The North Carolina state Senate voted today to approve a sharply diminished form of the state’s film tax incentives, which would slash funding for the program by two-thirds. The Tar Heel State’s current program, which has been beset by allegations of abuse, expires at the end of the year, and a proposed extension was facing an uphill political battle, with Gov. Pat McCrory calling for deep cuts in the program. On Thursday, the state Senate approved a proposal that would turn the incentives program into a grant program and substantially reduce its state funding, with a $20 million annual budget compared with $60 million last year. Legislators in the state’s House of Representatives, meanwhile, are pushing to extend the incentives as-is for another year. A final deal would have to be worked out by both chambers of the legislature and then signed by the governor.

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The MPAA, which encourages states to adopt or extend film tax credit programs, expressed its pleasure that North Carolina is continuing its efforts to offer incentives to producers to shoot in the state. “We are grateful the Senate has recognized the importance of motion picture and television production jobs in North Carolina by voting to give preliminary approval to continue a production incentive program,” said Vans Stevenson, the MPAA’s SVP Government Affairs. “We remain hopeful that the North Carolina House of Representatives, with its bipartisan bill, will work together with their Senate colleagues and the governor to reach agreement on a competitive, sustainable incentive program thereby ensuring motion picture and television production in North Carolina remains a catalyst for job growth and significant economic development in the state into the future.”

According to the MPAA, the film and TV industry is responsible for more than 12,000 jobs in the state, including more than 3,000 production jobs, and more than $538 million in wages from production and distribution-related jobs. Recently movie and TV shoots in the Tar Heels State include The Hunger Games, Iron Man 3 and Homeland.