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California Production Tax Credit Boosts Below-the-Line Work by 12% in 2016

California’s below-the-line entertainment industry employees saw a 12% hike in hours worked in 2016, compared with 2014, the state’s film commission reported Monday.

The commission said the hike was due to the expansion of the state’s Film and Television Tax Credit Program, which is aimed at halting the erosion of California-based production to states with bigger incentives, such as Georgia and New York. The annual allocation was increased during the 2015-16 fiscal year from $100 million to $330 million, and applications are ranked on how many jobs they will produce, rather than being selected by lottery.

The report said the expanded Program 2.0 has attracted or retained 100 film and television projects generating an estimated $3.7 billion in direct in-state spending, including $1.4 billion in below-the-line wages.

“The encouraging short-term results we reported in last year’s annual report have evolved into sustained and very encouraging long-term results for Program 2.0,” said California Film Commission Executive Director Amy Lemisch. “The expanded tax credit program is working as intended and having a real impact.”

The commission administers the program. Lemisch told Variety that she was not surprised by results, based on data for below-the-line workers covered under the Motion Picture Industry Pension & Health Plans.

“We’re pleased to see these numbers because they’re actual evidence of what we’ve been hearing anecdotally,” she added. “We have been hearing that it’s become more of a challenge to get stages in California because they are operating at such high capacity. We’re seeing similar kinds of increases this year.”

The program expansion, enacted in 2014 by California lawmakers, covers five years and $1.65 billion in tax credits. The credit is set at 20%, but producers are eligible for an additional 5% “uplift” if they shoot outside the L.A. zone, commit to music scoring or music track recording in the state, or to do visual effects in California.

Lemisch said much of the increase was due to relocation of a growing number of established TV series to California from out-of-state, which reached 12 in June when NBC’s drama “Timeless” announced that it was shifting production for its second season from Vancouver to California. “Timeless” joined three other TV series (“Lucifer,” “Legion,” and “Mistresses”) to relocate from Canada to California under the commission’s Program 2.0.

The report also said that production outside the traditional Los Angeles 30-Mile Zone has been growing, reporting that  tax credit projects are on track thus far to spend $28 million across 10 counties outside Los Angeles County.

The commission announced in July that three big-budget films — “Captain Marvel,” “Island Plaza,” and “Midway” — have been selected to receive the California production tax credit for filming in the state as part of an allocation of nearly $68 million to eight independent and studio projects.

Captain Marvel” has been set for a conditional $20.8 million tax credit. Brie Larson stars in the superhero tentpole, which hits theaters on March 8, 2019. Disney’s “A Wrinkle in Time” received a tax credit last year under new rules that allow productions with budgets of $75 million-plus to be part of the program.

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