As was widely expected, today the bid to expand California’s current $100 million Film and TV Tax Credit program passed its second legislative test in Sacramento. The state Assembly Revenue and Taxation Committee unanimously 8-0 moved the multi-sponsored Film and Television Job Creation and Retention Act forward. The support comes as no surprise as the Committee is chaired by proposed legislation’s joint author Raul Bocanegra (D-Pacoima). AB 1839 now heads to the Appropriations Committee, which is chaired by its other joint author Assemblymen Mike Gatto (D-Los Angeles).
“At least 37 other states and jurisdictions have introduce incentive programs to take the entertainment industry out of our own state of California,” said Gatto in testimony to the Taxation Committee today. “I hope that Bill ADF 1839 will combat the national and international competition for production,” he added. “My joint author and I set out at the beginning to make the Film tax credit not only larger and more sensible but also something that I think we could be very proud of and that which tried to solve a lot of the issues that both the state and the current tax credit are facing.”
Though no dollar figure was or is yet attached, Bocanegra and Gatto introduced the Act on February 19. The Act proposes allowing movies with budgets over $75 million and network pilots to now be eligible for state tax incentives, among other measures. It also plans to set the program on a more stable five-year footing as opposed to the current every 2-year extension. “We do plan on including visual effects in the final version of the bill,” added Gatto also of what he called the “soup to nuts bill.” The Assemblyman said he wanted to address issues of post-production as well as urge Congress to pass measures to halt the supposed “unfair business practices” of Canadian provinces in attracting Hollywood production.
While the proposed legislation unanimously passed the Assembly’s Arts, Entertainment, Sports, Tourism, And Internet Media committee on March 25, it also faced analytical pushback in a report last month from state’s Legislative Analyst Office. While Gov. Jerry Brown won’t state his support of lack there of for the program, today LA Mayor Eric Garcetti and the mayors of California’s nine other biggest cities released a letter they sent to Gatto and Bocanegra advocating and encouraging expansion in the Film and TV tax credit. Today Gary Toebben of the LA Area Chamber of Commerce told the Taxation Committee that the tax credit first introduced in 2009 has “been a major success” but the state needs the new bill to improve it. “Every dollar in tax credits has generated $7 in wages and $19 in economic activity,” he added.
Toebben wasn’t the only one pushing for the proposed bill in Sacramento this afternoon. Film Commissioners from San Francisco, Sacramento and elsewhere in the state spoke out in support of the Act, as did various guilds and union officials. The Hollywood Chamber of Commerce, the LA Unified School District, the Walt Disney Corp., FilmLA, Fox Entertainment, NBCUniversal, SAG-AFTRA, Warner Bros Studios, the Animation Guild, and the MPAA “representing the six major studios”, all “urged an aye vote.” Like the previous committee hearing the voice of opposition was lead by the California Teachers’ Association. The influential organization said that AB 1839 “hurts funding to our schools.”