Florida film & Entertainment Advisory Council
4th Quarter Meeting Minutes
The fourth quarter meeting for Florida Film and Entertainment Advisory Council was called to order on December 12, 2005, at 10:15 a.m., at the Portofino Bay Hotel in Orlando, Florida.
Members Present Excused Members Not Present
Lew Klechak
Charleene Closshey
Hollis Batchelor
Mark Zubaly
Todd Roobin
Patrick Keating
Lucia Fishburne
Marty Wilson
John Welch
Leslie Ann Bartlett
Rebecca O’Dell Townsend
Alan Randolph
Lorraine Wood
Raquel Cisneros, Communication Coordinator
Natalie Recio, Executive Assistant
Susan Simms, Los Angeles Liaison
Meeting was called to order by the Chairman, Paul Meena at 10:15 a.m.
Introductions
Roll call was taken and review of excused and unexcused members. Council members and the public in attendance introduced themselves. A special thanks was given to our sponsors Metro Orlando.
The 1st quarter meeting will be held in Tallahassee, at the Capitol on Friday, March 24, 2006. This meeting will be held in conjunction with Film Florida. Film Florida’s Legislative Reception at the Governor’s Mansion will take place on Thursday, March 23, 2006 and arrangements are being made to have the reception at the Governor’s Mansion. This reception is tentative because of the gift band that just passed.
FFEAC 3rd Quarter Meeting, September 30,2005
Approval moved by Todd Roobin
Second by Mark Zubaly
Motion approved
FFEAC Financial Incentive Meeting, November 14,2005
Approval moved by John Welch
Second by Mark Zubaly
Motion approved
FFEAC Membership Committee Conference Call, August 23, 2005
Approval moved by Lorraine Wood
Second by Charleene Closshey
Motion approved
Paul Meena reviews the current status of the House of Representative Interim Study conducted by Judy McDonald. This study will focus on the most competitive States to compare our incentive to theirs. This study will be presented to the Senate and House.
Paul Meena gave a brief description of how the tax credit works with the new “glitch bill”. An informal survey of commercial production managers and producers was made to determine how a commercial incentive could be made more user friendly by a new bill. Further investigation of tax credits will to be done. For now the best option is to roll the current incentive into a tax credit. Paul Meena asks that Paul Sirmons go through the new “glitch bill that will be proposed line by line.
RULE PROMULGATION PERIOD
Paul Sirmons explains the procedure for rule promulgation for any new incentive legislation. We must allow an eight-week window in order to create legally binding rules for the incentive, and the bill needs to be passed and signed by the Governor before the 8-week rules process begins.
ELIMINATION OF UNUSED OR SELDOM-USED QUEUES
Paul Sirmons goes on to discuss the seldom-used queues and gives reasons why they should be eliminated.
Re-location queue: There have been zero applications in 2 years, so its not incentivizing anything. Plus, there are other more substantial incentives through Enterprise Florida, OTTED and other agencies that address relocating companies.
Digital Media: only 2 applications have been approved in 2 years – not much positive response from the industry. Enterprise Florida and other groups have incentive packages available such as the one successfully used by Electronic Arts in Orlando.
In summary these two queues take up more than half of our lengthy application and complicate it. We can simplify the application by eliminating both queues. The elimination will increase the involvement of Enterprise Florida and Visit Florida with the OFE. Lew Klechak made a motion to eliminate both queues. Leslie Ann Bartlett seconded. Motion approved.
INCENTIVE RATE
Paul Sirmons proposes to maintain the current incentive rate of 15% payout. Reasons not to change: have high demand for our incentive already and we do not wish to water down our ROI, which is currently about 7:1. Motion made by Lorraine Wood to keep the current incentive rate. Seconded by Charleene Closshey. Motion approved.
MINOR CHANGES TO APPLICATION PROCESS
Paul Sirmons proposes minor changes to the application process during the opening two-week window. Keep an initial two-week window, based on principal photography start date. The minor change would allow productions to begin principal photography within five (5) business days on either side of principal photography start date without penalty. Motion was made by Lorraine Wood to accept the 2 step process Paul proposed with the revision of including 7 consecutive days instead of 5 business days and if a production requires more flexibility, they can appeal to an executive committee made up of the State Film Commissioner, the Los Angeles Liaison of the Governor’s Office of Film and Entertainment, and the chief executive of OTTED. Motion seconded by Mark Zubaly. Motion approved.
During the rest of the year the OFE will keep accepting applications on a first come/first served basis. The proper mailing procedures for applications will allow ANY date and time-stamped mail service but the Capitol's mail room is flawed in that everything comes in time stamped all with the same time. Mark Zubaly made the motion to defer this to the OFE. Seconded by Lorraine Wood. Motion approved.
Paul Sirmons describes a flaw in our current incentive which is a production company can postpone their production start date up to 30 days of their application date and still receive the incentive. The suggested solution is to change the flexibility of the principal photography start date to 20 business days on either side of principal photography start date promised in the application (by using business days, we clear any confusion on holidays, etc.) Leslie Ann Bartlett made a motion to accept this flexibility but with having 30 consecutive calendar days instead of 20 business days. John Welch seconded. Motion approved.
ADJUSTMENTS TO QUEUES –
Paul Sirmons suggests four queues:
a. FILM, TELEVISION, and EPISODICS 58 %
b. TV PILOTS 20 %
c. COMMERCIAL and MUSIC VIDEOS 20 %
d. INDEPENDENT FILM AND VIDEO DISTRIBUTION BONUS 2 %
100 %
THE FILM, TELEVISION, AND EPISODICS QUEUE --
Proposed Percentage of Appropriated Funding: 58% Paul Sirmons suggests to change Minimum Florida Qualified Expenditures to $625,000 qualify from the current $850,000.
Reason: $625,000 is the baseline for Screen Actors Guild’s threshold for low-budget films – it ties our threshold to a figure that is a recognized benchmark in the industry.
Regarding High-Impact TV Series Only: propose that a high-impact TV series be allotted first position in the queue for funding certification for its first three production seasons. Paul Sirmons defines high-impact TV series as a production created to run multiple ‘seasons’ with an order of at least 7 episodes and a minimum of $625,000 in Florida qualified expenditures per episode. A high-impact TV series, as defined in c(ii), will be allowed to begin principal photography up to 90 days before July 1st and still be eligible for qualification in the fiscal year starting July 1st, but may only qualify Florida expenditures made AFTER July 1st. Reason: By doing this, we are adapting our incentive to fit the standard TV series production season. With this change, a TV series that must start in May or June in order to make network delivery dates can still receive our incentive. Currently, ‘Policies and Procedures’ state that any show that starts filming before July 1st can not receive our incentive. There shall be no financial incentive for a 4th season or seasons thereafter for any TV series which has received Florida incentive funds for three previous seasons.
Paul Sirmons proposes that all uncommitted funds in this queue (funds not qualified to productions) be merged into the General Entertainment Incentive Fund on March 1, 2007, and allocated to remaining projects based on principal photography start date thereafter. A motion was made by Hollis Batchelor to accept lowering the Minimum Florida Qualified Expenditures to $625,000 qualify from the current $850,000 but not associating it with the Screen Actor’s Guild and the General Entertainment Incentive Fund on March 1, of each fiscal year. Motion seconded by Leslie Ann Bartlett. Motion approved.
TV PILOT QUEUE
Proposed Percentage of Appropriated Funding: 20 % Paul Sirmons describes pilots as the first ‘test’ episode of a TV series. If they are successful, they can lead to 20 or more episodes filmed each year, and might run for many years. Right now, we never have funding in March for TV pilots – so they go elsewhere to film, and we lose the potential TV series they might spawn. The solution proposed is that we create a special queue for TV pilots that makes sure funds are available through March. Only pilots that film in Florida, for series intended to be filmed here, will be eligible. The minimum threshold for Florida expenditures will be $625,000. Lorraine Wood makes a motion to accept the proposed TV pilot queue with all uncommitted funds in this queue (funds not qualified to productions) be merged into the General Entertainment Incentive Fund on March 1, of each fiscal year, and allocated to remaining projects based on principal photography start date thereafter. Motion seconded by Richard Lobo. Motion approved.
COMMERCIAL and MUSIC VIDEO PRODUCTION QUEUE
Proposed Percentage of Appropriated Funding: 20 % Paul Sirmons describes that no commercials or music videos qualified for our incentive in the past two years. The main reason was that no single commercial reached the current $850,000 in Florida expenditures. We propose lowering the proposed $625,000 threshold for qualified Florida expenditures FOR THIS QUEUE ONLY to $500,000. Allowing production companies to add up Florida expenditures from multiple commercials and/or music videos in order to reach the revised threshold of $500,000, provided each single production spends at least $75,000 in qualified Florida expenditures per commercial or music video. Hollis Batchelor makes a motion to lower the cap to $500,000, have a cumulative threshold of two million and to broaden the definition of production companies to include the production company, the advertiser and the ad agency. Charleene Closshey seconded. Motion 7 approved and 5 did not. Motion made to revise the last motion made by Lew Klechak, seconded by Katie Waters. Motion made by Hollis Batchelor again but this time not broadening the definition of a production company to include ad agencies. Motion seconded by Paul Meena. Motion passed.
INDEPENDENT FILM AND VIDEO DISTRIBUTION BONUS
Proposed Percentage of Appropriated Funding: 2 %
Paul Sirmons proposes this as a test program, or ‘pilot’ program – to encourage indigenous filmmaking across the state, to encourage distributors to choose films made in Florida., and to provide a new and unique way to market Florida by placing film-oriented tourism videos on all DVDs issued under this program.
Propose that Distributors picking up films with Florida expenditures less than $625,000 (i.e., films that do not qualify for our financial incentive) receive a ‘bonus’ in an amount according to the type of distribution received:
i. Theatrical (Guaranteed 3 or more theaters, min. 2-week run to qualify)
1. Suggested Payout: $50,000
ii. Television/cable release (we will set minimum households to qualify)-
1. Suggested Payout: $20,000
iii. Home video release (we will set min. # of DVDs distributed to qualify)-
1. Suggested Payout: $10,000
Distribution contract will have to be certified by a Florida-based entertainment attorney pre-approved by the OFE, paid for by the distributor. For an independent film to qualify, they can not qualify for the 15% incentive program, and 90 per cent of its production days must be in Florida. A shooting schedule and production reports will be supplied to help verify this. We propose requiring the distributor to place a film-oriented Florida Tourism Video (running time two minutes or less) on every DVD of the production, and noted on its DVD menu where applicable. The OFE will work with Visit Florida and OTTED to create and/or supply this tourism video. We propose that all uncommitted funds in this queue (funds not qualified to productions) be merged into the General Entertainment Incentive Fund on April 1, 2007, and allocated to remaining projects based on principal photography start date thereafter. Katie Waters makes a motion to accept as written with the April 1, each fiscal year and with 90% of production must be shot in Florida. Motion seconded by Marty Wilson. Motion approved.
NEW END-CREDITS LOGO
Paul proposes a dramatic ‘Film In Florida’ logo be created and required to be included in the end credits of all qualifying films. OFE should work with Visit Florida and OTTED to create this logo The ‘Special Thanks’ in the end credits needs a little tweak – however, unless we want to keep it in tandem with our new logo, it can be omitted.
MARKETING REQUIREMENTS
Paul Sirmons proposes requiring the distributor to place a film-oriented Florida Tourism Video (running time two minutes or less) on every DVD of the production, and noted on its DVD menu where applicable.
-- OR --
Offering the production the alternative of not including our video IF they provide 1-2 consecutive minutes specifically about the positive aspects of filming in Florida in their official ‘Making Of’ video, which must be included on their DVDs.
The OFE will work with Visit Florida and OTTED to create and/or supply the film-oriented Florida Tourism Video. We propose considering some penalty against the production for not including either of the above, provided the film-oriented Florida Tourism Video was properly provided in a timely manner. We propose requiring producer to supply 10 still photos of scenes shot in Florida plus ‘star talent’ headshots, in a high resolution format, with rights cleared to allow usage of the photos to promote Florida’s film, video and entertainment industry, supplied before exhibition of the product. We propose requiring the production provide 2 posters, 2 screeners and a press kit to the OFE when made available to the media or industry.
Paul Sirmons proposes allowing productions to submit to OFE their final expenditures one time only, after such expenditures have been substantiated by a Florida-based CPA pre-approved by the OFE. We propose a reimbursement check be issued only once to a certified production. However, items successfully disputed by the production can be paid at a later date. We propose establishing a final date of August 15 each fiscal year for any certified production to submit all substantiating paperwork to the OFE, to allow proper time to process the paperwork and issue the rebate check, in time to properly close the books on the pertaining fiscal year by the following Sept. 30.
Paul Sirmons comments on how tax credit is established for a specific number of years, productions can plan ahead with the comfort of knowing the incentive will be available.
It creates a ‘flexible’ ceiling, wherein once the maximum yearly ceiling of a tax credit is reached in one year, a production can still film and take the tax credit in a following year, as long as there are tax credits available. Funding should therefore be available later in the year. Productions can plan on a tax credit being available in subsequent years, as long as it’s before the ‘sunset’ year. Productions can start shooting whenever they need to, because tax credits and certification of expenses can be allowable in whatever tax year the expense is incurred, (providing the minimum threshold on qualified expenditures is reached.) Productions that do not have a tax liability in Florida will ‘sell’ their tax credit to a Florida corporation at a discount. The Florida corporations buying the tax credits could be located anywhere in our state, spreading our incentive’s economic impact statewide.
The time the Office of Film and Entertainment spends yearly on the legislative appropriations process would be greatly reduced, allowing its focus to be on attracting production, growing our film and digital infrastructure, serving our film schools and festivals, and better utilizing film’s ability to increase tourism to the state.
The MPAA feels it is important to switch Florida to a tax-credit state if possible. They have made Florida its #1 target to do so. Every state offering a substantial incentive offers a tax credit rather than a rebate (except S.C.)
Katie Waters announced the names of the nominees for our 2006 Members of Distinguished Honor. Jimmy Buffett, John Travolta, Andy Garcia, Carl Hiaasen, Victor Nunez and Gloria Estefan. An Executive Committee vote was taken. Motion made by Lew Klechak. Seconded by Paul Meena. Motion approved. A council vote was taken. Motion made by Leslie Ann Bartlett. Seconded by John Welch. Motion approved.
Paul describes that Talent Agents’ account at the DBPR has operated in a deficit since its inception. The intent of the $1,800 special assessment was to address that deficiency. The OFE has had over half of the agencies in Florida respond to this. Action is required to address this issue.
The Governor’s Office of Film & Entertainment is in the process of assembling a 10 x 12 display to be on view for the general public at the center concourse of the Tallahassee Airport from February 14, 2006 through March 28, 2006.
The display will showcase the evolution of filmmaking in Florida, with an emphasis on the positive economic impact of filmmaking on our state. Our plan is for it to consist of posters, stills, clips and information of films made in Florida over the past 90 years.
Leslie Ann Bartlett motioned to adjourn the meeting, Mark Zubaly seconded. Meeting adjourned at 2:45 p.m.