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California State Senate Leader Touts State’s Production Tax Credit

One of the California’s most powerful legislators has offered a strong endorsement of continued support for the state’s seven-year-old production tax credit program.

“The program has been an overwhelming success,” said Kevin de Leon, president pro tem of the California State Senate, in a speech on Thursday. “And we want California to remain the entertainment capital of the world.”

De Leon was the keynote speaker at the State of the Entertainment Industry Conference, sponsored by Variety and the Hollywood Chamber of Commerce, at the Loews Hotel.

The 2015-16 fiscal year marked a major expansion for the tax credit program, aimed at halting the erosion of California-based production to states with bigger incentives, such as Georgia and New York. The annual allocation rose from $100 million to $330 million, and applications are ranked on how many jobs they will produce, rather than being selected by lottery.

The program expansion, enacted in 2014 by California lawmakers, covers five years and $1.55 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.

De Leon did not indicate whether new legislation will be introduced when the California Legislature goes back into session in early January. But he noted that several states, including Florida and North Carolina, have dropped or reduced their incentive programs since California’s expansion.

“I don’t believe other states should be in the business of luring production out of California,” de Leon said. “We’ve made it clear that no one is going to out-compete California. Hollywood is here to stay and we have to keep the momentum going.”

De Leon pointed to statistics showing that since the program was expanded, the amount of hours worked by crews has increased by 12% and that the incentivized projects have led to $3.7 billion in direct spending in California.

The expansion of the program included a provision for big-budget studio movies to apply for the credit. Disney’s “Wrinkle in Time” was the first title to receive the allocation. The California Film Commission, which administers the program, selected “Call of the Wild” and Quentin Tarantino’s upcoming Charles Manson movie  as recipients of the state’s production tax credit on Nov. 20. They join other big-budget projects for California, including “Captain Marvel,” “Island Plaza,” “Midway,” “Ad Astra,” and “Bumblebee.”

Thursday’s event included state film commission executive director Amy Lemisch interviewing “Wrinkle in Time” producer James Whiteaker about the shoot. The producer noted it was the first time he’d worked in California on a feature film since “Flight Plan,” and said that shooting in the state — mostly in rural northern California — had a positive impact on the crew.

“You want people to feel good about where they are,” he added.

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