California tax credit program will continue for two more years
California Gov. Jerry Brown has signed legislation extending the state’s film tax credit incentive program for two years.
The two bills, which contain $100 million annually in credits, were approved by the State Legislature on Aug. 31, the final day of the session. That set up a 30-day deadline for Brown to approve or veto the bills by Sunday.
Some $400 million has been doled out so far, with another $100 million in credits for the program to be allocated next June via a lottery by the California Film Commission.
“Every politician nowadays talks about job creation, but for too many, it’s just a political catchphrase,” said Sen. Ron Calderon (D-Montebello), who authored the Senate legislation. “With the signing of my bill, Gov. Brown joins me in demonstrating that we’re serious about keeping good jobs right here in the Golden State.”
Calderon noted in his announcement Sunday that California is has long been the home to hundreds of thousands of jobs in the film and television industry but that runaway production has seen many of those jobs and hundreds of millions of dollars in revenue move to other states offering much more lucrative incentives.
“We’re not talking about A-list movie stars or Hollywood moguls,” Calderon said. “The beneficiaries of the tax-credit program are the behind-the-camera workers — the grips, caterers, dry cleaners and ‘the little people’ who, at the end of the day, pay their bills at the kitchen table. Continuing the tax-credit program is a sure-fired, proven investment in our state’s economy and in the working families of California.”
Faced with a similar situation a year ago, Brown waited until the final evening to approve a one-year extension to the program with $100 million in credits. That legislation was authored by Assemblyman Felipe Fuentes (D-Sylmar).
Brown also signed Fuentes’ bill on Sunday, AB 2026, which similarly provides for the same two-year extension.
California’s program, approved in 2009 after years of pushing by showbiz and by then-Gov. Arnold Schwarzenegger, is significantly smaller than those in other states attempting to lure away production. Maximum credit is 25%, and demand far exceeds supply, with only 28 of more than 330 applicants being initially chosen in the most recent lottery in June.
In 2011, the number of California projects granted an allocation grew to 73 from the initial 29 because several larger projects withdrew from the program, and their credits were reassigned to many smaller budget independent projects. The program currently has three series receiving the credits and in production locally — “Rizzoli & Isles,” “Bunheads” and “Body of Proof,” which moved from Rhode Island last season after receiving the California credit.
Recently wrapped productions backed by the credits include HBO’s Liberace biopic “Behind the Candelabra,” Terrence Malick’s “Knight of Cups” and Halle Berry indie feature “The Hive,” which was slated to shoot in Ottawa before receiving the incentive. Indie feature “Baggage Claim” and cable series “Teen Wolf,” which relocated from Georgia after receiving the California credit, will start shooting in October.
Statistics from FilmL.A., which tracks shooting outside studio lots, showed that four TV series with credits — “Major Crimes,” “Pretty Little Liars,” “Rizzoli & Isles” and “Switched at Birth” — contributed 61 permitted days during the second quarter, or 1.8% of the total offlot TV shoots.
Chris Dodd, chairman of the MPAA, issued a statement in support of Brown’s signing: “The state of California took a big step forward today, thanks to Governor Brown and the legislature. “The two-year extension of the state’s production tax credit will keep California competitive for tens of thousands of production-related jobs. This is an important victory for California’s economy, our national economy and the hardworking men and women who comprise the film and television industry.”
A coalition of unions, including SAG-AFTRA, the Directors Guild of America, the Intl. Brotherhood of Teamsters and the Intl. Alliance of Theatrical Stage Employees, also issued a statement of support: “Unlike most other industries, ours is a highly mobile one — film and television production can be shot anywhere. Because of that reality, thousands of our members who live in California and want to work in California are dependent upon this state remaining competitive. We know firsthand that this program has created employment opportunities for them, and with that, health and pension coverage for them and their families.”