Incentive bill stays in limbo
Prod'n incentive bill stays in limbo
SepT 8, 2005
Hollywood lobbyists and Democratic lawmakers continued to press Wednesday for the last-minute approval of a California production incentive despite lingering concerns over the structure and size of the commitment.
The bill sponsored byAssembly Speaker Fabian Nunez, D-Los Angeles, was said to be five or six votes shy of the 27 needed to pass it out of the Senate and get it to Gov. Arnold Schwarzenegger, who remains a major proponent.
Intense lobbying continued into the night to convince both Republicans and Democrats that the measure was not, as critics have charged, "corporate welfare" for Hollywood.
With the current legislative session set to end today, Nunez said he had a fall-back plan: getting legislative leaders to agree to include the outlay in the 2006-07 budget.
"In either case, the thing gets resolved and California makes a real appeal to the Hollywood production industry that we are serious about recognizing their contributions to our economy," Nunez said as a day of frenzied lawmaking dragged into the night.
"There's been a lot of discussions with members in the Senate -- a lot of give and take," Nunez added. "I think we've done a good job of convincing people that this is not a giveaway, that it's about bringing more money into our coffers and protecting our middle-class workers."
For backers among Hollywood's union and production community, the day was fraught with anxiety and confusion. Rumors swirled early on that Schwarzenegger and Nunez had agreed to postpone the bill until next year's budget negotiations, beginning in January. Proponents who remained in Los Angeles were desperate for updates, which were so sparse that an afternoon conference call among coalition members was canceled at the last minute.
Part of the problem was the sheer amount of bills still pending as the deadline loomed for the current legislative session. Schwarzenegger also had to focus on the state's response to Hurricane Katrina and a bill to allow gay marriage, which he vetoed over the protests of varied interests and the Democratic assemblymembers who approved the day before.
Schwarzenegger, who is losing favor among the electorate according to a new nonpartisan poll released Wednesday, has not been outspoken in support of the production incentive. Still, backers say he was actively fighting for it behind the scenes Wednesday.
That gave proponents a glimmer of hope even as they braced themselves for a likely postponement.
"They say that where there's a will there's a way, and that you can get a bill through in a day," California Film Commission executive director Amy Lemisch said. "We've got great bipartisan support in the Assembly, but in the Senate we've not been able to express the urgency that we need this now."
The debate was being waged on such a fundamental level that the actual cost remained in question. Sponsors were said to be willing to reduce the proposed $100 million outlay to make it more palatable to opponents.
Democrats remained concerned over the state's $7 billion deficit and its impact on social programs. Some Republicans continued to question the refundable nature of the incentive, which would allow producers to cash out the credit once they have satisfied their tax obligations.
"If you look around, all of these other (state) programs are either refundable or transferable," Lemisch said. "We've tried to convey the fact that this is modeled after incentive programs that have proven to be successful over and over."
The proposal would establish a 10-year program to annually subsidize a 12% tax credit on wages and other production costs, worth as much as $3 million per production. Some TV shows could get as much as a 15% break, while qualified commercial production companies could get a 10% credit.
At least 75% of principal photography would have to be done in the state, and certain costs would not be covered, including rights acquisition, development, financing, distribution and residuals. Also, only the first $25,000 of wages for actors, writers, directors and other above-the-line talent could be applied to the credit.
The bill sponsored byAssembly Speaker Fabian Nunez, D-Los Angeles, was said to be five or six votes shy of the 27 needed to pass it out of the Senate and get it to Gov. Arnold Schwarzenegger, who remains a major proponent.
Intense lobbying continued into the night to convince both Republicans and Democrats that the measure was not, as critics have charged, "corporate welfare" for Hollywood.
With the current legislative session set to end today, Nunez said he had a fall-back plan: getting legislative leaders to agree to include the outlay in the 2006-07 budget.
"In either case, the thing gets resolved and California makes a real appeal to the Hollywood production industry that we are serious about recognizing their contributions to our economy," Nunez said as a day of frenzied lawmaking dragged into the night.
"There's been a lot of discussions with members in the Senate -- a lot of give and take," Nunez added. "I think we've done a good job of convincing people that this is not a giveaway, that it's about bringing more money into our coffers and protecting our middle-class workers."
For backers among Hollywood's union and production community, the day was fraught with anxiety and confusion. Rumors swirled early on that Schwarzenegger and Nunez had agreed to postpone the bill until next year's budget negotiations, beginning in January. Proponents who remained in Los Angeles were desperate for updates, which were so sparse that an afternoon conference call among coalition members was canceled at the last minute.
Part of the problem was the sheer amount of bills still pending as the deadline loomed for the current legislative session. Schwarzenegger also had to focus on the state's response to Hurricane Katrina and a bill to allow gay marriage, which he vetoed over the protests of varied interests and the Democratic assemblymembers who approved the day before.
Schwarzenegger, who is losing favor among the electorate according to a new nonpartisan poll released Wednesday, has not been outspoken in support of the production incentive. Still, backers say he was actively fighting for it behind the scenes Wednesday.
That gave proponents a glimmer of hope even as they braced themselves for a likely postponement.
"They say that where there's a will there's a way, and that you can get a bill through in a day," California Film Commission executive director Amy Lemisch said. "We've got great bipartisan support in the Assembly, but in the Senate we've not been able to express the urgency that we need this now."
The debate was being waged on such a fundamental level that the actual cost remained in question. Sponsors were said to be willing to reduce the proposed $100 million outlay to make it more palatable to opponents.
Democrats remained concerned over the state's $7 billion deficit and its impact on social programs. Some Republicans continued to question the refundable nature of the incentive, which would allow producers to cash out the credit once they have satisfied their tax obligations.
"If you look around, all of these other (state) programs are either refundable or transferable," Lemisch said. "We've tried to convey the fact that this is modeled after incentive programs that have proven to be successful over and over."
The proposal would establish a 10-year program to annually subsidize a 12% tax credit on wages and other production costs, worth as much as $3 million per production. Some TV shows could get as much as a 15% break, while qualified commercial production companies could get a 10% credit.
At least 75% of principal photography would have to be done in the state, and certain costs would not be covered, including rights acquisition, development, financing, distribution and residuals. Also, only the first $25,000 of wages for actors, writers, directors and other above-the-line talent could be applied to the credit.
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