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Film Credit Fiasco: $121 per Iowan, or $26?

September 24, 2009

The Des Moines Register says Iowans might be on the hook for up to $363 million in film credits, which would mean every man, woman, and child star in Iowa would be giving $121 to Hollywood for... nothing.

Iowa Independent says we're only screwed for $78 million so far, which means we're each out a mere $26. Who's right? It's not clear. Iowa Independent reports:

The state gave initial approval to another 109 projects, but no contract has been entered into and no tax credits have been promised, [DED official Erin] Seidler said. That total makes up the largest portion of the tax liability cited by The Register, at nearly $253 million, and the state will not be liable for those projects.

The law says the state allows credits to qualifying films based on "a taxpayer's investment in a project registered under the program." If "under contract" means "registered," than maybe the state can simply stop registering programs. It also would seem to mean that once a film is registered, it's entitled to our money.

I see two promising loopholes that Iowa might use to withhold registration.

One provision says the state "may negotiate" credit amounts (IA Code 15.393.2(a)). It's not clear what that means, but it could be read to allow the state to just say no. If so, "no."

Another provision requires projects to "...further tourism, economic development, and population retention or growth in the state or locality." (IA Code 15.293.1(c). I would say none of them do, that every film credit issued hurts Iowa's economy, but I don't get to make that call. Look for lots of legal wrangling over this.

UPDATE, 2:25 PM: As if on cue, this from The Des Moines Register:

Iowa Attorney General Tom Miller said statements made earlier this week by state officials regarding the state's contractual obligations with movie-makers were mistaken.
"The state's obligations and liabilities may not be determined solely by whether a contract has been signed by the parties, and statements by state officials to that effect are mistaken,” he said Thursday.

If the A.G. already thinks the film looters have us over a barrel, that's a bad sign. This may mean we're on the hook for the whole $363 million.