California Movie/TV Incentives: Bill Likely to Pass But Not at $400 Million

California Film Tax Credit Rally Sacramento - P 2014
AP Images/Invision

California Film Tax Credit Rally Sacramento - P 2014

Last-minute negotiations between legislators and Gov. Jerry Brown likely to lead to an amount above the current $100 million in tax credits

The clock is ticking, but there is no final deal yet in Sacramento on the bill to expand California’s movie and TV financial incentives. However, as behind-the-scenes negotiations between the bill’s backers and Gov. Jerry Brown continue, some things are coming into focus.

The $400 million allocated in the bill that passed the state Senate is not going to hold, but otherwise the legislation as amended is acceptable to all sides, according to an informed source who spoke Tuesday on background.

As the final days of the legislative session tick down, the wrangling now is over “the number,” how much the state will allocate. It is almost certain the $1.6 billion over four years won’t be the final number; but it is also highly likely there will be a compromise amount above the current $100 million annual allocation.

Both sides hope to have the “the number” wrapped up by Friday; but the final re-votes, which will be necessary by both the state Assembly and Senate (because amendments were added), can take place as late as Aug. 31.

Because the governor and leaders in both chambers have agreed on the content of the bill, there will be no need for a conference committee to work out differences between the legislation passed by the Assembly and the Senate. 

Once signed, the governor will have until the end of September to sign it into law or veto. The point of making a deal this week is to ensure the governor will make it into a law that will kick in with the 2015-16 fiscal year (which starts in June 2015).

Unlike past bills, it also appears to have bipartisan support, and there is no opposition from northern California politicians, who feel it is just going to help the industry in Southern California. That is because it includes a 5 percent bonus for projects made outside L.A.

The bill has attracted a load of co-sponsors in the Assembly and in the Senate. Among them are two Democratic state senators, Kevin de Leon, who this fall becomes president pro tempore of the Senate; and Ted Lieu, who is in a runoff this November for the 33rd congressional district seat (to replace Rep. Henry Waxman).

The big issue as the bill has moved forward is Brown’s insistence on keeping a close eye on how much the state spends and his concerns about next year’s budget. The governor is also in a re-election campaign and is widely expected to win another term.

The bill, known as AB 1839 and authored by Assemblyman Mike Gatto (D-Los Angeles) and Assemblyman Raul Bocanegra (D-Pacoima), has been in the works for months and has attracted strong support from show business guilds, unions, associations (including the MPAA), studios and small businesses.

Mayor Eric Garcetti of Los Angeles and Mayor Ed Lee of San Francisco have both been strong supporters, as have the mayors of San Jose, Oakland, Fresno, San Diego, Bakersfield, Long Beach, Santa Ana and Sacramento.

The bill would make significant changes in the current system designed to attract productions and stem runaway production. It would also do away with the annual lottery to decide who gets tax incentives and instead put the emphasis on supporting productions that provide the most jobs.