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September 22, 2021

Should Utah increase its film incentives cap? How losing 'Yellowstone' inspired a new bill

SALT LAKE CITY — Mark Moench said he had a “very good experience” with the production crews after Thousand Peaks Ranch was selected as a filming location for the popular television show “Yellowstone.”

Moench, the president of the Summit County ranch, said crews were respectful of the property and conducted business in a professional manner.

“But I was also impressed with how they expanded even beyond our property to other county locations within Summit County and even outside in what we call rural Utah,” he said. “Spending some money using local talent.”

At least that was the case until the production crews packed up from Utah and moved to Montana because the Treasure State offered, well, a treasure of better incentives.

Now, following the loss of that film production, a Utah lawmaker wants the state to increase its cap on incentives given to film production crews.

SB167, sponsored by Sen. Ron Winterton, R-Roosevelt, would essentially double the amount of refundable motion picture tax credits the Governor’s Office of Economic Development can offer as an incentive for film productions. It cleared its first test Tuesday afternoon when the Senate Economic Development and Workforce Services Committee, which Winterton chairs, gave it a favorable recommendation following a 3-0-4 vote.

The show’s departure from the state played a major factor in the bill. Prior to Tuesday’s vote, Winterton explained to the committee that his bill was inspired by conversations he had with individuals within the state’s film industry after Paramount announced it would move shooting locations for the TV drama to Montana. The first three seasons of the show, which stars Kevin Costner, were primarily shot in Utah.

The abrupt exit was tied to Utah’s film incentives. The Park Record reported last year that the show spent about $80 million in Utah and was eligible for rebates up to 25% from the state; however, the Utah Film Commission — a branch under the Office of Economic Development — reached its $8.3 million cap and couldn’t match the rebates it had previously offered.

“The state had reached its cap on incentives and they spread that around to all of the industry, and so they didn’t have anything else to offer, and so the production was offered $10 million from the state of Montana — and they were leaving,” Winterton said Tuesday as he introduced his bill to the Senate committee. “There wasn’t anything that our Office of Economic Development could do about it.”

Winterton said that story inspired him to dig deeper into why Paramount chose to leave the state and it led him to that allotted incentives figure. His proposal would raise the cap on tax incentives for film crews to $15 million.

Most people would say ‘we shouldn’t be giving incentives to Hollywood.’ But we need to understand that this money stays in the state of Utah

–Sen. Ron Winterton

He asserted that the money that the state typically sends back to movie productions leads to economic growth.

“Most people would say ‘we shouldn’t be giving incentives to Hollywood.’ But we need to understand that this money stays in the state of Utah,” Winterton said. “We pay them on the money they spend in the state, so they have to produce receipts in order to get — if you want to call it — a rebate. We’ll call it an incentive.”

For instance, Summit County officials reported back to Winterton that film production led to about $160 million in spending in that county alone over the past four years. That spending went primarily toward residents and local businesses.

It went to people like Moench.

“I just think, in this case, it provides an unusual way to attract companies that help rural Utah — although they do obviously help urban areas as well,” he told the committee Tuesday.

The film industry has boosted economies all over the state.

Kelly Stowell, the Kane County film commissioner, also voiced support for the bill. He called it “true economic development” and that Kane County in southern Utah had greatly benefitted from the incentive in the past.

He testified that filmmaking became a “gift that keeps on giving” for the county because it then helped the region draw in tourists that tacked onto the state economy.

“Kanab is known as ‘Little Hollywood,’ and we have a lengthy history of filmmaking,” Stowell said. “This really builds on our culture.”

There wasn’t any pushback on the bill during the meeting. Sen. Derek Kitchen, D-Salt Lake City, who voted in favor of the bill after Moench and Stowell spoke, added that he believed that it’s an important incentive for the state.

“Utah gains a lot from this kind of investment and support of the industry,” he said. “I’m eager to see this funded, and hopefully we can continue going forward.”

Following Tuesday’s vote, the bill was sent to the Senate for a future floor vote. It will need to be passed by the Senate and House of Representatives before it is placed on the governor’s desk for signature.

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