In a bid to become more competitive with other countries (i.e., Britain, Canada) and states (including New York, Louisiana and Michigan) which offer far greater tax subsidies and incentives to attract production, California has made a major stride to quadruple funding for its own film and TV tax credit. Assembly Bill 1839, which would boost the Golden State’s tax credit from $100 million to $400 million a year, gained approval by a unanimous 5-to-0 vote today in the state Senate Appropriations Committee.
Next the amended AB 1839 will be up for a full vote by the state Assembly where its predecessor version got an overwhelming thumbs-up. If the Assembly again approves the measure, it would then go back to the Senate for a full vote. Should the measure pass the Senate, it would only need Gov. Jerry Brown’s signature to take effect. While prospects for Assembly and Senate approval look promising, it’s unclear whether Brown will greenlight the significant increase in funding.
The bill, if passed, would also broaden eligibility for the tax credit program to include larger movies (those with budgets of more than $75 million) and all new TV series. Furthermore, the amended measure would eliminate the current lottery system where it was a game of chance as to which qualifying projects would actually benefit from the California tax credit. Under the revised tax credit, a system would be instituted that would award credits based on overall economic impact, including how many jobs a particular feature film or TV project wold generate.
If the expanded tax credit comes to fruition, it would begin in fiscal year 2015-’16 and run through FY 2021-’22.
Upon the unanimous passage of the newly revised AB 1839 by the Senate Appropriations Committee, that body’s chair and president pro Tempore-elect Kevin de León (D-Los Angeles) released the following statement: “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. 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.”
