The Georgia film and TV productions that will share the biggest state film incentive in the country would all need to submit to audits, under a bill moving through the state House.

The bill also expands the film tax credit program to music made for film and TV. And state Rep. Matt Dollar’s House Bill 1037 promises the incentive to the 2026 World Cup broadcast center if it’s located in Atlanta.

“The film tax credit has been I think wildly successful in Georgia,” Dollar, R-Marietta, said last week in the first of three hearings on his bill. “It’s been so successful that there’s been some reluctance to mess with it.”

It’s unclear what the value of the foregone taxes would be if the bill becomes law, and the committee has worked without any published estimate.

But Georgia’s film tax credits have more than doubled since 2013 and were worth $870 million in 2019.

Dollar’s bill comes in response to to scathing reports this year from Georgia auditors.

Film and TV producers that spend more than $500,000 in the state can get a tax credit worth up to 30% of what they spend.

But the state has granted millions in credits for spending that didn’t happen in accordance with the rules, auditors found, adding that state agencies don’t have enough controls to make sure that doesn’t happen.

And auditors pointed out an incentive for production companies to misstate their spending: they can sell their tax credits.

In 2016, about 80% of productions transferred the tax credits to some other Georgia company. It’s unclear why exactly his happens, but auditors said the consensus is that the production companies have little to no tax liability here. That would mean the money is being taken back to some other state.

Despite granting more tax credits than any other state, auditors wrote, Georgia requires companies to provide less documentation than any of the 31 other states with a film tax incentive.

State auditors recommended a cap on the break and stopping the sale of tax credits.

The bill is one step forward, two steps back, said Kennesaw State University economist J.C. Bradbury. He’s calculated that Georgia’s tax foregone due to the film tax credit amounted to $220 per household in 2018 and it’s more like $230 now.

“It’s being treated as a ‘reining-in the-tax-cut bill,’ when actually it’s expanding the tax credits,” Bradbury said.

Bradbury said audits should have been being done all along.

He’s also spent years saying the state is exaggerating its claims of jobs and economic activity from the film tax credits.

State auditors also too said that the Georgia Department of Economic Development used an inflated multiplier to calculate credit-related economic activity related to the film tax credit. In other words, that decision-makers who relied on those numbers didn’t have good information.

During hearings on the bill last month, with little but pro-tax-credit testimony, some suggested that Georgia will lose productions if it doesn’t offer a steeper subsidy.

That got some pushback.

State Rep. Chuck Martin, R-Alpharetta, said that some of his colleagues already think 30% is too high a tax credit. He said he himself gets calls from constituents like teachers, and he has to be good stewards of their money.

“Realize when we’re talking about these numbers it’s real money,” Martin said. “At some point the race to 30%, 40%, whatever, you kill the golden goose.”

Martin ended up voting for the at the meeting of the Georgia House Working Group on Creative Arts and Entertainment. But he also said he didn’t like the sporting event provision and he thinks it should be in a separate bill. Joining them, he thinks, may hurt the chances of the film bill.

It now goes to the House Ways and Means Committee.

Read the original article, here.