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California Film Tax Credits Go to ‘Conjuring 2,’ ‘Chicken Soup for the Soul’

The California Film Commission has selected eight studio films and three independent projects to receive $55 million in tax credits under its expanded program.

New Line’s “Conjuring 2” — a sequel to its surprise 2013 horror hit — is among the studio projects selected along with Warner Bros.’ CHIPs comedy starring Dax Shepherd, Paramount’s “Action Park” and “The God Particle,” Fox’s “Avon Man” and “Why Him,” and Disney’s “Overnight” and “Whale.”

The three independent features selected are Alcon’s “Chicken Soup for the Soul,” “Code Name Veil” and Rancho Rosa’s film version of David Lynch’s “Twin Peaks.”

The Disney projects received the top two allocations, which won’t be doled out until after production is completed, with “Overnight” set to receive $11.6 million while “Whale” will get $6.8 million. “Conjuring 2” is set for $5.6 million, followed by “Why Him” at $5.4 million, “CHIPS” at $5.1 million, “Avon Man” at $4.9 million, “Action Park” at $4.6 million and “The God Particle” at $3.9 million. “Twin Peaks” and “Chicken Soup” are each set for $2.5 million and “Code Name Veil” will receive $1.9 million.

The tax credit of up to 25% is aimed at keeping the industry in California despite more lucrative government incentives elsewhere. The commission noted that “Conjuring 2” is partially set in the U.K. and “Why Him” is set in Michigan.

“We’re fighting back and winning thanks to our newly expanded tax credit program,” said California Film Commission executive director Amy Lemisch. “We were losing projects that were set here at home, and now we’re back to doubling for other locales. This demonstrates that when the playing field is more level, the industry views California as the first and best option.”

Alcon co-CEOs  Andrew Kosove and Broderick Johnson said: “We are excited to be coming back to California to film ‘Chicken Soup for the Soul.’ We’re looking forward to working with the greatest crews and top facilities, as well as the convenience of managing this project close to home.”

The list announced includes five projects that will shoot in-state outside the Los Angeles 30-Mile Zone for a combined 77 days. Lemisch noted, “This is an early indicator that the new program’s added incentives for filming outside the zone are working and achieving the intended result.”

The commission said that the 11 approved projects will generate an estimated $533 million in direct in-state spending, including $171 million in wages for below-the-line crew members.

The projects were selected by the commission from 254 movie projects, which applied for $55.2 million in tax credits under the state’s recently expanded program — underlining the strong interest in keeping production in the Golden State.

The commission received 32 applications for studio films from $48.3 million in funds and another 222 applications for $6.9 million in funds for independent projects. The application period lasted from July 13 to July 25.

California’s 6-year-old incentive program has been expanded from $100 million in tax credits annually to $330 million — and feature film projects with budgets of more than $75 million are now eligible. Eight features received credits last year: Clint Eastwood’s “Jersey Boys” and “American Sniper,” “Horrible Bosses 2,” Mark Wahlberg’s “The Gambler,” “Earth to Echo,” “The Purge: Anarchy,” “Paranormal Activity: The Marked Ones” and “Ouija” with $7.9 million.

In early June, the commission announced that “Veep,” “American Horror Story,” “Secrets and Lies” and “Hindsight” had been approved to receive $27 million in tax credits for relocating to California, with six other new series — “Code Black,” “Crazy Ex Girlfriend,” “Rosewood,” “Heart Breakers,” “Utopia” and “Westworld” — and the pilot for “Snowfall” receiving a total of $55 million in credits.

The new program also provides that the selection for tax credits be based on each project’s “jobs ratio score,” which provides a ranking according to wages paid to below-the-line workers and qualified spending for vendor payments/equipment.

The California Film and Television Production Alliance, a lobbying group of unions and trade organizations, issued a statement in support of the program:

“Last year at this time we were in the final push for passage of AB 1839, the California Film and Television Job Retention and Promotion Act. Today, thanks to Governor Jerry Brown, Senate President Pro Tem Kevin de León, Speaker Toni Atkins, and our authors Assemblymembers Mike Gatto and Raul Bocanegra, we see the reality of that legislation for which we fought so long and hard. Then, we faced the ever-growing cascade of film and television production exiting California; feature film production in California was practically non-existent. Now, we have 11 feature films, both studio and independent, shooting in multiple locations throughout California. Those films will bring $533 million in direct spending back to the California economy—money that would have fled the state otherwise. And most importantly, it will generate $171 million in below-the-line wages. These are not just numbers on paper, they are real working men and women who are now back home working in California.”

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