Assemblymember Felipe Fuentes has introduced legislation– Assembly Bill 2026 — to extend California’s Film and Television Tax Credit Program by an additional five years and another $500 million.
“By creating tens of thousands of jobs and pumping billions into our economy, the film and television tax credit program has truly been a statewide economic stimulus package,” Fuentes said. “With the state’s unemployment rate hovering around 12%, we need to extend this targeted incentive to help keep Californians employed. Extending this program will prevent production companies from moving their projects, jobs and spending out of California.”
AB 2026 has 18 co-authors including four principal co-authors — Assemblymembers Betsy Butler, Nora Campos and Mike Gatto and Senator Fran Pavley.
“This bill is imperative to the economic vitality of our state,” Butler said. “The film industry represents a vibrant segment of our economy and should be afforded the same opportunities in California as members of the industry can receive in other states.”
Fuentes carried last year’s legislation, which extended the program for a single year after the original bill provided for five years. “We need to get more years to telegraph stability to the industry,” Fuentes (D-Sylmar) said in a roundtable discussion on Jan. 26.
Showbiz producers and unions have been strong supporters of California’s 4-year-old Film and Television Tax Credit Program, which has doled out $400 million in tax credits to date.
The program was extended for a year in October when Gov. Jerry Brown signed Assembly Bill 1069 on the final day for the governor to approve or veto bills from last year’s legislative session. The state Senate had voted Sept. 9 to extend the program for a single year rather than the five years its backers had sought.
A study issued last year by the Los Angeles Economic Development Corp. showed that in its first two years, the program has generated $3.8 billion in economic activity statewide, created more than 20,000 jobs and more than $200 million in tax revenues. Opponents of the program contend that the tax credits benefit studios and other well-heeled production companies, and some have questioned the accuracy of the projections of economic benefits.
The number of applications submitted last year on the first day of the application period more than doubled to 176.
California’s program, which offers a maximum rebate of 25%, is far smaller than those of other states. The state of New York announced in August that a record 23 series were lensing in the state on the heels of the legislature’s five-year renewal of its film incentive tax program, which offers a 30% refundable state tax credit, capped at $420 million per year. New York City offers an additional 5% refundable credit, capped annually at $30 million.
A UCLA/Headway Project study released on Feb. 6 advocated the expansion of the program to maintain the state’s position as a production center and avoid seeing shooting move elsewhere. “The uncertainty created by the limited size of California’s tax credit program, which is able to provide credits by lottery to only one in every five applicants, causes many film and TV producers to pursue credits from other states,” the study authors said.