California’s Expanded Tax Credit Set for ‘Veep,’ ‘American Horror Story’

HBO’s “Veep,” Fox’s “American Horror Story,” Touchstone’s “Secrets and Lies” and Viacom’s “Hindsight” have been approved to receive $25 million in tax credits under California’s expanded program for relocating to California.

The California Film Commission also announced six other new series — Touchstone’s “Code Black,” CBS’s “Crazy Ex Girlfriend,” Fox’s “Rosewood,” Universal’s “Heart Breakers,” HBO’s “Utopia” and HBO’s “Westworld” — had been awarded the credit conditionally along with the pilot for Fox’s “Snowfall.” Those seven shows will receive credits totalling $55 million, led by “Utopia” with $19.6 million and “Westworld” with $12 million.

The most recent season of “Veep” was shot in Maryland and the first season of “Hindsight” was shot in Atlanta.”Secrets and Lies” has been shot in North Carolina, where legislators have cut back on the state’s longstanding incentive program.

American Horror Story,” which shot its first two season in Los Angeles before moving to Louisiana, had already announced that it was moving back to Los Angeles for its fifth season. It’s in line to receive $9 million in credits while “Veep” will receive $6.5 million.

A total of 37 TV projects had applied for the credit.

“The newly expanded California Film Tax Credit is encouraging new TV production in the state and is bringing several projects from other states,” said Mike Rossi, senior advisor to Gov. Jerry Brown. “California remains the home of the stuff dreams are made of.”

The credit is aimed at putting the brakes on the steady erosion of productions leaving California for states with attractive incentive programs such as Georgia, Louisiana and New York.

“We are thrilled with the results of the program’s first application period,” said Amy Lemisch, exec director of the California Film Commission. “California crews and support businesses will begin to feel the impact immediately as these first 11 projects begin pre-production. The number of projects planning to relocate to California confirms that our expanded incentive program is already working.’

The first round of applications for the expanded program came last month and was open only to projects scheduled to begin production on or after July 1. The eligibility for tax credits has been expanded to include new TV series for networks, premium cable outlets, pilots and projects for Internet-based distribution.

A total of $55.2 million was made available for four categories: new series, which drew 16 applicants; miniseries, which drew three; movies of the week, which drew four; and pilots, which drew eight. Another $27.6 million has been reserved for series relocating production to California from out-of-state.

The 2015-16 fiscal year will mark a major expansion of the 6-year-old tax credit program, aimed at halting the erosion of California-based production to states with bigger incentives such as Georgia, Louisiana and New York. The annual allocation will rise from $100 million to $330 million, and applications will be ranked on how many jobs they will produce, rather than being selected by lottery.

The program expansion, enacted last year by California lawmakers, covers five years and $1.65 million in tax credits. The credit is set at 20%, but producers are eligible for an additional 5% “uplift” if they shoot outside the Los Angeles zone, commit to music scoring or music track recording in state or to do visual effects in California.

California has already allocated about $90 million for returning TV programs along with $10 million for independent features in the fiscal year. The next application period for the new program is scheduled for July 13-25 and targets feature films, which will receive $48.3 million, and independent projects, which will receive $6.9 million.

Another $92 million will be allocated during the rest of fiscal 2015-16. The new program awards tax credits only after selected projects complete post-production, verify the creation of in-state jobs and provide all required documentation, including audited cost reports.

The legislation established the allocation to each category: 40% will go to new TV dramas, movies of the week, miniseries, and recurring TV series; 35% will got to features; 20% will go to relocating TV series; and 5% will go to independent features. The credit is set at 20% of production costs with an additional 5% “uplift” if producers shoot outside the Los Angeles zone, commit to music scoring or music track recording in state or to do visual effects in California.

The 2014 legislation capped years of campaigning by unions and producers, dubbed the California Film and Television Production Alliance. The group issued a statement Tuesday, asserting that the 11 new TV projects demonstrate that the bill will have the impact sought.

“The thousands of jobs that will be created, the $216 million in wages that will be paid, and the $544 million that will be spent in California and poured into small businesses and vendors that support TV production will make a difference in the economy of this state and the lives of the people our organizations represent,” it said.

“In addition, the four veteran TV series that wanted—and are now able—to relocate to California are further proof that this legislation will have its intended result: creating jobs for Californians who want to live and work in their state.”

Los Angeles Mayor Eric Garcetti, who campaigned actively for the bill, also issued a statement Tuesday:

“Today, we learned that eleven television projects will receive tax incentives–proof that our hard work created thousands of jobs and hundreds of millions of dollars in new wages, much of which will be spent back into the Los Angeles economy.

These new jobs offer electricians, caterers, actors, and truck drivers alike, new opportunities in television production and the entertainment industry. Four existing veteran TV series can now afford to relocate to California, which means that more Angelenos in the entertainment industry will return to their home state.”

Under the previous program, the lion’s share of funds went to continuing TV series. More than $77 million of the $100 million available for 2014-15 was allocated to a dozen series, led by $11.5 million for “Teen Wolf,” “Rizzoli & Isles” with $8.9 million, “Pretty Little Liars” with $8.4 million and “Major Crimes” with $7.9 million.

The commission also announced Tuesday the list of 27 projects approved conditionally for the final round of state’s first-generation tax credit program, which held its final abbreviated lottery on April 1. The dollar figures add up to $100 million.

“Teen Wolf” led the new list with $10.3 million, followed by “Agent X” with $9.3 million, “American Crime Story” and “Major Crimes” both at $7.9 million, “Switched at Birth” at $7.4 million and both “Stitchers” and “Rizzoli & Isles” at $7.1 million.

Other TV series included “Hit the Floor” and “Recovery Road” while movies of the week included “Before You Say I Do,” “The Big Grab,” “Once Upon a Date” and “Sisters of the Groom.”

The 11 independent features on the list are splitting up a total of $10 million — “Between the Rain,” “Case Tape,” “Climate of Fear,” “Codename Antlers,” “Limbs,” “Minors in Possession,” “Nevermore,” “Ostrich Two,” “The Portland Condition,” “Rebirth” and “The Sentence.”

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