California Senate Committee Approves $400-Million-Per-Year Incentives Bill

Califronia Tax Incentives Sacramento Capitol
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A proposed expansion of California’s film and TV tax credit to more than $400 million cleared the Senate Appropriations Committee, with the legislation now headed to the Senate floor and likely to the desk of Gov. Jerry Brown.

The bill, AB 1839, would extend the state’s production incentives through 2021-22, expand eligibility to bigger-budgeted movies and most one-hour TV dramas, and provide extra incentives for certain types of post-production.

But the biggest impact of the legislation may be in the amount put forward for credits each year, lawmakers on Thursday said would be $400 million, or quadruple the amount of the current program.

The Appropriations Committee voted 5-0 to send the legislation to the Senate floor.

The legislation also is being revised to include an amendment that will phase out the current lottery system in favor of a different method for distributing the credits, with applicants ranked based on how many net new jobs they can create, according to Sen. Kevin de Leon, chairman of the Appropriations Committee. Producers have complained that the lottery makes it difficult to budget because their tax credits are left to chance. Exact language of the amendment was still being reviewed by legislative counsel, a spokeswoman for de Leon said.

“When it comes to fueling an engine of job creation with taxpayer dollars, we have an obligation to ensure we are doing everything in our power to maximize their return on investment,” de Leon said in a statement. “This way – we can finally be assured – clearly and transparently — that California’s taxpayers are receiving the maximum possible economic return on this investment.”

Supporters, including Los Angeles Mayor Eric Garcetti, say that a figure in the $400 million range would go a long way toward stemming the flight of production from the region, bringing it close to the level offered by the state of New York. But it is still uncertain if Brown will agree to such an amount.

The bill will next head to the Senate floor, after which the amended legislation will head back to the Assembly for a vote. It then will go to Brown’s desk.

Assemblyman Mike Gatto (D-Los Angeles), co-author of the legislation, said in a statement, “I’ve heard from so many people over the past year who have told me about their family being torn apart because production left the state. This proactive effort ensures well-paying jobs stay in California and families remain together.”

His principal co-author, Raul Bocanegra (D-Pacoima), said, “Passing this expanded and improved program is a critical step forward to bringing back high-paying film jobs to California.”

Update: The California Film & Television Production Alliance, which includes studios, unions and other organizations among its membership, issued a statement following the passage of the legislation.

“The bill approved by the Senate Appropriations Committee, under Sen. Kevin de Leon’s leadership, underscores a commitment to the hardworking men and women of California’s film and television production community and to putting an end to the loss of these middle class jobs. The bill includes some new amendments which we look forward to reviewing in more detail.”





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