Tuesday, August 01, 2006

Improving Our States Economy

Legislators passed several bills last week that were aimed at improving our state’s economy and creating jobs. First, we approved changes to the William S. Lee Act, which has created at least 135,000 new jobs since it took effect in 1996. The program, which is the state’s primary economic incentives tool, provides tax credits to businesses that create jobs in poor and impoverished communities. The state’s 100 counties will now be grouped into three categories, or tiers, instead of five.

Companies that agree to build in 40 counties considered the most economically distressed would be eligible for the highest per-job credit of $12,500. Companies that build in the 20 most economically vibrant counties, largely in the urban Piedmont, would continue receiving $750 per job. Job creation in the 40 counties in the middle would warrant $5,000 per job. Development zones, or economically distressed areas where companies can receive more lucrative tax credits, would be replaced with smaller “urban progress zones” designed to better target impoverished areas. The bill also creates “agrarian growth zones” to provide similar improved credits for certain rural areas. Jobs must meet certain wage thresholds to qualify for the credit.

Secondly, we restored a tax credit for television and video production companies that agree to film in North Carolina. Last year, lawmakers approved a 15 percent refundable tax credit on companies that spend at least $250,000 on a production; however, the 15 percent credit turns into 8.1 percent for companies that file a North Carolina tax return because they must also pay the state’s 6.9 percent corporate income tax on the expenses they claimed to get the credit. The bill, approved by a vote of 77-25 in the House on Thursday night and sent to the Governor for his signature, accepts the Senate version of a House bill that repeals several laws so the film production companies can receive the full 15 percent credit. State film officials have said the quirk in the 2005 law meant the state didn’t land as many film productions as they would have liked, but hope to bring additional film projects to our state in the coming years.

North Carolina ranks third nationally in revenues from film, television, and commercial production and has held this position for the past 21 years. Our state has hosted more than 800 motion pictures, 14 network and cable television series, and countless national and regional television commercials generating more than $6 billion in revenues for local economies, and is currently in talks with 20 potential new projects.

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