A bill to expand California's film and TV tax credit program on Thursday passed the Senate Appropriations Committee.
The bill is aimed at helping the state compete against rising competition from other states and countries that offer more attractive discounts and tax incentives, leading to what has often been referred to as "runaway production."
Assembly Bill 1839 passed with amendments to help ensure the program's objective of job creation and retention, according to the office of Sen. Kevin de León (D-Los Angeles).
"To halt that steady outward march of jobs and creativity, California must have a robust, smart, and efficient tax incentive program of our own--a tax incentive program that guarantees job growth and economic expansion, coupled with strong accountability and transparency measures," de León said in a statement.
The bill's amendments include:
- increasing the current credit to $400 million a year for four years
- replacing the lottery system with something more competitive
- ranking applicants according to new net jobs and overall economic impacts to the state
That amount — $400 million — is four times what California currently allocates to the tax incentive program, which gives tax credits to certain film and television productions that agree to stay in-state. Supporters of expanding the program were hoping for at least $400 million, since New York state offers a little more than and has succeeded in luring many productions away.
The California Film Commission has used a lottery system to determine which projects get the credit because there are usually more productions applying for it than the funding can support. This year, 26 projects were selected to receive the credit out of 497 applications.
The main sponsors of the bills to expand the program were Los Angeles-area assemblymen Mike Gatto (D) and Raul Bocanegra (D).
“I’m a tax incentive skeptic,” Gatto told KPCC’s Steve Julian. “I’ve been up here four years and I’ve voted against them, but this one is different.”
The bill’s expected to pass the full Senate easily, then must be signed into law by Gov. Jerry Brown.
This story has been updated.