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Gov. Jerry Brown Signs California Production Tax Credit Extension

California Gov. Jerry Brown has signed an extension of California’s production tax credit program for five years beyond its 2020 expiration with $1.6 billion in credits.

The Entertainment Union Coalition, a coalition of California IATSE Council, Directors Guild of America, International Brotherhood of Teamsters Local 399, LiUNA Local 724, and SAG-AFTRA, made the announcement Wednesday. Brown approved the legislation as part of signing the state’s overall 2018-19 budget.

“As a coalition that represents working men and women of the entertainment industry, we are elated that the California film and television production tax credit program has been extended through 2025. Our members are those who lose when film and television production leaves this state and they are also the direct beneficiaries when it returns to and stays in California,” the group said.

The program, which allocates as much as 25% of the budget to credits, was more than tripled in size in 2014 to $330 million annually to compete effectively with incentives in New York and Georgia. The program is overseen by the California Film Commission, which selects the TV and movie projects to qualify partly based on the number of jobs created.

“In 2014, when we worked to enact the California Film and Television Tax Credit Program 2.0, we told the state legislature it would bring production back and reverse the dismal lack of work our members faced,” the coalition said. “Now, four years after the 2.0 program launched, more than 45,000 of our working California members have been re-employed or employed, with $2.3 billion in wages paid to below-the-line workers.”

Since the expansion, the program has helped to relocate a total of 13 series to California, including Amazon’s “Sneaky Pete,” FX’s “Legion,” and HBO’s “Ballers.” Feature films covered under the program include Disney’s upcoming “Captain Marvel” and Paramount’s “Transformers” spinoff “Bumblebee.” The commission announced April 9 that it had selected two relatively big-budget films — “Ford v. Ferrari” and “Coming 2 America” — as recipients of the production tax credit along with seven other projects for a total of $55 million in incentives.

“We thank Gov. Brown for his support in signing SB 871,” the coalition said. “We thank the bill’s authors, Majority Leader Ian Calderon and Senator Holly Mitchell, for standing steadfastly with us from the beginning and getting us to where we are today, and Senate Pro Tempore Atkins and Speaker Anthony Rendon for helping ensure this program was part of the 2018 California budget. As productions continue to shoot in California, our members now know they can earn a living and stay with their families — well into the future.”

The new tax credit program will be dubbed Program 3.0. It includes more tax credits for indie films (from 5% to 8% of overall funding); an additional 5% uplift to indies and non-indies that hire out-of-zone labor; a new pilot  program to train individuals from underserved communities to prep for jobs in the industry; a requirement for approved applicants to furnish their written policy against unlawful harassment; a requirement for applicants to report diversity of above-the-line workers.

The new rules also extend the date by which principal photography must begin from 180 days to 240 days for projects with budgets over $100 million in qualified spending.

Nancy Rae Stone, Tax Credit Program Director at the California Film Commission said, “The new five-year extension signed into law today provides assurance that California will remain competitive, which means more employment for in-state crew members and production spending here at home where it belongs. The Film Commission is prepared to implement the new tax credit provisions and looks forward to managing Program 3.0 as part of California’s ongoing fight against runaway production.”

Charles Rivkin, Chairman and CEO of the Motion Picture Association of America, said, “The MPAA and its member companies are grateful to the leadership of the California legislature for extending the state’s film and television production incentive program. We are especially grateful for the support of Senator Holly Mitchell and Assembly Majority Leader Ian Calderon, who authored key legislation and Governor Jerry Brown, for signing the bill into law. As the birthplace of American cinema, California has seen a fledgling industry grow into a global economic powerhouse that today supports the livelihoods of more than 715,000 Californians. The enactment of this bill helps ensure that California will be home to many more productions, jobs, and local businesses for years to come.”

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