Universal is developing “Purge 2” with Jason Blum following the surprise success of Ethan Hawke starrer “The Purge.”

Blumhouse Prods. is in line to receive a $2.25 million tax credit from the state of California. The producer’s “Purge 2” was one of 31 projects that received a conditional approval on June 3 for California’s Film and Television Tax Credit program.

If it’s cleared by the state, “Purge 2” will receive the credit covering up to 25% of the budget once production is completed and an audit has established that the production funds were spent in California. The sequel  would have to begin shooting by the end of the year and meet several other requirements if it’s to receive the credit.

The opening weekend of “The Purge,” directed by James DeMonaco with a budget of $3 million, dominated the U.S. box office with $34.1 million for Universal — far ahead of Uni’s third weekend of “Fast and Furious 6” in second and Fox’s launch of “The Internship.” Michael Bay, Brad Fuller and Andrew Form produced “The Purge” via Platinum Dunes and Blum produced with Blumhouse.

The California Film Commission staff is reviewing the documentation submitted and will make the official allocation notifications in early July. The application required supporting financial documentation evidencing at least 60% of the financing for the total production budget; budget in an industry standard budgeting format; shooting schedule with scene descriptions and synopsis of a screenplay, teleplay, or series.

Warner Bros.’ “Entourage” movie received the top allocation of the 14 films selected via lottery, followed by CLE City’s “Solid State” with $2.5 million and “Purge 2″ with $2.25 million.

A total of 380 applications were submitted on June 3 — 18% more than the previous year, even though California’s program is far smaller than other states with a 25% cap on the amount of credits, a total of $100 million in credits available annually and eligible features limited to those under $75 million.

Additionally, eligible projects must shoot at last 75% of production days or total production budget in California. Application must be submitted at least 30 days prior to commencement of principal photography; and once an application is approved, principal photography must begin within 180 days.