Critics say new bill would "gut" film incentives, cost jobs

A new bill introduced in the state House would impact the film production tax credit in North Carolina
A new bill introduced in the state House would impact the film production tax credit in North Carolina

WILMINGTON, NC (WECT) – A bill filed Thursday in the state House is raising concerns about the future of North Carolina's film credit, which many credit with helping to lure productions such as Iron Man 3, Safe Haven and Revolution to the Wilmington area.

HB 994, co-sponsored by Rep. Rick Catlin (R-New Hanover) and Rep. Chris Millis (R-Pender), Rep. Paul Stam (R-Wake) and Rep. Paul Luebke (D-Durham), seeks to make the film production credit non-refundable.  According to Millis' explanation, film productions would no longer receive a refund from the state for any income tax credit. Under the proposed bill, the production would instead be entitled to carry the surplus credit forward for the next five years, to use against any future tax liability.

"Individuals in the District and across this State deserve a government that is accountable with their tax dollars," Millis said in a statement.  "HB 994 brings more accountability to our state government by reforming the ability for film productions to carry over their tax credits, instead of receiving a check cut directly from the coffers of hardworking taxpayers."

Catlin said he does not expect the bill to make it past committee, but he supports it in order to begin the conversation of reforming incentives altogether. He said companies should stay in North Carolina to spend the incentives they receive.

"If they don't stick around and work with us, they don't get them," he said.

Research on film incentives will continue, according to Catlin.

Johnny Griffin, Director of the Wilmington Regional Film Commission, says the bill came as a shock to him. Griffin says none of the bill's sponsors mentioned it to him before he was told of its introduction by our own Jon Evans. Griffin says the bill will do a lot of damage to film production in North Carolina, if it passes in its current form.

"This will basically offer an empty incentive," Griffin said. "Yes, we'd have a film incentive, but no one will be able to use it. Maybe you can find a couple local companies that could benefit from this, but it's more important to focus on the majority of production companies that do not have tax liability. They come down, spend and leave. Even though they are giving this incentive, they still are taxed through sales tax on things they purchase, and payroll tax for paying local workers."

Rep. Susi Hamilton (D-New Hanover) calls the bill a "jobs killer" for the film industry. "All this bill does is eliminate jobs," Hamilton said. "No incentives, no film industry. This bill kills jobs in North Carolina."

In a text message Thursday afternoon, Sen. Thom Goolsby (R-New Hanover) said he does not support the proposed legislation

House Bill 994 would make film incentive credits non refundable to production companies retroactively to January 1, 2013. That would impact productions shooting in the state right now, including the NBC series Revolution and Under the Dome, which will air on CBS later this year.

"Just the fact that this bill has been introduced, regardless of changes, is enough of a sign to production companies to possibly not come here," Griffin said.

"This is not a jobs killer," Millis said when told of the early reaction the bill has received. "This is not a debate of repeal at this time but of reform".

Click here to read the full text of the bill.

Supporters of the tax incentive program are planning a rally at 1:45 on Saturday, April 20, at Riverfront Park.

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