Judge sides with filmmakers in tax credit case

DES MOINES – A judge has handed a victory to filmmakers seeking a court order to force the state to issue film tax credits to their project.

Iowa Eye Entertainment sued the Iowa Department of Economic Development when the state's film tax credit program was suspended.

They say the suspension of the program postponed production on their film “Clean Out,” which was set to include actors Harvey Keitel, Elliott Gould and Timothy Dalton in its cast.

The petitioner in the lawsuit wanted the department to prepare a written contract requiring the department to issue tax credits of up to $6.5 million based on the film's qualified expenditures.

The ruling issued by District Judge Glenn Pille Tuesday indicates he agrees with the petitioners' arguments.

“By failing to comply with its duties under the Iowa Code and IDED rules, and their written agreement to the material terms of the contract, IDED has substantially prejudiced Iowa Eye's rights and judicial relief is appropriate,” Pille wrote in his ruling.

But his ruling said the parties need to have a chance to present arguments on the necessity of the petitioner posting a bond before he can issue a final ruling. A hearing has been set for Friday morning.

The order states that if bond is required, that after the petitioner posts it, IDED will prepare and execute a requirement that they will provide tax credits for up to $6.5 million of the project's qualified expenditures.

“We are considering all our options, including whether to ask the Iowa Supreme Court to review the decision,” said Bob Brammer, spokesman for the Iowa Attorney General's Office.

Iowa's film tax credit program is now part of a criminal probe. Gov. Chet Culver suspended the program after revelations that some of the tax credits were used in the purchase of luxury vehicles. The state's two top economic development officials resigned their posts in the wake of questions about the program, and the director of the state's film office was dismissed.