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UPDATED: State Investment Council Tightens Film Industry Loan Program

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SANTA FE — New Mexico’s State Investment Council has voted to do away with interest free loans for the film industry.

On a unanimous vote Tuesday, the council agreed to begin charging the national prime rate plus 1.5 percent on the loans that were developed to attract TV and movie filming in New Mexico. For the past nine years the loans have been made interest free.

The commission also tightened requirements for how much of a production’s shooting must take place in New Mexico and how many of the workers must be from the state in order to qualify for the loans, according to the Santa Fe New Mexican.

Critics claim the changes will kill the loan program. And they come on the heels of legislative action — pushed by Republican Gov. Susana Martinez — to cap tax rebates for the film industry.

Under the new loan rules, 85 percent of a production’s shooting must be in New Mexico, compared to a majority of days under the old rules. Additionally, 75 percent of the film crew, with the exception of the director, producer and certain other employees, must come from New Mexico, up from 60 percent. Similarly, three-quarters of a production’s payroll, excepting the director, producer and certain other employees, must go to New Mexicans.

Failure to meet any of those obligations would allow the SIC to demand immediate repayment of the principal and interest, officials said.

The changes represent the culmination of a months-long process by the SIC to overhaul its film loan program. Earlier this year, the agency cut it ties to a film adviser who was paid $260,000 a year.

Since 2002, the State Investment Council has approved about $240 million in no-interest loans to about two dozen film and TV productions, the newspaper reported.

Former Gov. Bill Richardson was a strong supporter of film industry incentives as a way to stimulate the economy and create new jobs. But Martinez, who took office in January, has said she is concerned the state is subsidizing the industry at the expense of education and other crucial programs. Several other cash-strapped states have also been reviewing such subsidies.

Jon Hendry of IATSE 480 last month said the SIC push to eliminate the interest-free loans would be seal the fate of the film loan program.

Hendry didn’t bother to repeat his gloomy predictions Tuesday.

“You know how I feel about this,” he told the New Mexican.

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May 25, 2011 9:40 a.m.

SANTA FE  — The State Investment Council is doing away with interest free loans for the film industry.

On a unanimous vote Tuesday, the council agreed to begin charging the national prime rate plus 1.5 percent on the loans that were developed to attract filming in New Mexico. It also tightened requirements for how much of the shooting schedule must take place in New Mexico and how many of the workers must be from the state.

Critics told The New Mexican newspaper that the changes will kill the program.

Under the new rules, 85 percent of a production’s shooting must be in New Mexico and 75 percent of the film crew must come from New Mexico. Likewise, three-quarters of a production’s payroll must go to New Mexicans.

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