California Film and TV Tax Incentive Bill Passes State Assembly

"Entourage" -- one movie benefiting from the California tax incentives in 2014
"Entourage" -- one movie benefiting from the California tax incentives in 2014
 

Legislation to expand and extend incentives to keep film and television production in California passed a major milestone.

As expected, the California Film and Television Job Retention and Promotion Act of 2014 was approved by the state assembly Wednesday by a unanimous vote of 71-0.  

The legislation, authored by Assemblymen Mike Gatto (D-Los Angeles) and Raul Bocanegra (D-Pacoima) had more than 60 co-authors.

However, there is still no specific amount of money the state will put up for the new legislation, which would replace the current program that allocates $100 million a year, which has not proven to be enough to stem the flow of production to other states and countries that offer even greater incentives.

A source in Sacramento said that the amount will be determined in coming weeks after the budget priorities become clearer. Advocates are hoping to see the amount authorized increased by two to four times, but that may be too ambitious. There was a legislative analyst report that said the program doesn’t return as much in tax dollars as backers claim, but Gatto has said that did not consider the local tax revenue or the jobs that are created.

“We can’t sit by and watch a $17 billion dollar a year sector of our economy leave California,” said Bocanegra. “This expanded and improved program will go a long way toward making California more competitive with other states' programs.”

Between 2004 and 2012, California lost more than 16,000 film- and television-industry jobs, according to the U.S. Department of Labor, resulting in more than $1.5 billion in lost wages and economic activity.

“I remember when our communities lost all the good aerospace jobs,” said Gatto.  “Losing major employers really harms local families and our state economy. This effort is a rare example of government taking proactive steps to ensure well-paying jobs stay in our communities.”

The bill next goes to the state senate where it already has more than a dozen co-sponsors, but also faces a much more skeptical look at the value of the program. Some senators, especially those from northern California, question whether too much of the benefit goes to the Los Angeles area. To try and respond to that complaint, this bill for the first time includes an additional 5 percent incentive for productions outside the L.A. area.

The proposed bill also, for the first time, makes big-budget movies, network TV shows and music for movies and TV eligible for financial incentives.

On June 1, the California Film Commission will take applications for the next year’s incentives. Those will all be used up by the end of the day, although some will go on a waiting list in case the movie and TV shows chosen in a lottery do not get made.

If the bill makes it through the senate, then it will go to Gov. Jerry Brown, who has not taken any public position as of yet on whether or not he will sign it into law. However, Brown has held discussions on the bill recently, and in the past has signed other tax incentive bills enacted since the program began in 2009.

The California Film and Television Production Alliance -- a coalition of guilds, unions, producers, small businesses and associations that have worked toward passage of this bill -- said in a statement: “The strength of the unanimous vote demonstrates the Assembly Members’ clear understanding of the vital economic importance of the motion picture industry to California and their determination to return this state to a competitive position. This could not have been achieved without the dedication of AB 1839’s authors, and the unwavering support of 67 co-authors. Our industry has been a vital part of California’s heritage and we want to continue to be part of the Golden State’s economic vitality in the 21st century.  This vote puts us one step closer to that reality.”

"This unanimous vote of support from the Assembly provides strong momentum as we look ahead to the Senate and the Governor's desk," said Los Angeles Mayor Eric Garcetti. "California needs jobs, and this legislation would generate thousands of middle class jobs across our state."

 

 
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