Senator Says House Is Stalling Reform of Special Tax Perks for Filmmakers

Two bills already approved by the state Senate that would bring transparency to the Michigan Film Office are being held up by the chair of the state House tax policy committee, a state senator claimed Wednesday.

State Sen. Nancy Cassis, R-Novi, sent a letter dated June 8 to Kate Ebli, D-Monroe, calling on the Democrat to take action on Senate Bill 796 and Senate Bill 889. Ebli had a hearing on the bills in February.

In the letter, Cassis mentioned the Hangar42 controversy. Hangar42 Studios was involved in a land deal that involved a refundable infrastructure tax credit worth 25 percent of the investment in the project.

In her letter citing reasons for the House to act on her bills, Cassis also mentioned the Mackinac Center for Public Policy's report that broke the Hanger42 story open.

"I think there is real impetus now with Hangar42," Cassis said. "She (Ebli) is holding it up. There is no question about that in my mind. Now the time has come that we can make the case that to hold back this information is extremely problematic."

Ebli didn't return a phone message left at her office or an e-mail.

The studio agreed to buy the facility for $40 million. It is located at the site of a former Lear Corp. manufacturing facility in Grand Rapids.

But as late as February, the facility had been listed by a realtor for $9.8 million. It raised the question of why investors would pay $40 million for a building that did not sell when listed for a quarter of that price. In addition, contractors hired to help convert the property into a studio said they had not been paid. There were also six liens outstanding. 

Wood TV Channel 8 picked up the Mackinac Center story and reported that the Michigan Film Office said in an e-mail that it was directed by the Attorney General's office and Treasury Department to not divulge either an approval or denial of the $10 million tax credit.

The story has spurred legislators to propose bills to make the film tax credits more transparent.

Senate Bill 796 and Senate Bill 889 were both passed by the state Senate.

Cassis said SB 796 would require the Treasury Department to release post-production certificates awarded to movie companies to certain members of the Legislature.

SB 889 amends the Revenue Act to allow the state treasurer to release post-production tax certificates.

"Given that the Film Office has consistently cited 'confidentiality' in declining to provide information regarding film projects, I believe quick action on SB 796 and SB 889 is crucial," Cassis wrote in the letter.