Governor Signs Bill Giving Economic Incentives to Film Companies

 

(HADDONFIELD) – Recognizing that creating jobs for New Jersey must be our top priority, Governor James E. McGreevey signed into law today the New Jersey Film Production Assistance Program, which is designed to attract more film industry projects to the State. 

 

“While over 325,000 jobs have been lost across the country this year, we have created nearly 35,000 new jobs, and are the only state among the eight most populous in the nation whose unemployment is below the national average.  But I am by no means satisfied,” said McGreevey.  “The Film Production Assistance Program is yet another way we are bringing new business and new jobs to the State.”  National research shows that for every dollar spent in film production, two dollars on average is created in additional spending. 

 

To kick off the initiative, the Governor was joined by a host of celebrities including William Baldwin, Alec Baldwin, Paul Sorvino and Michelle Lee, as well as Sopranos’ actors Federico Castellucio and Vincent Curatola.  Also at the event was legislative sponsor Assemblyman Louis Greenwald, as well as New Jersey Film Commission Chairman Michael Proscia and New Jersey AFL-CIO President Charles Wowkanech.

 

The New Jersey Film Production Assistance Program is designed to attract greater industry investments and create more jobs.  The program offers guaranteed loans and tax credits, in addition to State surplus property that could be used for projects.  Until now, film projects did not meet Economic Development Authority (EDA) eligibility requirements because of their temporary nature.  Previously, EDA’s enabling legislation, required that for each $35,000 in EDA financing, at least one permanent, full-time job be created. The new law amends EDA’s enabling legislation requiring applicants for assistance to create permanent jobs.

 

"With this bill, we designed an incentive program around the needs of the film industry with elements such as changing EDA requirements to allow for temporary projects like filming a movie or offering State surplus property for a television series," said McGreevey.  "This film program is representative of ways we can be smarter and more innovative to prosper in these tough economic times."

 

To be eligible for the program, at least one-half of material and production costs must be spent in New Jersey, more than two-thirds (70 percent) of the shooting days must take place in the State, and the prevailing wage must be paid to workers employed in a project under the program.  Loan guarantees cannot not exceed 30 percent of the bank financing cost of the project, or $1.5 million, whichever is lower, and the project must possess performance bonds.

 

If at any time the EDA determines that a film production company does not meet the established criteria, financial assistance can be withdrawn.

 

“This new law is opening up this incentive program to the film industry,” said EDA Executive Director Caren Franzini. “The good news for New Jersey is that this new financing tool to attract this industry to our state has no impact on the state budget.”

 

Franzini noted that the EDA does not utilize monies from the state general fund for its EDA’s loan guarantee program, which goes unchanged by the new law. Under the new law, the EDA will guarantee repayment of a portion of the principal of a loan made by a bank or other financial institution.

 

The EDA will also propose regulations which will require that the distribution of the film be verified prior to receiving EDA assistance, and that funding must already be in place through a financial institution with film industry experience.

"New Jersey cannot afford to sit back and watch film production companies be lured away to Canada and Europe," said Assemblyman Louis D. Greenwald (D-Camden). "New Jersey already offers a full spectrum of shooting locations, an ample source of supporting businesses and a readily available workforce. The assistance program will complement these characteristics by providing the economic incentive needed to attract the film and TV industry in today's fiscal climate."

"New Jersey is the birthplace of many well-known, respectable actors," said Assemblyman Anthony Impreveduto (D-Hudson). "Fostering a healthy production industry within the state will put New Jersey on the map for making movies and TV shows, as well. The Film Industry Assistance Program will bring in more revenue and give New Jerseyans another reason to be proud of their state."

"With this measure, New Jersey is finally going to have the opportunity to make a name for itself as a national leader in film production," said Senator Joseph F. Vitale, D-Middlesex. "Today marks the beginning of an exciting time for our state, as we welcome an industry which will create thousands of jobs for New Jersey residents."

"This law will ensure that New Jersey no longer loses valuable, job-creating film projects to other countries and other states in the U.S.," said Senator Shirley K. Turner, D-Mercer.  "New Jersey is a richly diverse state and cities like Trenton are in a unique position to experience economic revitalization through this new state industry."

In addition, under regulations, EDA could also place a program incentive fee on the project, enabling the Authority to be compensated on a percentage of the loan guarantee amount. This would allow the Authority to benefit from film products that are successful, which would help the Authority defray the costs of those projects that do not see profits and are unable to honor their bank loan, thus exposing the Authority. Sponsors have indicated their desire to work with EDA on this issue.

 Under the McGreevey Administration, the EDA has invested $1.4 billion in 493 projects, supporting 2,632 new jobs and 7,192 construction jobs.

 

At the present, more than 30 states offer film industry incentives to create more jobs in their state, with more competition coming from abroad in places like Canada, Australia and New Zealand.  This past year the New Jersey film and television industry enjoyed its most successful year ever.   A record 801 productions were filmed, generating $70.2 million.  Variety magazine, in its most recent survey, ranked New Jersey as the fifth most active state for film and television production in the nation.

 

The New Jersey Film Production Assistance Program will serve as yet another economic engine for the state. Earlier this month, the Governor highlighted ways that the business sector can use the new BEIP program to their advantage.  Both programs focus on job creation and long-term economic development.