June 10--With no discussion, the state Senate gave third and final approval to a bill that would convert North Carolina's film tax credit program into a grant program, sending the measure to the House.
The measure, which also creates a public-private partnership for economic development, passed overwhelmingly with only seven senators voting against it.
The new program would have a $20 million budget for the 2014-15 fiscal year allocated from two state reserve funds. According to legislative staff, that compares to the roughly $60 million in tax credits paid out during the 2012-2013 fiscal year. The current film incentives package allows productions that spend at least $250,000 in the state to claim 25 percent of their qualifying expenses up to $20 million.
Under the Senate plan, film companies would have to spend more to qualify for that 25 percent rebate and payout caps would lower significantly.
For a major motion picture feature, the spending threshold would increase to $10 million and the grant payout would be capped at $5 million. For television production, companies would have to spend at least $1 million per episode to qualify, with a payout cap also of $5 million. For commercials, a qualifying company would have to spend at least $500,000, with a payout cap of $250,000.
These criteria would likely still appeal to movies with $10 million to $20 million in qualifying expenses, such as "Tammy," the Melissa McCarthy film that spent $14.5 million in the state last year and received a $3.6 million rebate from the state. But it would take only six movies of that size to drain the $20 million allotted for the proposed program.
The bill would still have to earn approval of the House and governor before becoming law, and it's unclear whether that will happen.
Gov. Pat McCrory has also floated a film tax credit program that is significantly different than what currently exists, while a bipartisan group of House lawmakers put forth a bill to extend the tax credit program and lift its Jan. 1 sunset date.
In other news, Speaker Thom Tillis and House Republicans plan to unveil their spending plan Tuesday.
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