Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the Film Tax Credit topic
No spam. Unsubscribe anytime.
Senate committee advances bill to boost film and TV tax credits and expand eligibility
Summary
The California State Senate Committee on Tax, Revenue and Taxation voted 5-0 to pass AB 1138 to the Appropriations Committee. Sponsors say the bill raises credit rates, broadens eligible productions and adds workforce incentives to retain film and television jobs in California.
The California State Senate Committee on Tax, Revenue and Taxation on a unanimous 5-0 vote advanced Assembly Bill 1138, a proposal to raise and expand California's film and television tax credit program and add workforce incentives intended to bring production and jobs back to the state.
An assembly member (unnamed in the transcript) presented the bill alongside Senator Allen, who is a joint author, saying the measure modernizes the state's film tax credit program to make it more competitive with incentives offered by other states and countries. "California's iconic film and television production industry is in crisis," the presenter said, and AB 1138 is "a job spill pure and simple." The presenter credited the program since 2009 with creating more than 197,000 jobs and $26 billion in economic activity.
The bill would increase base tax credit rates, broaden the kinds of productions eligible, increase set-asides for independent productions, and add new workforce incentives. Specifically, sponsors described raising the base tax-credit rate inside the Los Angeles zone from 20% to 35% and from 25% to 40% for productions filming outside the Los Angeles zone. The proposal also would expand qualified productions to include 20-minute television shows, reboots, animation and certain large-scale competition shows; increase the independent production set-aside from $26 million to $75 million; and remove a 50% ownership and 10-year lease requirement for certified sound-stage access to the sound-stage tax credit program. The authors also said the California Film Commission would get flexibility to move underused allocations across categories.
The bill includes new workforce provisions. Sponsors described a career-pathway program that provides an uplift of up to 2% for productions that hire trainees from historically disadvantaged and underrepresented communities, limited to hiring one to four trainees "without displacing anticipated hiring of experienced workers." Sponsors and coalition witnesses said the changes are intended to prioritize job creation and middle-class work in the state's production economy.
Rebecca Ryan, appearing on behalf of the Entertainment Union Coalition, said the coalition represents about 165,000 members and that "Jobs have been and continue to be our North Star." Ryan and other witnesses said stakeholders spent months negotiating tradeoffs to direct limited dollars to measures most likely to retain production and workers.
Multiple industry groups and local officials testified in support: the Hollywood Chamber of Commerce and Los Angeles Area Chamber of Commerce, the Motion Picture Association, the California Production Coalition, the Walt Disney Company, NBCUniversal, Netflix, the San Diego Chamber of Commerce, the Latino Film Institute, the City and County of San Francisco (support if amended), Sony Pictures Entertainment, the Association of Independent Commercial Producers, independent production companies, labor groups including the State Association of Electrical Workers and Pipe Trades Council, and the Film Liaisons in California State (FILM in California). Sacramento's film commissioner also testified in support.
Committee members voiced broad support for the bill on economic-development grounds and the need to stop "runaway production" that moved projects and spending out of state. Senator Ashby moved the item. The committee clerk recorded aye votes from Senators McNerney, Ochoa Bogue, Allen, Ashby and Grayson; the motion was forwarded to the Appropriations Committee with a 5-0 vote.
Sponsors and witnesses said the package assumes increased funding reflected in separate budget/legislative actions, with references in the hearing to a proposed total allocation of $750 million in the governor's and legislature's proposals. Sponsors also said the authors merged a Senate and Assembly version of the bill and made limited technical and urgency changes at the request of the governor's office.
The committee record shows the bill passed the committee and will now move to the next fiscal-review stage in the legislature. The hearing concluded after the roll call and the committee adjourned.
