State film tax credit gets legislative scrutiny

DES MOINES – Iowa's troubled film tax credit program could be in limbo for more than two years while legal issues shake out and lawmakers look at ways to revamp the incentive, two senators said Monday.

Sen. Bill Dotzler, D-Waterloo, said legislators likely will suspend tax credits for any new projects until July 2012, although that suspension could be shortened as things progress.

A Senate subcommittee was scheduled Monday to discuss putting an end to the state's embattled film tax credit program, but the meeting was delayed at least until later in the week, said Sen. Herman Quirmbach, D-Ames. There was some question Monday whether the subcommittee would be scuttled altogether this session.

Sen. Joe Bolkcom, D-Iowa City, chairman of the Senate Ways and Means Committee, said he expects lawmakers will move to suspend rather than eliminate the program before the Legislature adjourns.

“My judgment is that there will be an attempt that will get support to suspend the credit, either to a year from now or potentially for a longer period of time than that,” Bolkcom said. “I think there's more support to suspend than to completely kill the program.”

State leaders have indicated Iowa's troubled film tax credit program could be in limbo for some time while legal issues shake out and lawmakers get a better sense of the state's financial exposure for projects already in the administrative pipeline.

Film tax credit problems first surfaced publicly last September when two top DED leaders resigned and former film office manager was fired amid allegations of lax oversight, mismanagement and other alleged abuses that led Gov. Chet Culver to suspend the program.

That move was followed by a state audit and criminal probe that resulted in a misdemeanor charge against Wheeler and felony thefts charges against two individuals and three companies involved in the making of a movie in Council Bluffs that drew down $1.8 million in state tax incentives.

Late last year Culver resumed the program for projects already under contract or registered with the state, but he kept in place the suspension on new projects pending legislative review.

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