Legislation to Boost California TV and Movie Tax Credits Advances

Legislation to expand California’s film and TV tax incentives has cleared its first hurdle in the State Senate, a month after the Assembly approved the bill unanimously.

The Senate Governance and Finance Committee approved Assembly Bill 1839 on a 4-0 vote Wednesday — but with chair Lois Wolk abstaining after expressing reservations that there’s still no dollar figure for how much in tax credits will be allocated.

“This is a blank check and I don’t like blank checks,” she said.

Wolk said she opposed provisions in AB 1839 that provide for transferability of the credits. Assemblyman Mike Gatto, co-author of the bill, told Wolk that those issues will be addressed soon.

Gatto told the committee that the bill will persuade producers from moving projects to other states and countries, where incentives are currently more generous — and help preserve middle-class jobs and retain the state’s production infrastructure.

“When the infrastructure is gone, it’s gone,” he added.

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Los Angeles Mayor Eric Garcetti has called for an amount that is competitive with New York, which gives out about $420 million annually.

The proposed expansion of the program — which currently allocates $100 million annually — would take effect on July 1, 2016, and cover five years. The legislation would expand the program by making big-budget movies and most TV series eligible for the credit, along with credits for such post-production activities as visual effects and music scoring. The bill will next go to the Senate Appropriations committee.

Zach Keyworth, a manager at San Francisco-based rental house DTC Grip, told the committee noted that the runaway phenomena has become so pervasive that two movies set in San Francisco — “Godzilla” and “Dawn of the Planet of the Apes” — had filmed a respective five days and two days in the city and shot the rest of their films in incentive-rich locales in Vancouver and Louisiana, respectively.

The vote came a day after a report was issued from the FilmL.A. organization showing that Los Angeles has lost its leadership in one-hour drama pilot production for the first time with the 2013-14 development cycle seeing New York retain 24 drama projects — a convincing lead over the 19 drama projects retained in Los Angeles.

Among those appearing at the hearing in support of the legislation were FilmL.A. president Paul Audley, IATSE Local 80 business agent Thom Davis, Directors Guild of America exec Kathy Garmezy and Teamsters Local 399 secretary-treasurer Steve Dayan — who’s also president of the California Film Commission.

“I remember when our communities lost all the good aerospace jobs,” said Gatto.  “Losing major employers really harms local families and our state economy.  This effort is a rare example of government taking proactive steps to ensure well-paying jobs stay in our communities.”

Gatto told the committe that since its creation in 2009, the California Film and Television Job Retention and Promotion Act has prevented as many as 51,000 jobs from leaving the state and helped generate $4.5 billion in economic activity.

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