Twenty years ago, Georgia was an entertainment powerhouse. Only New York and California provided more backdrops for films and television shows.

That began to change in the 1990s, though. As other states, and other countries, saw the money the film, television, commercial and music video industries could bring to their economies, they began to pass tax breaks and other incentives to bring in projects. Georgia fell behind.

Now, Georgia government officials, labor leaders and film executives are seeking ways to bring the title of Hollywood South back to the Peach State. One solution to make Georgia competitive again: a new law that gives tax credits to production companies that film in Georgia.

The act, passed overwhelmingly by the state General Assembly during the last legislative session, gives out-of-state production companies a 9 percent tax credit on Georgia payrolls. Companies can get an extra 3 percent credit by employing Georgia residents on crews and by filming in poor or rural counties, for a total of 15 percent.

The law will benefit Georgia companies as well. Out-of-state companies can sell the credits to Georgia companies for an expected 60 to 90 cents on the dollar, lowering the tax bill of both the seller and the buyer. In addition, Georgia-based entertainment companies like Turner can take advantage of the credit if they spend more money than the average amount they spent over the past three years.

Unless in-state companies expand or band together to make bigger projects, they probably cannot take advantage of the incentives. Mike Akins is the business agent for IATSE Local 469 (International Alliance of Theatrical Stage Employees), a union that represents crew. Akins states, "There was no reason to give a tax credit to businesses already here."

The act's proponents say that even companies that are not eligible for the tax credits will not be hurt by it.

Dozens of memorable films and television shows were shot in Georgia during the 1970s, Ô80s and early Ô90s Ð "Smokey and the Bandit," "Deliverance," "In the Heat of the Night," "Driving Miss Daisy," and "Forrest Gump," just to name a few.

But as places like Louisiana, New Mexico, Canada, Romania and New Zealand began offering incentives to shoot there, Georgia fell behind. Canada, for example, offers a 15 to 18 percent income tax credit, as well as a favorable exchange rate. Louisiana, Georgia's closest competitor, gives filmmakers a 10 to 20 percent credit if they hire local workers. Perhaps the lowest point came when producers turned to New Orleans to shoot "Ray," the biopic of Ray Charles, who is not only a Georgia native but sang the state's official song.

"At one time, producers would call and say ÔDo you have locations, do you have work crews, and oh, by the way, do you have incentives?'" said Greg Torre, director of the Georgia Film, Video and Music Office. "As years went on, that sort of reversed itself."

Exact figures are hard to come by, but Torre estimates about 1,500 to 2,000 Georgians work in the film and television industry. Over the past five or 10 years, jobs dried up as filmmakers chose to shoot on location in other states. Georgia averaged about 20 films a year in the Ô70s, but only one Ð "Diary of a Mad Black Woman" Ð was shot in Georgia in 2004. With only one or two movies a year, "you can't support a career or an industry," veteran casting director Shay Bentley-Griffin said.

And of course, workers are following the money.

"We've seen a migration of the work force to other states in order to make a living," said Akins. His IATSE Local 479 represents about 350 production workers in Georgia.

When industry insiders realized Georgia could no longer compete, they formed the non-profit Georgia Production Partnership (GPP) to research ways to draw film and television back to the state, according to Ric Reitz, the partnership's co-president with producer Vivian Jones.

The first attempt was a 2001 measure that gave film companies refunds on sales taxes. But "it just wasn't enough," said Ed Spivia, the film office's first director and chairman of an advisory commission. "We realized it right away."

So, the GPP redoubled its efforts, forming another group called Economic Development through Georgia Entertainment, which hired a lobbyist and set to work convincing lawmakers more incentives were needed.

Alerted to the problem, Gov. Sonny Perdue appointed a rejuvenated Film, Video and Music Advisory Commission, made up of Spivia, Akins, Revenue Commissioner Bart Graham, Savannah lawyer Dana Braun, Rep. Mitch Seabaugh, R-Sharpsburg, and other government officials and industry leaders, to find a new way to compete. EDGE and the advisory commission wrote a bill that offered a 10 percent tax credit, along with an extra 5 percent each on local payrolls and work done in poorer counties.

But in 2003, controversy erupted over tax incentives Perdue offered DaimlerChrysler to build a plant near Savannah. The governor was wary of any incentives bill that was not clearly revenue-neutral, and some people disagreed on whether the film incentive bill would cost taxpayers money.

"We had trouble getting some good figures we could rely on," said Rep. Butch Parrish, D- Swainsboro, a member of the tourism and economic development committee. "There wasn't really any hard data."

The first version died in a Senate committee in 2004. Backers studied the issue further, and came back with the current version, which cut down on percentages but enlarged what could be considered in-state expenses. The bill also got a boost after Perdue hosted a party for Grammy winners last year. "That sparked a lot of interest," Parrish said. "It had the backing of the governor."

Industry representatives convinced legislators to pass the act mostly by appealing to their desire to bring jobs and tourism to the state, and by gearing some incentives to South and Middle Georgia representatives, not just Atlanta.

With tourism one of the fastest-growing businesses in the state, those legislators realized a movie or television show is a great way to "sell" a small community to the public.

Rep. Larry O'Neal, R-Warner Robbins, who carried the bill on the House floor, remembers visiting the Whistle Stop CafŽ in tiny Juliette, GA, site of the movie "Fried Green Tomatoes."

"You can't get in that place at lunchtime still," he said. Parrish pointed to the tourism boom in Savannah based on the book and movie "Midnight in the Garden of Good and Evil." Numerous tour guides take fans to settings from the movie, drawing thousands of people of year to the city. If Savannah can do it, so can the rest of the state, Parrish said.

"Our tourism does very well, although many of us felt we weren't doing what we needed to do to get the maximum benefit out of it."

With 80 to 90 percent of Georgia productions taking place in metro Atlanta, legislators saw the bill as opportunity for other parts of the state to get in on the action. It was also an opportunity for them to reach across the aisle and agree with the other party.

"It was probably as non-partisan a thing as we passed all year," O'Neal said.

No one has exact figures as to how much money the act will bring into the state, but by all accounts, it is bound to be substantial.

Producers spent $267 million in Georgia in 2002, the most in recent memory, but Torre expects to top that within the next two years.

"I feel certain we'll go beyond the $300 million mark," he said. Reitz is even more optimistic, anticipating eventual revenues of $500 million.

That amount would put Georgia on par with Louisiana, which made more than $300 million off film and television last year after bringing in less than $10 million five years ago. Although Louisiana's incentives are in many ways stronger than Georgia's, officials say Hartsfield-Jackson International Airport, better transportation, more experienced crews, a variety of locations from beaches to mountains, and access to post-production facilities will give Georgia an edge now that incentives are in place.

"We have many more resources and advantages that level the playing field," Reitz said.

The Georgia Entertainment Industry Investment Act

creates tax incentives for production companies to shoot movies, television shows and commercials in Georgia. Those incentives are:

-a 9 percent tax credit on Georgia productions between $500,000 and $30 million
-an additional 3 percent tax credit on income paid to Georgia residents.
-an additional 3 percent tax credit on money spent in poor or rural counties.
-a 2 percent tax credit for television projects in excess of $20 million.
For production companies that spent more than an average of $30 million per year in Georgia in 2002, 2003 and 2004, the tax credit can be taken against spending over $30 million.

Already, producers are showing a renewed interest in Georgia. The sequel to "Diary of a Mad Black Woman" will begin filming soon, and "Drumline" producer Dallas Austin will likely bring his latest project, "Jellybean," to the state as well.

"I'm sure they could have taken it to a number of states, but now, because of the incentives, they can make it where they wanted to all along, which is Atlanta," Torre said.

Several television pilots with budgets in the $12 to $25 million range are also inquiring about shooting in Georgia, Torre said.

During a recent trip to Los Angeles for the Film Location Expo, local executives and officials introduced studios, producers, directors and independent filmmakers to the act. The results? "Very positive," according to Torre.

"The people I've spoken to want to know more," Bentley-Griffin said. If the anticipated revenue and jobs materialize, more efforts to woo movies and television shows may be in the works.

"This may not be the end of what we do," O'Neal said. "If this is successful, we'll find other ways to attract the industry here."

By including so-called "new media" like digital production, the act's authors opened the door for makers of video games and Internet content to work in Georgia as well.

"We weren't just trying to keep up with the Joneses," Torre said. Another idea is a public-private partnership to create a quasi-public production company that would rent out studio space, lighting equipment and other needs.

Even if that idea never comes to fruition, Georgia is still likely on its way to becoming the movie capitol of the South again. "(Other places) made it to where we weren't competitive," Spivia said. "Now we are again."

Key HB 539 Contributors/Supporters

Georgia Governor Sonny Perdue
Chief of Staff John Watson

Georgia Film, Video & Music Advisory Commission

Ed Spivia, Chairman
Shay Griffin, Vice Chair

Legislative Bill Committee:

Dana Braun, Chairman
Bart Graham, Revenue Commissioner
GA. Senator Mitch Seabaugh
GA. Rep. Butch Parrish
Mike Akins
Patrick Jones

Georgia Department of Economic Development

Craig Lesser, Commissioner
Chris Clark, Deputy Commissioner
Georgia Film, Video & Music Office
Greg Torre, Director
Georgia Department of Revenue
Bart Graham, Commissioner
Dawn Sturbaum
Lora Butler

Economic Development through Georgia aEntertainment (EDGE)

Mike Akins, President
Vivian Jones, Vice-President
Ric Reitz, Secretary/Treasurer
Shay Griffin
Ben Adams
Robert Vasquez
Paul Varrieur
Jay Morgan
Demetrius Mazacoufa
IATSE Local 479
Mike Akins, Business Manager

Georgia Production Partnership (GPP)

Vivian Jones, Co-President
Ric Reitz, Co-President
Georgia House of Representatives
Speaker Glenn Richardson
Rep. Larry O'Neal
Rep. Butch Parrish
Rep. Richard Royal
Rep. Terry Coleman
Rep. Nan Orrock
Georgia Senate
Lt. Governor Mark Taylor
Senate President Pro Tempore Eric Johnson
Senator Mitch Seabaugh
Senator Jeff Mullis

Principle EDGE Donors

IATSE Local 479
Georgia Production Partnership (GPP)
IATSE Local 491
PC&E
Cinematographers Local 600
OZ Publications
Lightning Rentals
Rain Forest Productions
Comotion Films
Ric Reitz Writes
Pogo Pictures
Riverwood Studios
Paul Varrieur