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Wednesday, May 28, 2014

Massive Film and TV Tax Incentive goes to California House then Governor

State Assembly Passes New California Film & TV Tax Credit Bill On 62-0 Vote

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california-tax-credits3__120901092343__120929195413__131031165021__131112185634__140109040050__140219155328__140424175515__140501004243__140513170807It’s not yet the law of the state, but efforts to expand California’s $100 million Film and TV Tax Credit program  took a legislative leap forward today. In the midst of a bill-passing frenzy, the state Assembly voted overwhelmingly for legislation that hopes to halt production flooding out of the home of Hollywood. Introduced in late February, the multi-sponsored Film and Television Job Creation and Retention Act drew 62 yes votes from Assembly members with zero opposed.
Related: Where Hollywood’s Union Jobs Are Going: Call These States The Runaway 3
“As lawmaker who cares about a healthy middle class, do we do something or Screen Shot 2014-05-28 at 1.34.27 PM copydo nothing?” co-author Assembly Mike Gatto asked his colleagues about the decline in production jobs in the state as he presented the bill on the Legislature floor. He called the bill “larger, smarter and more sensible” than the current one. “Those jobs are not coming back unless we take off the gloves and fight for this industry,” Assemblyman Tim Donnelly said of the losses California has suffered in the past decade. The Republican governor hopeful had a bill expanding the current program himself before the Assembly earlier in the year. After a series of supporting speeches, Gatto along with his co-author, Assemblyman Raul Bocanegra (D-Pacoima), urged the rest of the Assembly to vote for their bill. Bocanegra noted that a dollar figure was not yet included with the Act because “we’ve been working for months to get the policy right first.”
Related: California Gov. Jerry Brown Still Mum On Film & TV Tax Credit Support

While that dollar figure is not expected to be added to the Act until the state budget is set in late June, industry sources have been saying for months that they hope to see the program increased to between $300 million and $400 million – which would put California close to New York’s $420 million incentives, the highest in the nation. In fact, some insiders have told me that they would consider rejecting the expansion if it were anything less that $300 million, which is what they believe the state needs to be truly competitive after years of the production battle to other territories.
Related: California Mayors Back Expansion Of State’s Film & TV Tax Credit Program
imgresWith an aim to keep the program going to at least 2022, the legislation proposes, among other measures, allowing movies with budgets over $75 million and network pilots to now be eligible for tax incentives in the Golden State. In an attempt to make bring Northern California politicians onboard with the new bill, it also includes proposes an additional 5% credit to productions that shoot outside Southern California. Currently the program is extend every two years since first being introduced back in 2009 to counter lucrative incentives from states like New York, Georgia and Louisiana as well as Canadian provinces and countries like the UK. The new legislation is a major shift from the current program, which doesn’t allow tent pole projects for instance to partake of state tax credits. Presently, successful projects are determined by lottery, as they will be again on June 2 the next deadline for applications for the tax credit. That doesn’t look to change under the new legislation.
Related: New Film & TV Tax Credit Bill Unanimously Passes First Hurdle
Known as AB 1839, the new bill was co-authored by Bocanergra and Gatto and had the bipartisan support of over 70 co-sponsors. After hearings earlier this year and support from studios, unions, local film commissions and more, the bill was unanimously passed by the Assembly’s Arts, Entertainment, Sports, Tourism, And Internet Media committee on March 25 and the Revenue and Taxation Committee, which Bocanegra chairs, on May 13. The Appropriations Committee, which Gatto chairs, passed the bill, on May 23. Gatto presented the bill on the Assembly floor today.
Related:
Analyst Throws Cold Water On California Film & TV Tax Credit Expansion
Official Dodges Governor’s Stance On Film & TV Tax Credit
Today’s vote now moves on to the state Senate where it will face a new round of hearings before a vote in that legislature later this summer. If the effort to expand California’s Film and TV tax incentives passes the Senate before August 31, the deadline for all legislation this session.The final bill will come back to the Assembly later in the summer and then it will go to Gov. Jerry Brown for him to sign. While Brown signed the last extension of the program back in 2012, the running for reelection Governor has not indicated either way if he supports an increase in the tax credit.

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