Gov. Michelle Lujan Grisham said she was going to take the “shackles” off the state’s film industry by removing an annual $50 million cap on tax rebate payouts to eligible production companies that film in the state.
While she didn’t exactly get her wish, Senate Bill 2 comes close. It increases that cap from $50 million to $110 million, appropriates $225 million to pay off a backlog of film tax credits owed to production entities and, to sweeten the deal, offers another 5 percent in tax rebates for productions that shoot in rural areas.
The House of Representatives voted 41-24 to approve Senate Bill 2 after a nearly three-hour debate around 3 a.m. Friday. One Democrat, Candie Sweetser of Deming crossed party lines to join 23 Republicans in opposing the initiative.
The Senate had already approved the bill, so it is now on its way to the governor’s desk for approval. Her spokesman, Tripp Stelnicki, said Friday that she will sign it into law.
“Film is an economic engine like no other,” said Sen. Nancy Rodriguez, D-Santa Fe, sponsor of the bill.
Under a film incentive program signed into law by former Gov. Gary Johnson in 2003, filmmakers can qualify for 25 percent tax rebates on qualified expenses for projects shot in New Mexico. Television production companies that bring long-term series to the state can receive rebates of 30 percent.
The tax credits are paid by the state in varying formulas, but over the years, the $50 million cap in payouts has led to a backlog of more than $300 million.
Opponents, including many House Republicans who opposed the bill, say the state is losing out by giving away such tax deals because that money can be used for other purposes, such as public education or public safety.
But supporters say the deal pays off in terms of the amount of money those companies spend in the state.
Alicia Keyes, secretary of the Economic Development Office, told a House committee Friday afternoon that since 2003 the film business has invested $3.4 billion in direct spending in New Mexico.