As Minnesota film buffs deconstruct and debate the Oscars and congratulate Bloomington native Pete Docter for stepping into the winner’s circle with his animated feature “Up,” the fate of the Minnesota Film and TV board is very much up in the air.

Gov. Tim Pawlenty’s supplemental budget would close the office after July 1 and reduce production incentive funding from $1.225 million to $525,000 for 2010 and eliminate it for 2011.

The Film and TV Board oversees a rebate program of 15 to 20 percent on in-state expenditures for production costs. It also acts as the go-to link for production companies looking for crews, locations and “problem solvers” for feature-length films, TV commercials and Internet and music videos. 

The Senate has reinstated some of the funding, and the House has not yet submitted its budget proposal for the office, according to Film Board Director Lucinda Winter. Created by the Legislature in 1983, the Minnesota Film and TV board saw its funding cut back once before -- from 1997 to 2002 -- but it has never gone out of business, Winter said.

“We are a jobs creation program,” Winter argued, describing Minnesota’s $225 million-a-year film and video industry that consists of 385 companies that generate a $76 million payroll and employ more than 4,000 Minnesotans.

The rebate incentive, called “Snowbate,” generated more than $42 million in direct and indirect economic spending over the last three years on reimbursements of $3.3 million, according to the Film Board website. It also created 338 full-time equivalent Minnesota jobs, at a cost per job of $7,270.

Winter also said her focus is on job retention, supporting the existing production industry and advising schools on the curricula needed for graduates to find employment in the industry.

She also argues that in addition to the near-term impact on projects, closing the office will give a black eye to Minnesota within the film production community.

 “Frankly, if I’m sitting anywhere in world thinking of shooting in Minnesota, the first thing I’m going to do is look for the film commission. If there is no film commission, the assumption is you’re not in the business,” she added.

With one feature, “The Convincer,” currently in production and another 20 “in the hopper” for 2010, the reduced rebate funding will likely result in the state reneging on verbal commitments already made to production companies. Closing the Film Board office will complicate rebate payments as well.

States have been aggressively competing for film industry business, either through rebates or tax credits. Winter points to the Pennsylvania legislature, which allocated $75 million, and Michigan, which offers rebates of up to 42 percent as examples of aggressive state actions to attract film industry jobs.

Beyond financial incentives, Minnesota has a “rich pool of acting talent,” as well as experienced and reliable production crews, relatively low production costs, a variety of locales within easy travelling distance and an international airport as advantages she touts when selling the state.

While the Senate has restored partial funding for this year and she is awaiting action from the House, she acknowledges that “down the road, we’re going to have to fight” to restore funding. She said she may consider pushing for tax credits instead of rebates, as an easier sell to the Legislature because it has no fiscal impact in the first year, she said.

On Monday, Winter testified before the House Cultural and Outdoor Resources Finance Committee to push for a change that would allow 20 percent rebates for production expenses outside of the metro area as a way to encourage activity throughout the state.