Calif. Senate Approves Sweetened Tax Credits For Hollywood Studios

Friday, 29 Aug 2014 07:50 PM


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The California State Senate has approved legislation on a 32-2 vote to extend and expand California's movie and TV tax credit, more than tripling its current size to $330 million annually over five years.

The vote came on Friday afternoon, two days after legislative leaders and Gov. Jerry Brown announced that they had reached a deal on the legislation.

The $330 million annual outlay would be less than the $400 million-per-year outlay sought by the bill's principal co-authors, Assemblyman Raul Bocanegra and Assemblyman Mike Gatto. Still, the program will see a significant improvement from the $100 million per year currently awarded in California tax credits.

A coalition of unions, the Motion Picture Assocation of America and notable actors such as Halle Berry, Danny Glover, Ron Perlman and Daniel Stern have spoken out in favor of the legislations, Assembly Bill 1839.

"This expansion of the Film and TV Tax Credit is a huge victory for Californians," said Halle Berry. "Our industry produces so many great jobs for Californians--especially the people behind the scenes who make the magic happen--the make-up artists, grips, caterers, dry cleaners, accountants, special effects-you name it. We must do everything possible to keep these creative people fueling our economy."

The legislation will take effect in fiscal year 2015-16. The bill now heads to the Assembly and to Brown's desk for signing.

Sen. Lois Wolk, head of the Senate Governance and Finance Committee, told the Senate that she opposed the bill on grounds of the lost opportunities for the $1.65 billion in general fund spending. "I love movies but I think are better uses," she said.

The backers of the bill marshalled union members to support the campaign, holding rallies this year in Burbank, Sunland, San Francisco and Sacramento. Senate President pro Tempore-elect Kevin de Leon (D-Los Angeles) -- who played a key role in hammering out a deal with Brown and Republicans -- alluded to that support on the Senate floor.

"The behind-the camera workers' voices are rarely heard, but we heard them loud and clear," he said. "AB 1839 was written for them. Bolstering middle-class jobs is of paramount importance for California's economy."

The legislation would expand the types of projects that are eligible for the credit, including most one-hour drama series and big-budget feature films. The California Film Commission currently awards credits via a lottery, which will be replaced by a new system in which applicants will be scored based on the number of jobs that they will create.

"This is not $330 million dollars out the door," De Leon said. "It's credited after the jobs have been created and verified. It's money spent only after the production is complete and our local economies have been bolstered."

© 2014 Thomson/Reuters. All rights reserved.

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