EXCLUSIVE: Taking it down to the wire, lawmakers in Sacramento are looking to increase California’s $100 million Film and TV Tax Credit Program by up to 300%. As the multi-sponsored Film and Television Job Creation and Retention Act heads to the important state Senate’s Appropriation committee on Monday, it will be amended to include a figure of around $400 million, sources tell me. In fact, the dollar figure for the annual incentive could go up to more than $400 million to exceeded the $420 million that New York state hands out each year to attract production to the Empire State. “The final numbers are still being added up but between $300 and $400 million looks pretty certain to be submitted in an amendment next week,” a political insider told me. “In discussions, the figure hasn’t really ever dropped below $400 million for the legislation” another source noted.
Though long desired by ailing the Hollywood production community, the surge in California’s tax incentives will not happen in one fell swoop. The spotlight on the anti-runaway production legislation means the Act likely won’t see action before the Appropriations committee until August 14 even though it is on the agenda for the August 11 hearing. The California Legislature ends its 2013-2014 session at month’s end, and the last-minute scramble is on with a high number of bills being put before the committee. To that end, the August 11 hearing will punt the Act three days until the August 14 hearing before the dollar figure plus other amendments attached to the incentive bill are announced. That August 14 date will probably see the committee taking a vote. Sources also say negotiations between Gov. Jerry Brown and the legislative leadership over the tax credits will begin soon, perhaps even before the hearing.
Although Brown last signed the extension to the Golden State’s lottery-awarded tax incentive program on September 30, 2012 — the last day possible — the financially prudent (and up for re-election) governor has not yet come out in public for this new bill. That’s a hurdle to come, however; with expansion supporter Sen. Kevin de León (D-LA) heading Appropriations, the proposed legislation is widely expected to pass through later this month. After that, it will head to the Senate floor for a full vote. In a packed summer session, that vote could come anytime between August 14 and the end of the month. If the bill gets through the Senate, it goes to Brown’s desk for his signature.
Introduced in late February by Democrats Mike Gatto and Raul Bocanegra, the legislation was overwhelmingly passed by the state Assembly on May 28 despite the fact a dollar figure was not attached. The legislation aims to make films budgeted over $75 million and network pilots eligible for tax credits, and seeks to have the program run five years — from 2016 to 2021 — as opposed to its current two-year extension window used since the incentive was introduced in 2009. Gatto has said the strategy behind not putting a price tag out there was to wait until the state budgetary dust and political wrangling settled in a year that saw a record 497 applications submitted to the California Film Commission for the program.
While pols have held their tongues, industry leaders have been advocating a figure in the $300-plus ballpark for months, seeing it as a way to help stem the flood of production out of Hollywood to more lucrative states like NY, Georgia and Louisiana, Canadian provinces and the UK. LA Mayor Eric Garcetti has suggested the current $100 million allocation should be more than doubled to be effective.
The Act passed its first test in the state Senate on June 25 when it got a 4-0 vote from the body’s Governance and Finance Committee. Committee chair Sen. Lois Wolk abstained from voting for the bill because she didn’t “like blank checks.”