tax credits or was that fairly muddy not trying to lead. I I just honestly don't
Speaker 63
43:12
know so we we didn't and mirror correct me if I'm wrong we we didn't see that we didn't know in terms
Speaker 66
43:17
of you know if there were decisions made about you know we only have this amount of funding and here are two projects you know we're we're going to go with this one we we weren't we didn't have information on that
Senator Jonathan Dismang
Unverified
43:32
. as far as it being anEDc I know we've had some of that question is it when those decisions were made were you able to tell who was making the decision? Was it solely up to the commissioner? did it go through AEDC's board ultimately or how what how did something how did they receive the the tax credit ultimately I mean from all the applicants that are submitted so you didn't even get to see the application so we don't know how many
were not awarded in a given year essentially because we don't know what the criteria was we don't know how many were submitted we only got to see who was awarded and only by a companyle not by film level is that is that what I understood you to say? Yes, exactly so
Speaker 102
44:20
we yeah yeah right that that sounds like something we
Senator Jonathan Dismang
Unverified
44:24
may need to look into so we can get a better understanding of that process especially since it's related back to tax credits that were enabled by the legislature. So thank you.
Chair
Unverified
44:35
thank you senator Dising Senator tucker you recognize thank you
Senator Jonathan Dismang
Unverified
44:39
Mr Chair recognizing a lowly nonmember of the committee. I got kind of two areas of questions for you all. First of all, Leon Amiro, I just want to thank you all for your extensive work on this. I know it was a lot and y all came overseas to to come visit Arkansas and and meet face to face with a lot of the stakeholders and legislators and everything so thank thank you all for your work. my first question , I want to follow up on what the chair asked, you know about
the the cap and if you look on page 10 of the proposal, there's other places where in in the report where you comment that we compare favorably with our neighbors in terms of our percentage of the incentive right? but when it comes to the cap we don't and I just want to make sure the members see that we have a4 million dollars cap and and our neighbors Oklahoma has30, Texas' 20 Oklahoma's30 million. Texas is 200 million over twoear period so 100
million per year. Uhlouisiana is 125 million per year in in Mississippi is 20 million per year. so we we're from a cap standpoint we are just not competitive with our neighbors
Speaker 63
45:52
is that fair? and thank you yeah that's that's exactly right. I'd say very very uncompetitive I think to the point where if you
Speaker 66
46:02
were an investor who had whod had never considered Arkansas you you
could look at the list you know and there are lists that we and others produce of
Speaker 100
46:15
of caps and just see it as being too low to you know too
Speaker 66
46:21
low to to make your shortlist really and and as you say the the headline rate which is the the percentage of qualifying expenditure that a production can get rebate or returned in some way in a tax credit. Arkansas does does compete in those terms it's it's it's up to30% in the in the
current you know with with addons so it's it's competitive in in those terms it's just the the underlying both the size of the cat and the uncertainty around that cap and it's it's linkage to the quick action closing fund
Senator Clarke Tucker
Unverified
46:56
so obviously we want to attract out of state investment you know that's that's a
Senator Jonathan Dismang
Unverified
47:02
goal of ours. I've heard reports from Arkansans who have left the state and are producing Arkansans who are producing
films in other states because of the the low level of our cap and the uncertainty around that. Did y'all hear any of those stories when you
Speaker 61
47:21
were on the ground doing interviews here?
Speaker 66
47:29
usually arkansans who wanted to work in you know obviously wanted to work in the industry and either they left because they couldn't get the type of role or the type
of level of role they wanted in state or they left because the the sort of year round stability of the sector couldn't couldn't support them and yeah so I think that we definitely heard that from crew members that you know crew members and filmmakers not not just you know there's a there's a difference in case you're not aware between the the filmmaker side and the crew side and I think both elements we found examples of of of that sort of
outflow of talent and workforce to other other parts of the United States.
Senator Clarke Tucker
Unverified
48:18
OK. for me a goal is I want to attract out of state folks but I just want to
Senator Jonathan Dismang
Unverified
48:24
keep Arkansans here too so thank you for that can you just kind of give the members who are here participating in this discussion a sense of how quickly4 million dollars goes in terms of film productions or or like a a
Senator Clarke Tucker
Unverified
48:35
season of television and and that sort of thing so you know at a at a 20
Speaker 66
48:47
at a 25% rate you know that that would serve as a 16 million dollars production spend thereabouts and if you think you know Arkansas isn't isn't a market built for very large studio productions, you know you don't have large large stages like Georgia does but one of those productions alone can be $200 million and even you know putting aside that top
end of the market even even lower to midbudge work can be you know pretty pretty larger than $16 million for one production so it's it's just not it's not an amount of investment that can create a yearround stable valuable industry it's just it's just too low. I think what what it's been doing and there have been exceptions there have been you know there has been at least one very large production
come to Arkansas but generally it's been it's it's not been sufficient to to attract larger productions. it's it's just not not at a competitive level
Senator Clarke Tucker
Unverified
50:03
and as y'all showed we have a a strong ROI from the dollars that
Senator Jonathan Dismang
Unverified
50:08
we do spend and you know no one hears a decisionmaking in Georgia including y'all but aspresentative Es pointed out they have no cap and so my
analysis of that is they decided that if the formula works at $1 then it works at a million dollars and $10 million and50 million dollars and so forth so OK, I have just kind of one other area of question and its it follows up on what Senator Gilmore and Speaker Evans and Senator Dismay we're all asking about and that is you know, I just I've heard consistently from folks in the industry that they don't know how films get selected. they don't know how much money is remains for either in a rebate or or the tax credit they don't know what jobs are
available in Arkansas and and Senator Disanging asked you specifically what some other states have done so I was I was happy to hear that discussion. I've heard you know, in other states that they they literally just post on the website as soon as a film gets approved so that crew in the state know what jobs are there to apply for is that something that y'all have seen? in your experience
Speaker 63
51:14
and how common is that? it is it it definitely does happen there can be you know again going back to the the discussion about confidentiality you
Speaker 66
51:25
know it doesn't it doesn't may not often name the film or may not often name the studio it might be you know it might be the special purpose vehicle company that has been set up to make that but yeah I think we we definitely see information being circulated online through through agencies or film offices saying this this show is crewing up and partly because you know it's it's a competitive space and I think particularly
in recent years coming out of the covid boom although this may be is tailing off slightly now. there's been a huge amount of competition in some markets for for staff for for crew so I think a lot of productions have had to to to you know use those sort of film commissioned tools to advertise the fact that they're they're crewing up and they're looking they're looking for work so yeah I think we've we definitely have seen that in in other places so there are
Senator Jonathan Dismang
Unverified
52:23
definitely ways to communicate with the industry in
Senator Clarke Tucker
Unverified
52:27
ways that facilitate work where you're also protecting the trade secret type information of the of the production it's what you've seen yeah
Speaker 66
52:35
ok and I should as a caveat I mean we for our study we we were spent a lot of time looking at the the economics of the the system rather than the the sort of crewing up side so I think we're we're much closer to that but yeah in in terms of those job opportunities it's it's definitely something that you know we see elsewhere. OK
Senator Clarke Tucker
Unverified
53:00
so really my last question is about one
Senator Jonathan Dismang
Unverified
53:05
of your recommendations so expanding the film commission that's pretty clear. you know we don't compare favorably with other states and just in terms of the number of staff, right? But another structural recommendation y'all made was to create an industry advisory board and I wonder if y'all could just speak to that a little. I guess umm inferring but it seems to be some communication issues
between the industry and and the state and and that could help facilitate that more transparency and accountability for what projects are chosen or can you just kind of speak to what the
Speaker 63
53:41
purpose of that board would be? thanks senator and I think just underlining the point we made earlier around the lack of cohesion in
Speaker 66
53:48
the sector I think in whenira and I were were in Arkansas and meeting stakeholders crew people who work in the sector, people who supply the sector it we definitely heard
that point about the lack of there was a lack of knowledge between people and across people around what was coming into the industry where where opportunities were coming in and I think you know that's there's a couple of recommendations coming out of that finding which you know one is about the need for a shared strategy, the need for the industry to be on the same page about what you know to be clear about what what the state
government wants to achieve through this sector and and you know where the sector is going you know in terms of its niche in terms of you know what are its ambitions and I think the other the other part of that recommendation is around having the industry in some way be much more involved in you know in in not not so much decisionma but it steering and maybe in
some in some cases oversight you know and we see some film commissions in very major markets might have advisory boards and it it's it's frankly it's a way of of getting the industry both in state and out to to keep talking about Arkansas and to keep sharing information and making sure there's a there's a for for you know leaders in the industry the ones who might who might service productions when they come into ourkansas or
state producers or filmmakers who might be the ones creating new intellectual property that that could create value for ourkansas that there is some kind of forum for them to to come together and have a have a shared understanding and a voice in where the sectors where the sector's going and that that could that could be relevant across a number of areas you mean obviously the the the issue about getting information out to the sector, you know that's something
those producers filmmakers you know whoever was on that sort of board can have a view on and and help sort of you know help sculpt and shape and also helping deal with challenges as they arise you know so if there's if there's a particular production issue you know learning from that in state and if there's gaps in supply chain or gaps in the workforce you know having having a grouping like that can help you know come up with a strategy to escalate that you know how do we how do we create more workforce in that area
and I think we see this in other markets and I think it's a very positive way of of you know learning from senior people in this sector. and bringing them into the tent and they they wouldn't get special access to the incentive or anything like that they should still be rigorous you know rigorous application processes and independent application processes but having having having that industry involvement in the strategic direction of the sector it can
Speaker 114
57:12
only be a good thing if it's if it's well sort of designed
Senator Clarke Tucker
Unverified
57:17
and organized that's extremely helpful again thank you all so much for your work really really appreciate all your effort on this thank
Representative Les D. Eaves
Unverified
57:25
you Mr Chair. all right members any other questions Mattiller any questions you wanted to add? you're good? right thank you both
for being here we appreciate the hard work and for the presentation alright members thank you thanks any other business
Unknown speaker
57:45
seeing none thank you for your participation and we are adjourned.
Agenda
A. Call to Order
B. Presentation of the Arkansas Motion Picture Study Final Report - Olsberg SPI
C. Consideration of an Emergency Rule: Department of Shared Administrative Services (DSAS) – Office of Property Risk (OPR): Rules Governing the Submission of Claims under the State Captive Insurance Program and the Purchase of Mitigation Services for Covered Losses
D. Consideration of an Emergency Rule: Department of Corrections - Arkansas Sentencing Commission: Eligibility for Transfer to Post Release Supervision
E. Consideration of Extension of the Publishing and Editing of Statutory Materials Agreement, between BLR and Matthew Bender & Co., Inc. (LexisNexis)
F. Other Business
G. Adjournment
Documents
Speakers
Representative Les D. Eaves
Unverified
Senator Terry Rice
Unverified
Speaker 27
Speaker 12
Speaker 26
Speaker 42
Speaker 48
Speaker 50
Speaker 55
Speaker 63
Speaker 66
Senator Ben Gilmore
Unverified
Representative Brian S. Evans
Unverified
Speaker 84
Speaker 61
Speaker 88
Speaker 89
Chair
Unverified
Senator Jonathan Dismang
Unverified
Speaker 98
Speaker 99
Speaker 102
Speaker 100
Senator Clarke Tucker
Unverified
Speaker 114