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Tuesday, May 21, 2024

Film credit program added to Senate calendar

Three weeks after the Senate left Raleigh—and left questions unanswered about the state’s film credit—the proposal to convert the state’s expiring film incentive into a grant fund program is on the Senate’s calendar this week.

Cameras fill the conference room at the New Hanover County Government Center in August for filming for HBO's "Eastbound & Down." Photo courtesy New Hanover County.
Filming for HBO’s ‘Eastbound & Down’ at the New Hanover County Government Center, 2013. Photo courtesy New Hanover County.

That calendar includes a House bill called “Various Tax Law and Film Grant Changes,” altered from a previous version of the bill that dealt with laws regarding child support requirements. The bill is to be addressed when the Senate convenes Wednesday at 4 p.m., according to the calendar.

The Senate left Raleigh at the start of this month without specifying when—or whether—it would resolve the latest proposals for the film credit program, a grant fund version of which was included in the approved $21 billion state budget but lacked details as to how the fund would be administered.

Related story: Senate leaves Raleigh; film credit’s future doubtful

The changes in the bill state the program would be administered according to guidelines that the department of commerce would later adopt. Those guidelines, the bill states, would allow the secretary of commerce “to award the grant proceeds over a period of time, not to exceed three years.”

Those funds could be used to provide a credit of up to 25 percent on a production’s qualifying expenses, with caps of $5 million for a feature-length film, $5 million for a single television or video series episode, and $250,000 for a commercial.

As approved in the budget, the grant fund would cap the amount of credits that could be awarded to productions at $10 million for the first six months of 2015—replacing the current, refundable tax credit, which provides a 25 percent break on taxable expenses for productions that spend at least $250,000.

That credit, called an incentive, includes a sunset clause that calls for it expire at the end of this year.

Industry representatives have credited that incentive with helping to attract more productions to the state in recent years. They say the proposed grant program—with a $10 million overall limit—could not maintain or increase the amount of filming in the state, which has seen an estimated $268 million in spending in the first six months of 2014.

Twenty-five percent of that, observers have noted, would generally equate to a credit payout of about $67 million.

The House had approved a proposal—put forth by Rep. Ted Davis of Wilmington—to extend the current incentive for one year, with an overall cap of $40 million. But the Senate’s departure left that proposal unanswered, and the fate of the state’s film industry in limbo.

Related story: Amid industry uncertainty, film commission looks to keep cameras rolling

The Senate had said it would reconvene later in the month, and again in November, to wrap up unfinished business. But those special sessions were to have limitations, and the film grant program was not specified. (Rules the Senate adopted confined the discussions mostly to veto overrides, Medicaid and coal ash disposal regulations.)

Reached Tuesday, Davis said he did not know why the Senate would even consider the bill—House Bill 189—after a larger bill, House Bill 1224, which dealt with economic development programs including the film credit, was voted down today in the House. Davis said his understanding was the Senate would only take up the film credit if 1224 passed the House first.

“I don’t understand why the Senate would be doing that if it was over for us to consider today and we didn’t consider it,” Davis said.

Davis said the changes before the Senate were being pushed by Sen. Bill Rabon of Southport, who led the initial grant fund proposal in the Senate during this year’s session. But Davis said those changes, even if approved, would not make an impact in attracting film productions.

A request to Rabon for comment was not returned Tuesday afternoon.

“I know Bill Rabon was pushing this tweak. But once again, while it may have had the effect of saving one major production—and that’s in the whole state; it actually was directed at one in Wilmington,” Davis said, “—it would not have saved everything, by any means, in Wilmington, much less everything across the whole state.”

Editor’s note: This is an updated version of a story that published earlier today.

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Jonathan Spiers is a reporter for Port City Daily. He can be reached at (910) 772-6313 or jonathan.s@portcitydaily.com. On Twitter: @jrspiers

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