Today’s vote by the House Finance Committee that defeated a proposal to extend a modified version of the state’s film tax incentive has prompted rebuke from the executive vice president of EUE/Screen Gems Studios in Wilmington.
Executive Vice President Bill Vassar said in a statement that Rep. Ted Davis (R-New Hanover) offered his proposal for a modified incentive with the understanding that he had the support of fellow Republican legislators to see it passed. That proposal, to lower the current 25 percent refundable tax credit to 22.5 percent, and to lower the maximum credit allowed from $20 million to $15 million, failed on a 20-16 vote.
A statement from Vassar described the vote as a ‘betrayal.’
“Yesterday, Rep. Ted Davis started drafting new legislation in the NC House that would keep those three components intact,” Vassar said, referring to the state’s available crew, variety of locations and attractive incentive.
“Last night, Rep. Davis was told he had the support of seven of his Republican colleagues. That was not the case this morning when those Republicans pulled their support at the direction of the House Leadership,” Vassar said. “This shameful maneuvering leaves us now with Senate Bill 743—which guts our industry.”
As written, that bill would see incentives handled under a grant fund concept as opposed to the refundable tax-credit model. As written, productions that could qualify for the incentive under the grant concept are feature-length films that spend $10 million, TV series that spend at least $1 million per episode, and commercials that spend $500,000. Grants would be limited to one per production and could not total more than $5 million for films, $5 million for TV series and $250,000 for commercials.
Vassar said that plan would make North Carolina less attractive to film productions.
“Our clients have already told us they can’t build a budget around a grant program. SB 743 will render our industry DOA with decision makers who place productions globally,” Vassar said.
Vassar’s full statement follows below:
Statement from Bill Vassar
Executive Vice President, EUE/Screen Gems Studios Wilmington, NC
June 11, 2014, 3:52 pm
After 18 years of privately investing, building and nurturing the film industry in North Carolina, my company is shocked and stunned that events in the House Finance Committee this morning left the North Carolina film industry seriously, perhaps fatally weakened. Our company has been at the forefront of building a robust content production industry that has spent $1.2 billion in NC over the last five years. Our studios represent North Carolina’s largest private stakeholder in the industry.
Today, we urge the North Carolina Legislature and Speaker Tillis to rethink this morning’s actions, and we welcome the opportunity to collaborate with you to keep 4000 North Carolina film jobs alive.
The Cooney family invested our company’s private money (we receive no incentive funds) to build Stage 10, the anchor stage that helped us land “Iron Man 3″ and bring $130 million in spending to the state. We have worked tirelessly to help legislators understand that three things are required to have a healthy film industry:
1) Seasoned, well-trained crew. Ours in North Carolina, and especially in Wilmington spans three generations.
2) Diverse shooting locations to accommodate a wide variety of scripts and settings.
3) The incentive. And a competitive incentive—above 20 percent with reasonable caps.
Yesterday, Rep. Ted Davis started drafting new legislation in the NC House that would keep those three components intact. Last night, Rep. Davis was told he had the support of seven of his Republican colleagues. That was not the case this morning when those Republicans pulled their support at the direction of the House Leadership. This shameful maneuvering leaves us now with Senate Bill 743—which guts our industry.
SB 743 will take us out of Tier One consideration. Tier One means that we are one of the first states a TV Series or film considers when planning to shoot and spend tens of millions of dollars. Our clients have already told us they can’t build a budget around a grant program. SB 743 will render our industry DOA with decision makers who place productions globally.
Today, Rep. Ted Davis valiantly tried to propose new film incentive legislation that would keep our state’s industry and 4000 fulltime film jobs viable. Today, Speaker Tillis and the House Republicans gave us the signal they don’t want North Carolina to continue as a dominant player in the global film industry, an arena where the United States is still the number one player.
The House leadership is destroying a valuable North Carolina industry. We are re-examining our commitment to North Carolina. Unless new legislation is generated and approved in the coming hours, it’s clear we are not welcome to invest our company’s money, time and talent here any longer.”