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California Tax Incentive Bill Clears Final Hurdle

August 28, 2014 07:51 | By

Assemblymembers Raul Bocanegra and Mike Gatto introduce AB 1839 - The Expanded Film & TV Job Creation Act.

Assemblymembers Raul Bocanegra and Mike Gatto introduced AB 1839 in February.

California Governor Jerry Brown has reached a deal with state Assembly and Senate leaders to pass AB 1839 – the California Film and Television Job Retention and Promotion Act, which will greatly expand and extend California’s Film and Television Tax Credit Program.

The agreement increases the tax credit to $330 million a year for five years beginning with fiscal year 2015-16 and replaces the current lottery system with a more competitive and accountable system. The bill had originally been pegged at $400 million per year, but the Governor negotiated the $330 million figure with Assembly Speaker Toni Atkins, Senate President pro Tem-elect Kevin de León, Senate President pro Tem Darrell Steinberg, Assembly Republican Leader Connie Conway and Senate Republican Leader Bob Huff.

“This law will make key improvements in our Film and Television Tax Credit Program and put thousands of Californians to work,” said Governor Brown.

“Today, we’re one step closer to premiering a statewide Film and TV Tax Credit that is smart and strategic – with a renewed laser-focus on creating good, new jobs for Californians. This is a crown-jewel industry that provides jobs and opportunity for middle-class families in every region of our Golden State. We’re sending a powerful signal today that we are 100-percent committed to keeping the cameras rolling and bright lights shining in our state for years to come,” said de León.

“Not only does extending the Film Tax Credit keep cameras rolling in California, it will keep costumers designing, craft services catering, and carpenters hammering. It’s just common sense – when California hosts more production, we get more jobs and more revenue – two things our state can always use,” said Atkins.

The bill was authored by Assemblymembers Mike Gatto (D-Los Angeles) and Raul Bocanegra (D-Los Angeles).

The current film tax credit allows the California Film Commission to allocate up to $100 million of income tax credits a year to limited kinds of productions made in California. A lottery is used to award the credit. The new tax credit program eliminates the lottery system and applicants will instead be ranked according to net new jobs created and overall positive economic impacts for the entire state.

Industry groups lauded the deal, including the California Film & Television Production Alliance – a coalition of guilds, unions, producers, small businesses, studios and associations – which released a statement, saying: “This is a win both for the State of California and the working men and women across this state who will no longer have only one choice – to leave their families to feed their families. Behind the glitter that most people associate with Hollywood is the glue that holds it together – the many talented and often unheralded men and women whose names fly by in the credits. Their voices are rarely heard but they are today: AB 1839 is for them.”

Directors Guild of America president Paris Barclay said, “The DGA has worked tirelessly, together with many other guilds, unions, and others in the entertainment community, on behalf of our members to ensure that California remains a viable place to make the films and television shows that provide good jobs for thousands of men and women each year while entertaining and inspiring millions around the world. We thank Assemblymembers Bocanegra and Gatto for leading the charge throughout the past year, and Senate President pro Tem-elect Kevin de Leon for ensuring that the bill is grounded in job creation, and we look forward to working with them, the legislative leaders, and Governor Brown over the coming days on passage of AB 1839.”

“In the last 15 years, film production has dropped nearly 50 percent in California. In 2013, 21 of the 23 new prime time series were filmed outside of California. When that happens, it’s the behind-the-scenes workers who take a hit, as well the ancillary businesses that serve the production sites and teams,” said Senate Republican Leader Huff, a co-author of the legislation. “If California is going to get these jobs back, we must compete with other states and nations who are clamoring for that big movie business.”