Deal Struck for Film and Television Tax Credit

Governor Edmund G. Brown Jr., Assembly Speaker Toni Atkins, Senate President pro Tem-elect Kevin de León, Senate President pro Tem Darrell Steinberg, Assembly Republican Leader Connie Conway and Senate Republican Leader Bob Huff today announced a deal to expand, extend and improve California’s Film and Television Tax Credit Program.

“This law will make key improvements in our Film and Television Tax Credit Program and put thousands of Californians to work,” said Governor Brown.

Today’s agreement increases the tax credit to $330 million a year for five years beginning with fiscal year 2015-16 and replaces the currently flawed and arbitrary lottery system with a more competitive and accountable system.

“Today, we’re one step closer to premiering a statewide Film and TV Tax Credit that is smart and strategic – with a renewed laser-focus on creating good, new jobs for Californians. This is a crown-jewel industry that provides jobs and opportunity for middle-class families in every region of our Golden State. We’re sending a powerful signal today that we are 100-percent committed to keeping the cameras rolling and bright lights shining in our state for years to come,” said President pro Tem-elect de León.

“Not only does extending the Film Tax Credit keep cameras rolling in California, it will keep costumers designing, craft services catering, and carpenters hammering. It’s just common sense – when California hosts more production, we get more jobs and more revenue – two things our state can always use. I’d like to thank the co-stars of this effort, Assemblymembers Raul Bocanegra and Mike Gatto, President pro Tem-elect Kevin de Leon – and, of course, Governor Brown for ensuring the final scene is a good one,” said Assembly Speaker Atkins.

“In the last fifteen years, film production has dropped nearly 50 percent in California. In 2013, 21 of the 23 new prime time series were filmed outside of California. When that happens, it’s the ‘behind the scenes’ workers who take a hit, as well the ancillary businesses that serve the production sites and teams. If California is going to get these jobs back, we must compete with other states and nations who are clamoring for that big movie business. It’s one of the reasons why I am a co-author of AB 1839, and I want to thank the governor for his leadership to get a bill that keeps these jobs in California,” said Senate Republican Leader Huff, a co-author of the legislation.

“For too long, film and television productions have been leaving California for other states and countries. With California’s legacy as home to an entertainment industry that generates billions for our state’s economy, lawmakers must do everything we can to lure back these productions and the jobs associated with them. Assemblymember Wilk and lawmakers on both sides of the aisle have worked hard to reach agreement on this important legislation. I applaud its passage and our efforts to grow our economy and create and retain good-paying jobs,” said Assembly Republican Leader Conway.

The current film tax credit allows the California Film Commission to allocate up to $100 million of income tax credits a year to limited kinds of productions made in California. A lottery is used to award the credit. The new tax credit program eliminates the lottery system and applicants will instead be ranked according to net new jobs created and overall positive economic impacts for the entire state.

Congressman Adam Schiff responded to the news of the agreement.

“The announcement of a deal to expand California’s state film tax credit is a great victory in the fight to keep good middle-class jobs in our state and in the Los Angeles area. For too long, California’s status as the location of choice for movie and film production has been eroded by aggressive tax credits in other states, threatening both our state’s economy and our cultural history. Today, it’s clear that California’s leadership intends to fight back. I have no doubt that on a level playing field, we’ll be able to keep these productions and the skilled jobs they create here at home for decades to come.”

Last month, Rep. Schiff led a letter signed by 28 of his Congressional colleagues in support of reauthorizing and enhancing the tax credit to the state legislature.

The legislation, AB 1839, is authored by Assemblymembers Mike Gatto  and Raul J. Bocanegra.