PROVIDENCE — While she’s having a blast playing an Alaskan native on a Sandra Bullock movie set in Rockport, Mass., retired English teacher Angela Ryding and her husband, Bill, went to Smith Hill yesterday to tell state tax regulators they would much rather work in Rhode Island — and sincerely hope new curbs on the issuance of film-tax credits don’t squelch Rhode Island’s own share of the movie business.

“I’d much rather be paying taxes to … Rhode Island,” Bill Ryding, of Warwick, told a panel holding a hearing on a proposal to more directly link the marketable income-tax credits Rhode Island provides movie and TV producers to money actually spent in Rhode Island and paid to Rhode Island residents.

The state has already promised $52 million and paid $30.8 million in tax write-offs as an incentive for the production here of 22 movies, TV shows and ads. Because they are of use only to people who owe Rhode Island taxes, the credits are generally sold to brokers who sell them to people who can use them.

To get a tax credit equal to 25 percent of its Rhode Island production costs, a company has to spend a minimum of $300,000 on items that are “directly attributable to activity within the state.”

The state’s Film & Television Office has, up until now, taken its cues from the private accountants working for the film companies who have interpreted this phrase to mean: “All goods and services purchased for use in the production of the film in the state of Rhode Island will be included as a ‘state-certified production cost’ even if purchased outside of Rhode Island or from a non-Rhode Island vendor.”

That interpretation may have been costly to Rhode Island, according to records obtained by The Journal after a 15-month legal battle with the state film office and local lawyers for the out-of-state production companies.

The production company that spent 26 days here filming Hard Luck, a feature film starring Wesley Snipes and Cybill Shepherd that went straight to DVD, received a $2.65-million tax credit. That represented 25 percent of the roughly $11 million the company reported spending in Rhode Island on the production. But only $1.9 million of the $11 million went to “Rhode Island vendors or residents.” With no rules that clearly define what constitutes a “certified cost,” state officials wrestling with a massive state deficit are attempting to limit the credits to money spent here, as opposed to food or wardrobe trucked in from somewhere else.

The oral testimony was brief; the written testimony delivered in advance more extensive and pointed.

For example, a letter from Adler Pollock & Sheehan, a local law firm that has represented out-of-state producers, argued there is “no support” in state law for differentiating between amounts paid in-state and to non-Rhode Island vendors.

“The only relevant requirement in the statute is that the costs and expenses on which the credit is based be attributable to activities conducted in Rhode Island,” argued lawyer H. Hans Lundsten.

In its own letter, the Motion Picture Association of America asked to be freed from having to thank Steven Feinberg, the director of the Rhode Island film office, by name in the closing credits of each movie to receive the tax credits. “This is not required by statute, nor is it a requirement in ANY other state.” The trade association suggested changing the definition of “Rhode Island vendor” to mean “a vendor that is qualified to do business in Rhode Island.”

The letter from Angela H. Miele, the association’s vice president for state tax policy, also argues for letting the film companies decide what the public can see: “Our members are concerned that some of the application information may be subject to the public records laws of Rhode Island.” To address this concern, she suggested adding language to say; “If an applicant submits information it considers to be of a confidential nature as part of its application or request for a tax credit certificate, such information shall be marked or labeled ‘CONFIDENTIAL’ in capital letters” and the film office “shall not disclose the materials to the public.”

Gary Glassman, a principal in Providence Pictures, a local documentary-production company, argued for rewriting the rules to encompass pre-production and post-production expenses. Glassman told the panel that while he produced one of the highest-rated shows — on the Parthenon — for the PBS series NOVA, his company didn’t qualify for the tax credits because the primary shooting locations were not, as currently required, in Rhode Island.

If his pre- and post-production expenses qualified for tax credits, Glassman said he would likely hire more staff.

Echoed Providence Mayor David Cicilline in a letter hand-delivered by his director of art, culture and tourism, Lynne McCormack: “Providence and Rhode Island are situated between the two largest documentary producing cities in the United States, Boston and New York. The potential for attracting some of this work to Rhode Island is strong,” so any revision that makes the tax credits more available to documentary-makers goes to the original intent of the program: “to establish a permanent industry based in Rhode Island.”

Yesterday’s hearing panel included Feinberg, Michael F. Canole, chief revenue agent for the state division of taxation, and lawyer Gerald F. McAvoy. The public has seven more days to submit written comments, before the regulations are shipped as is — or with changes — to the secretary of state’s office within the next 20 to 25 days. If there are major changes, there will be another hearing.

kgregg@projo.com