California’s Senate Appropriations Committee yesterday unanimously approved a bill to expand the State’s tax incentive program to $400 million per year from its current $100 million cap. The bill, the California Film and Television Job Retention and Promotion Act of 2014 (AB 1839), will now head to the Senate floor for a vote, and if successful, land on Governor Jerry Brown’s desk for final approval.
“I’ve heard from so many people over the past year, who have told me about their family being torn apart because production left the state,” said Assemblyman Mike Gatto, who co-authored the bill with Assemblyman Raul Bocanegra. “This proactive effort ensures well-paying jobs stay in California and families remain together.”
With $400 million in funding, the bill would make California competitive with states like New York, Louisiana and Georgia as well as foreign locations like Canada and the U.K. where production has been growing rapidly in recent years, at the expense of California.
But the clock is ticking. The current legislative session ends on Aug. 31, and if it passes the Senate, the bill will still have to be reconciled with the Assembly version before going to the Governor. Brown has been non-committal about the legislation, but the $400 million price tag has been bantered around in recent months, so it shouldn’t come as a shock.
In addition to extending the existing program for four years, the bill would allow movies with budgets over $75 million and new TV network dramas to qualify for the credits.
The Senate version of the bill includes an amendment that would scrap the current lottery system in favor of a competitive process where applicants will be ranked according to net new jobs created and overall positive and sustained economic impacts for the entire State.
“One of California’s most important and iconic industries has been the film and television industry. Hollywood is synonymous with that industry, but in the past decade that industry has been cannibalized by other states and countries that have poached tens of thousands of California jobs with lucrative financial incentives,” said Senate Appropriations Committee chair and President pro Tempore-elect Kevin de León (D-Los Angeles). “To halt that steady outward march of jobs and creativity, California must have a robust, smart, and efficient tax incentive program of our own – a tax incentive program that guarantees job growth and economic expansion, coupled with strong accountability and transparency measures.”
