A committee of the Georgia State Senate voted on Monday to cap the state’s lucrative film and TV tax credit at $900 million per year.

The tax credit has made Georgia a major hub of film and TV production over the last decade. Last year, the credit soared to a record $1.2 billion as production exploded in the state following the pandemic.

The program is currently uncapped, meaning that all productions that spend at least $500,000 in the state in a year are guaranteed a 30% credit on their expenses. The credits are also transferable, meaning that studios can sell them at close to face value to other taxpayers.

The Senate Finance Committee proposal would cap the program and make credits non-transferable. If the latter provision became law, studios could only take advantage of the credit to the extent that they have tax liability in the state, significantly reducing the credit’s value as a production incentive.

The proposal faces an uncertain future and will be subject to negotiation with the state House of Representatives.

“We obviously know this is going to go back and forth in the House and the Senate,” said Sen. Chuck Hufstetler, the Republican chair of the committee, at Monday’s hearing.

The Georgia General Assembly is currently working on a broad income tax reform measure. The House passed a flat tax of 5.25%, replacing the current graduated tax which has a top rate of 5.75%. The House version would also eliminate many deductions, meaning that taxpayers who itemize deductions could end up paying more.

The Senate Finance Committee proposed an alternative, under which deductions would be retained, and the rate would drop to 4.99% over the course of several years. To offset the added cost of that proposal, the committee proposed reining in the film and TV credit.

Even at $900 million, the Georgia credit would still be larger than the credits in New York and California combined. And even in Georgia, the credit has only exceeded $900 million once. Before 2021, the previous record high was $860 million in 2019.

Sen. Nan Orrock, D-Atlanta, voted against the committee’s proposal, noting the job impact of the credit in the state.

“I feel very cautionary about our whacking this tax credit that’s made us the third highest state in the country for film activity — $4 billion in our economy every year,” Orrock said. “It just seems incautious to me.”

Hufstetler countered that the credit “needs limitations,” noting that the state ends up subsidizing “private jets, personal trainers and chefs.”

The Motion Picture Association declined to comment.

Update, Wednesday: David Ralston, the speaker of the George House of Representatives, affirmed his support for the film tax credit at a press conference on Wednesday afternoon.

“I’m not prepared to run that industry out of Georgia,” Ralston said. “I think the industry is good for the state, puts a lot of people to work. It provides opportunities for many, particularly younger Georgians, to pursue their interest in the film industry here without moving to New York or California. So the last time I checked, that bill will have to come through the House.”

The Senate Finance Committee version of the bill was initially scheduled for a Senate floor vote on Wednesday, but was pulled from the calendar. The bill is expected to come back for a vote on either Friday or Monday.

CBS 46, based in Atlanta, reported on Wednesday that the film industry has pushed back on the proposed cap, and that the provision was expected to be revised or eliminated in committee before the bill comes back to the floor.

The deadline to pass legislation is Monday night. If the two houses pass conflicting versions of the bill, it would go to a conference committee, which would seek to reconcile the differences.