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Film incentive bill clears House in early-morning vote

March 15, 2019

Benicio Del Toro and Josh Brolin star in Sicario: Day of the Soldado, which was filmed in New Mexico. (Richard Foreman Jr./Sony Pictures)

SANTA FE ? A proposal to more than double New Mexico’s annual spending cap on film incentives won approval in the state House early Friday and now heads to Gov. Michelle Lujan Grisham.

The House voted 41-24 in favor of the legislation after a debate that started a little before midnight and stretched to nearly 3 a.m. Friday.

The proposal, Senate Bill 2, has been a priority of Lujan Grisham ? who pushed to lift or eliminate the cap during her campaign last year.

The Senate passed the bill 32-8 earlier this week.

The bill would raise the annual cap on state spending for film incentives to $110 million a year, up from $50 million now.

Rep. Antonio “Moe” Maestas, an Albuquerque Democrat who presented the legislation during the House floor debate, said New Mexico is well-suited to the film industry. The state’s natural landscapes, workforce and proximity to Los Angeles give New Mexico an advantage over competing locations, he said.

“We’re good at it ? we’re darn good at it,” Maestas said. “This is an opportunity to continue going to our strength and build this industry responsibly.”

Republican lawmakers raised legal questions about the legislation and slammed it as an unfair giveaway to one industry.

“We’re doing this on the backs of hardworking New Mexican taxpayers who aren’t able to write themselves this kind of special law,” House Minority Whip Rod Montoya, R-Farmington, said.

The measure would authorize one-time spending of up to $225 million over the next 16 months to pay down a backlog in film incentives. The backlog is projected to hit $382 million by the end of this year.

For future years, the bill would establish a $100 million rolling limit on accrued rebates ? a move intended to ensure the backlog doesn’t get out of hand.

The state now offers a 25 percent tax rebate to film companies for most direct, in-state spending, and long-running television programs are eligible for more.

Senate Bill 2 was sponsored by Democratic Sen. Nancy Rodriguez of Santa Fe. She initially proposed removing the cap altogether, but the legislation was amended before Senate approval.

Maestas said the bill has provisions aimed at increasing transparency and encouraging film production in rural parts of New Mexico.

Rep. Melanie Stansbury, D-Albuquerque, said the film industry is an important part of the state economy, employing caterers, seamstresses and others ? not just actors.

“I think a lot of people don’t realize this industry employs people in all trades, in all crafts,” she said. “We’re talking about welders and carpenters and machinists.”

Rep. Larry Scott, R-Hobbs, said the film industry relies on subsidies and will pick up and move if another state offers a better deal.

“Is that the economic development we want to foster in this state ? if it’s the kind of economic development we have to bribe to stay here?” he asked.

The $50 million film spending cap was imposed under then-Gov. Susana Martinez, a Republican who signed the legislation in 2011.