California lawmakers propose AB 1138 to strengthen film tax credit and protect jobs

In a pivotal meeting on April 22, 2025, the California Assembly Arts, Entertainment, Sports, and Tourism Committee discussed Assembly Bill 1138, aimed at revitalizing the state's film and television industry through an enhanced tax credit program. This initiative is seen as crucial for preserving jobs and maintaining California's status as a global entertainment leader.

Assemblymember Zabir, a co-sponsor of the bill, emphasized the importance of the film industry to California's economy and cultural identity. He highlighted that the tax credit is not merely a corporate incentive but a strategic investment in the workforce that supports the industry. The bill seeks to counteract the significant job losses experienced due to the COVID-19 pandemic, industry strikes, and competition from other states and countries that have adopted more attractive tax incentives.

The committee heard from various stakeholders, including representatives from labor unions, who underscored the urgency of the situation. With nearly half of unionized entertainment workers currently unemployed, the proposed changes to the tax credit program aim to create a more competitive environment that encourages production to remain in California. The bill proposes increasing the tax credit rate to 35% and expanding eligibility to include a broader range of productions, particularly those that generate union jobs.

Additionally, the bill includes provisions to significantly boost funding for independent productions, recognizing their vital role in the state's economy. The economic impact of the film industry is substantial, with every dollar spent on tax credits reportedly generating $24 in economic output. This multiplier effect underscores the potential benefits of the proposed changes, not only for the entertainment sector but also for local businesses and communities.

As the committee deliberates on AB 1138, the discussions reflect a broader concern about the future of California's entertainment industry. The proposed legislation is seen as a necessary step to ensure that the state remains competitive in attracting and retaining film and television productions, ultimately safeguarding jobs and supporting the livelihoods of countless workers and their families. The committee's next steps will be crucial in determining the fate of this significant industry and its workforce.