North Carolina lawmakers are pushing through a hefty increase in the tax credit for movie makers even though a study commissioned by the state film office says the state would lose money on the deal for at least two years.

The experience other states have had with film credits suggest such an incentive might not pay for itself, leading some Republicans to question giving such a tax break as the state's cash crunch puts teachers in the unemployment line.

But representatives of the film industry and North Carolina's film office say the payoff will be down the road. They argue that the tax credit will lure jobs to the state.

As a bonus, Screen Gems Studios, which already operates studios in Wilmington, has pledged to build a production studio in Charlotte if the state increases the handout to Hollywood.

The Senate on Wednesday gave final approval to legislation that would raise the film tax credit from 15 percent to 25 percent of qualifying expenditures in the state.

The bill now goes to the House. (N&O)

APPLE BITES: This week it was all about Jobs — with a lower-case and upper-case J. The same day that Gov. Beverly Perdue signed into law changes to the state's corporate taxes designed to lure Apple, the company founded by Steve Jobs announced it would build a $1 billion data center. Opponents of corporate incentives, meantime, felt more like the biblical Job, suffering yet again.

BURR'S CRUSADE: U.S. Sen. Richard Burr stood up for tobacco in the Senate. The Winston-Salem Republican spent more than four hours on the floor arguing against a bill to allow the U.S. Food and Drug Administration to regulate tobacco. He said it would stifle innovation in nicotine delivery systems and hurt the "gold standard" of food and drug oversight. He and Democratic Sen. Kay Hagan proposed an alternate bill.

EMPTYING HOUSE? Another state representative is leaving. Rep. Bonner Stiller, a Brunswick County Republican, will step down this month to spend more time with his family. He joins four other legislators this term who've stepped down to accept a gubernatorial appointment (Rep. Linda Coleman) or move to the state Senate (now Sen. Dan Blue) or because they died (Sen. Vernon Malone) or were under investigation (Rep. Cary Allred).

IN OTHER NEWS: An East Carolina University professor will discuss his studies of the vice presidency with Joe Biden. ... Elizabeth Edwards is not interested in running for U.S. Senate, but she will open a furniture store in Chapel Hill. ... Former U.S. Sen. Elizabeth Dole will make her first political appearance since losing in November when she introduces one-time GOP presidential candidate Mike Huckabee in Charlotte next week. ... Hagan ran into Supreme Court nominee Sonia Sotomayor in the ladies' room at the Capitol.

Given all the secrecy with the incentives deals to land companies in North Carolina, it's no surprise that negotiators give them code names.

Take Apple, which could receive as much as $46 million in tax breaks over a decade for spending $1 billion on a computer data center in what will likely be the western part of the state. Gov. Beverly Perdue made that deal official on Wednesday, Dan Kane reports.

That project, according to state Sen. David Hoyle, was code named "Dolphin."

He had no idea why.  At the very least, it doesn't outright clue you to one of the world's best known computer and computer-related gadget makers.

Hoyle, a Gaston County Democrat and Senate Finance Committee co-chairman, has often said he is not a fan of these incentives, but the state has to play the game or lose well-paying jobs to competing states. He said this week he learned that the state lost out on a bid to bring a company with 750 jobs to Cleveland County.

"Project Flyer" had flown to Atlanta, he said.

Another prospect remains up for grabs in Gaston County, he said. This one would bring about 170 jobs paying an average annual salary of $55,000.

But Hoyle said this company is driving a hard bargain, saying the state has to be more competitive.

Maybe the code name is fitting on this one: "Project Barracuda."

Apple Computer will build a data center in North Caroilna.

Gov. Beverly Perdue this morning signed into law a bill that would give the company millions worth of tax breaks. The company then promptly announced it would build a facility in the state. The Cupertino, Calif., based company is expected to invest more than $1 billion in the project over nine years. The incentive law requires that investment for Apple to get its tax breaks.

"We welcome Apple to North Carolina and look forward to working with the company as it begins providing a significant economic boost to local communities and the state," Perdue said.

Perdue's news release did not specify exactly where the facility would be located.

Critics of the incentive, worth $3 million a year at first, said the state is spending a lot of money to create a few jobs. The facility is expected to employ at least 50 full-time employees, according to a news release from the governor's office. It would also attract as many as 250 contractors.

More after the jump.

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The N.C. Institute for Constitutional Law is questioning the Apple incentives.

Executive Director Bob Orr, a former member of the N.C. Supreme Court, said in a statement today that the incentives violate state laws that require tax exemptions be uniform.

"This legislation favors one corporation over all of the existing corporate citizens of our state, particularly those who have made large investments over the years," he said.

Both chambers of the state legislature have passed versions of a bill rewriting corporate tax laws in a bid to lure Apple computer, which is looking for a location for a $1 billion data center.

The tax breaks would be worth between $3 and $12.5 million a year.

Orr, a longtime opponent of corporate incentives, said the institute has e-mailed its legal opinion to Gov. Beverly Perdue.

iLEGISLATURE: State legislators may rewrite the corporate tax law in a bid to lure Apple computer, which is looking for a spot to locate a $1 billion data center. The tax breaks could be worth about $3 million a year in the first years and eventually grow to $12.5 million a year. The bill passed the House this week but must go back to the Senate for final approval.

PRE-RACE WARMUP: Contenders for the 2010 elections continue to get shuffled. Democrats are mulling six candidates for U.S. Senate: Reps. Heath Shuler and Mike McIntyre, state Sens. Malcolm Graham and Dan Blue, Iraq vet Cal Cunningham and Durham lawyer Kenneth Lewis. Meantime, Republicans lost first-round draft pick Mike Minter, who declined to run against Rep. Larry Kissell.

DUKING IT OUT: Supreme Court nominee Sonia Sotomayor is taking heat for remarks she made at Duke University in 2005. An Appeals Court judge, she said the court is "where policy is made." Conservatives said that means she'll legislate from the bench; liberals said she simply meant interpreting vague laws. Forum moderator Erwin Chemerinsky said it's much ado about an "innocuous" remark.

IN OTHER NEWS: Former GOP presidential candidate Mike Huckabee will hold a fundraiser in Charlotte in June. ... Mike Easley Jr. is working at the same law firm as Richard Vinroot, who ran against his father in 2000. ... Gov. Beverly Perdue said she trusts her son Garrett is not lobbying state legislators, despite his recent attendance at a big event. ... The N.C. Association of Educators says it's "at war" over the state budget.

The House gave final approval Wednesday to a tax incentive designed to lure an Apple Computer facility to the state.

The bill, which lowers the corporate tax the company would pay, must go back to the Senate since the House modified the Senate's version. The House approved the bill 80 to 34.

The House's changes limited the bill to apply only to one company. State officials won't specify who they are trying to lure, but it is widely discussed that the company is Apple, which is considering the state for a data center, essentially a giant warehouse of computer servers, likely to run company services such as the iTunes music store and the application store for its popular iPhone.

The center would bring about 50 workers, although another 250 contractors could get jobs. The facility could grow to employ more as its mission expands.

The state House is considering an incentive to lure Apple.

The change in the state's corporate tax laws is designed to make North Carolina more attractive to a planned $1 billion Apple data center.

The House will vote Tuesday on the bill, which was recently changed to push the project to counties with a high unemployment rate. It passed the Senate ealrier this month.

The bill would change the way corporate income taxes are calculated by giving breaks to companies with a relatively small share of U.S. sales in North Carolina but which have large shares of their nationwide property and payroll here.

The breaks could be worth about $46 million over the next 10 years. (AP)