State officials set deadline for film projects

DES MOINES – State officials will give production companies until Monday to say whether they will move forward with their film projects and are still intending to seek tax credits from the state.

Fred Hubbell, interim director of the Iowa Department of Economic Development, outlined the deadline at a meeting of the department's board Thursday.

The state's film tax credit program is currently the target of criminal probe. Questions about the program's possible mismanagement led to the ouster or resignation of three top officials in the economic development department after revelations that the tax credits were used to purchase luxury vehicles.

Monday's deadline applies to more than 100 projects that have received letters awarding the tax credits but are not yet under contract with the state.

Officials will assume that companies that do not meet the deadline are going elsewhere or decided not to complete their project in Iowa. Projects that have not already received award letters from the state will not be considered for tax credits this fiscal year.

“We don't really have time or staff capabilities at this point to really address properly any new potential films,” Hubbell said.

The Iowa Film Office is now staffed by a single person who is getting assistance from economic development staff members.

Projects that already have received an award letter or have contracts with the state for the tax credits could total about $38 million this year, which is less than the $50 million allocated, officials said.

Members of the IDED board approved shifting the $12 million balance from the film tax program to other tax credit programs administered by the department.

The Enterprise Zone program, which extends tax incentives to projects in economically distressed areas, will see an additional $6 million for housing projects. The remaining balance, about $4 million -- $5 million, will go to Enterprise Zone business projects and the High Quality Jobs incentive program.

If some film projects are not completed, that would free up more money for those programs.

State lawmakers have said the future of the film tax credit program remains uncertain as they review an array of tax credits meant to spur economic development and job creation in the state.

Gubernatorial candidate and State Rep. Christopher Rants, R-Sioux City, said he had been against giving the department the authority to shift money between tax credit programs, but cannot argue against it in this case.

“I was not in favor of that flexibility, but if they're shifting money away from the film office, you won't find me defending keeping money with the film tax credit,” Rants said.