California Film Credit Expansion Hits Snag as Dollar Figure Removed
California Film and TV Tax Credit Expansion Faces Setback
The California film and TV tax credit expansion, a crucial initiative to protect jobs in the state, encountered a hurdle on Friday as lawmakers removed references to raising the program cap to $750 million from the bill language.
Governor Gavin Newsom had previously pledged to increase the program’s budget from $330 million to $750 million. Two bills, AB 1138 and SB 630, were in progress to implement this increase and other modifications aimed at making the program more appealing to producers.
While the bills passed through the appropriations committees in the Assembly and Senate on Friday, the mention of $750 million was omitted. The possibility of reintroducing this figure later in the budget negotiations remains uncertain.
Senator Ben Allen, the author of the Senate bill, expressed disappointment at this development and emphasized the need to revamp the program to retain California’s position as a global entertainment hub.
Despite the removal of the dollar figure, industry advocates remain optimistic about the expansion’s approval. Assemblyman Rick Chavez Zbur, the author of the Assembly version, highlighted the widespread support for the increase in both legislative houses.
The modifications were made as part of the voting process on numerous bills, requiring passage from the “suspense file” to proceed to the floor for further consideration.
Governor Newsom reiterated his backing for the $750 million expansion just last week following the submission of a revised budget proposal to the Legislature.
The Legislature is mandated to approve a budget by June 15, with potential funding adjustments addressed through supplementary trailer bills at a later date.
Representatives from various entertainment unions have been actively advocating for the expansion at hearings in Sacramento, underscoring the necessity for California to enhance its incentive programs to compete with other states and countries.
Proposed changes to the legislation include raising the tax credit from 20% to 35% of qualified expenses, with a further increase to 40% for productions outside Los Angeles or in economically distressed areas.
The expansion would encompass animated films, TV shows, sitcoms, and large-scale competition programs, with potential eligibility for music scoring through forthcoming amendments.
