Here is a brief summary of the efforts Eno River Media Production in league with our Lobbyist Tony Adams have taken to continue the North Carolina Film Incentive in a new direction.
Tony Adams; President of Adams and Associates Government Relations, Chandler Vatavuk; President of Eno River Media Production, John Demers; noted North Carolina Producer, Director, Actor, Writer in the NC Film, TV, and Commercial Industry, Anthony Dowling; Executive Director of ERMP and Patrick Manns, Director of Communications for ERMP have walked the halls of the North Carolina Legislature Building establishing legislative contacts and gathering responses over the past two weeks regarding our suggested changes in the film incentive program. Our film incentive program will, if enacted, greatly increase the incentive for North Carolina based companies to create full time jobs in our state while continuing to attract external companies that desire to bring their productions to North Carolina.
We have met with 35 members of the House and Senate in the last several days and will be meeting with many others over the next couple of weeks. Among the legislators we have had meetings with are several key leaders in both the House and Senate, including the House Speaker Pro-Tem, the House Majority Leader and Majority Whip, two Deputy Majority Whips, the Chair of the Appropriations Committee and two Vice-Chairs, the Chair of the Commerce Committee and three Vice-Chairs, the Vice Chairman of the Finance Committee, and several other influential members of the House. In the Senate we have met with Majority Whip, the Joint Majority Caucus Leader, the Co-Chair of the Finance Committee, and other influential members. We are in the process of setting up meetings with other key Senate leaders during the next several days. Also, we have met with the Speaker of the House’s chief of staff and the chief of staff to the Senate majority Leader, whom we will be meeting with next week.
We have also had meetings with the head of the NC Film Commission, been interviewed and had discussions with staff of the John Locke Foundation and by the chief state legislative reporter for the Associated Press. On Thursday March 13th, we met with the lobbyist representative for Screen Gems Studio to discuss with them our proposals for making the film incentive program more effective and beneficial for North Carolina based media production companies and our ideas on increasing industry-wide employment of North Carolina workers. We are also working on having our proposals put before the Secretary of Commerce and Governor McCrory, who will be meeting sometime next week with Secretary Decker, Deputy Budget Director Art Pope, his Legislative Liaison Fred Steen and his policy team, to discuss the film incentive study conducted by NC State’s Dr. Rob Hanfield, which should be available next week.
Overall, we have been receiving very receptive responses from the legislators with whom we have met to our proposals for changing the film incentive program to more effectively benefit North Carolina based companies and to concentrate the program’s objective on creating significantly more full-time jobs throughout the state. Even those legislators who have expressed opposition to or have reservations about the incentive program have been very receptive our proposals for changing the incentive program to benefit North Carolina’s home grown companies and to use the changes we suggest to boost employment figures throughout the state.
All in all, we have made significant headway in a very brief amount of time with getting our proposals heard and seriously considered, and it is my belief that many, if not all, of our proposals for positive change in the program will be enacted.
Please read our concept for a North Carolina film industry incentive:
The current North Carolina Film Incentive is due to expire on December 31, 2014. It is evident there is a need for Incentive adjustments to maintain and expand North Carolina’s film industry.
It has been inherently difficult to assess the current incentive’s effectiveness due to a lack of identifying metrics; consequently this has yielded conflicting information from the sources responsible for studying the incentive’s effectiveness. So the question arises, is the incentive worth the expense? Several sources have gauged its effectiveness with vastly differing results, causing the opposition and the proponents to embrace the reports that support their initial view of the NC film incentive. There are those who believe the current program does not reap benefits that justify its expense of over $160 million since its introduction. Therefore, discussions have been opened to alternative incentive concepts.
Eno River Media Productions brings forward a state budget friendly concept that will empower the NC film industry, its associates, and interstate counterparts while expanding the industry in the state of North Carolina and providing solid metrics to state regulators. The key points of the proposal are below:
1. Qualification of Media Production Firms
a. A set of criteria developed that will allow state regulators to qualify certain businesses in the state as media production firms that are eligible to participate in the proceeding programs
A qualified business satisfies the following criteria:
a. Operates as a video production business
b. Has at least one full time employee making at least $15,080 a year
c. Must have paid NC State taxes as a business for at least 1 year just prior to request
d. Have a current and valid USA Tax ID and NC Department of Revenue ID
e. At least 51% of the business income is generated from video production product or service
2. Incentivized Reimbursements based on Jobs Created
a. Qualified Media Production firms will received an incentive reimbursement on a percentage of income taxes paid by their employees
b. An initial percentage will be set for the incentive based on criteria to be devised. Year to year if the company acquires new full-time employees the incentive they receive will increase based on the number of W2s and 1099s filed and not based on any total fiscal number.
c. A qualified video production business may apply for incentive rebate at the end of their second year in the incentive program for 1099s issued the previous year.
d. 1099 incentive is a fixed percentage amount per 1099 incident. The 1099 incentive will not increase over time – no matter how many employees are hired.
e. Full time employment incentive is increased each year based on adding more full time employees. An employee making at least $15,080 a year must be hired in order to qualify for the increased incentive percentage.
3. Incentive Reimbursements for taxes paid on services rendered by Qualified Media Production Agencies
a. Finally, external companies composing a production in North Carolina will receive an incentive rebate on taxes paid while enlisting the services of firms that qualify as media production companies.
To make this proposal budget friendly, a cap of $80 million is set for the first year. Based on metrics for participation, each future budget the cap may be set more or less from the original $80 million. To answer constitutional questions about incentives, this proposal may be enacted via tax law or performance grant.
This program would greatly increase the incentive for North Carolina companies to create full time jobs in our state while maintaining accommodations for external interests who wish to compose their production in North Carolina. In addition, our proposal would provide solid metrics reflecting the efficiency of funds allocated to said initiative while minimizing the cost in scenarios where the incentive is not as effective as we would like it to be. North Carolina would be responsible for minimal output, Incentives would only be substantial in cases where jobs and opportunities are being provided for fellow North Carolinians; an expense which most would agree is a more than worthy investment.