Film reps: Tax rules blurry

• By GARY PERILLOUX
• Advocate business writer
• Published: Apr 30, 2008 - Page: 1D - UPDATED: 12:05 a.m.

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Developers associated with more than $1 billion in potential film studio projects voiced concerns Tuesday with a 15-month process that has yet to nail down rules for delivering state incentives to spur film business in Louisiana.

Since 2002, the state has offered incentives that now range up to 25 percent for tax credits on movie productions.

Developers who build studios to make movies in the state — and who applied for incentives by last year — can be eligible for a 40 percent tax credit.

But some of those developers aren’t pleased with the time it’s taking to approve their projects or with the narrow window of time proposed state rules would give them to qualify for tax credits in a potential Catch-22 situation.

If all 41 projects submitted to date were built — a prospect few expect to happen — the state could see a financial impact of $1.63 billion in tax credits returned to studio developers and investors.

Tuesday’s public hearing on rules for granting the incentives was the fifth since January 2007 in a process that still needs legislative committees’ approval.

“We’re becoming a laughingstock in the industry,” entertainment attorney Michèle LeBlanc said at one point during the hearing at the Capitol Annex, next door to the Capitol.

The state Department of Economic Development conducted the meeting to take comments that will be meshed with a final draft of the rules, said Chris Stelly, who directs state efforts to attract film and TV production. The state departments of Economic Development and Revenue along with the Division of Administration will have input on the final rules, he said, which must be published again in the state register before going to the legislative committees.

Though the state has granted tax credits for six years, the rules are required by the Louisiana’s Administrative Procedure Act to establish how state agencies apply the laws that created the film incentives.

“I hope that it happens as soon as it possibly can,” Stelly said of finalizing the rules. There’s no way to nail down a definite date, he said.

Film industry representatives at Tuesday’s hearing — including attorneys, labor unions, filmmakers and builders — said the interpretation of state film incentives law by a current draft copy of the rules could produce disastrous consequences.

Here’s how the rules could affect Robert Day of Baton Rouge-based R.W. Day & Associates, which plans to build the $1.3 billion, 1,000-acre La Vie development southeast of Interstate 12’s junction with O’Neal Lane in East Baton Rouge Parish.

The draft rules read that a studio developer has two years from the time the rules are approved or from Jan. 1, 2008 — whichever is earlier — to spend all the money on a studio that would qualify for tax credits.