The Motion Picture Competitiveness Program (Program) was created by the Legislature in 2006 for the stated purpose of creating a partnership with the private sector to regain Washington's place as a premier destination to make motion pictures, television, and television commercials. The Program must be overseen by a nonprofit organization with the sole purpose of revitalizing the state's economic, cultural, and educational standing in the national and international market of motion picture production and associated creative industries.
Washington Filmworks (Filmworks) is the private nonprofit that oversees the Program and manages its incentive program. Filmworks must be administered by a board of directors (Board) appointed by the Governor. The following must be represented on the Board:
The Board must evaluate and award financial assistance to motion picture projects under rules adopted by the Department of Commerce (Commerce). Money received by the Program may only be used for:
In return for contributing to the Program's incentive fund, a person may receive a credit against Business and Occupations (B&O) tax liability up to $750,000 per year. The total amount that may be credited any calendar year is $3.5 million.
Each motion picture production receiving funding assistance under the Program must report information to Commerce by filing a complete annual survey. The survey must include information on taxes paid, amount of funding assistance received, and employment and wage data. A person claiming a tax credit for contributions made to the Program must file an annual report with the Department of Revenue (DOR). The report must include employment and wage data, among other information.
The total statewide B&O tax credit limit for Program contributions is increased to $20 million per calendar year. The B&O tax credit limit one person may claim for Program contributions is increased to $1 million per calendar year.
An additional authorized use of Program funding assistance is supporting the growth and development of the state film industry through career-connected learning, workforce development, and business development with a focus on better supporting people from marginalized and rural communities.
Filmworks' Board membership is modified. The number of Board members is increased from nine to 12 members. In addition to two labor representatives and the chairperson, the Board must include:
Entities contributing to the Program and receiving a tax credit, and not otherwise receiving funding assistance under the Program, are exempt from DOR's and Commerce's annual reporting requirements.
A tax preference performance statement that identifies the Legislature's public policy purpose and intent for the Program tax credit is included. The Joint Legislative Audit and Review Committee must review and make a recommendation to the Legislature regarding the effectiveness of the Program by December 1, 2026.
The substitute bill makes the following changes to the original bill:
(In support) Oregon and British Columbia have been successful in fostering the film economy. Our state is a beautiful place with talented professionals. COVID-19 has hit the creative industry very hard. This bill will make Washington more competitive for films and episodic projects. The bill provides more money for the competitiveness program and gives Filmworks the ability to expand equity and inclusion in the organization. The Program has a great return on investment. Increasing the competitiveness fund to $20 million would enable Filmworks to support all stages of production. Filmworks would also collaborate with the gaming industry to develop their motion picture content. Effort would also be put toward developing film opportunities for rural Washington. The media mentorship program would also be expanded to focus on providing training for the workforce of the future. The program has never seen a funding increase and Washington can no longer compete with other states and British Columbia. The bill would dramatically improve the film ecosystem.
This bill also expands the Program to allow Filmworks to support the growth and development of the industry through career-connected learning with a focus on supporting people from marginalized and rural communities. The Program uses funds to incentivize motion picture production. The bill would increase the maximum allowable credit for a person to $1 million. The bill also realigns Board positions to reflect updates to the industry and the Joint Legislative and Audit Review Committee reporting requirements. The program has a rigorous review process. The Program also requires health and welfare benefits to be provided to workers.
There has been a lack of diversity in the film industry in Washington, but things are improving including through Filmwork's mentor program. The bill requires that a co-chair of the equity committee will have a seat on the Board. This will help to ensure that incentives are distributed equitably. Diversity will make the industry profitable for everyone. There are not a lot of film employment opportunities in some areas of the state. Filmworks' mentorship program gives opportunities to BIPOC for mentorship, training, and experience working on approved film projects. This bill will help provide greater access to opportunities to BIPOC and marginalized film workers. This bill will help to increase employment opportunities locally so film workers do not have to travel to other states and counties to find employment. The best and the brightest can work in the industry in their home communities.
The industry continues to change with technology. Incentives can make or break an industry. Film is one of the most economic investments in the state. The current incentives are not enough to film all projects that would film in Washington so projects end up going to other states. Film projects promote economic development and positive visibility for communities. Film is a clean industry that supports the local economy. Many businesses and restaurants benefit; this can create and save local jobs. Filmworks is crucial in providing referrals to locations for filming. Film work in Washington gets seen around the world; this boosts and amplifies the state. Cast and crew are needed here in Washington to support the industry; this can be done by having a robust film incentive program.
(Opposed) None.