UPDATED, Saturday, 7 AM: Senator Chris Dodd, Chairman and CEO of the Motion Picture Association of America, Inc. weighed in early this morning on the passage of the bill to expand, extend and improve California Film and Television Tax Credit Program, lauding the move on behalf of the studios, saying it will bring billions of dollars into the state’s economy. “The MPAA and our member studios again thank Assembly members Gatto and Bocanegra, Senator DeLeon, Senate President Steinberg, Assembly Speaker Atkins, Republican Leaders Huff and Conway and their colleagues for their leadership in getting this important bill done,” he said. “It will bring tremendous benefit to the thousands of men and women in California who work in this industry, and it stands to bring billions of dollars into the state’s economy in revenue, spending and wages. We look forward to Governor Brown’s signature on the bill and commend the Governor and legislative leaders for their commitment to this industry that is so critical to the continued growth of California’s economy.”
PREVIOUSLY, Friday, 4:13 PM: It’s not totally signed, sealed and delivered, to quote Stevie Wonder, but Hollywood’s tax incentive is finally going to Gov. Jerry Brown’s desk. Two days after a deal was struck between the governor and the legislative leadership to increase California’s $100 million Film and TV Tax Credit Program to $330 million, the state Senate today passed the Film and Television Job Creation and Retention Act. The bi-partisan vote on the amended legislation was 32 to 2 with 6 Senators not voting. The bill is a response to years of seeing the film and TV industry “cannibalized by states and other countries poaching tens of thousands of good California jobs,” said Senator Kevin De León (D-Los Angeles) today introducing the Act on the Senate floor today. “This is a strategic investment.” The incoming state Senate President Pro Tem estimated that the expansion would increase production in the Golden State by five times once it fully kicks in. The bill’s passage fittingly comes the day before Labor Day weekend and it will be sure to be followed by statements from Hollywood guilds cheering the news.
With just two more days until the end of the legislative session, the widely supported and multi-sponsored AB 1839 now goes back to the Assembly, which first passed the Act in late May, for a quick revote on the new amendments. It then goes to Brown for his done-deal signature. Not that he has to rush: The governor actually has until September 30 to sign the legislation. When Brown does put pen to paper, it is expected he will have big signing ceremonies in both LA and San Francisco with studio execs production crews and local pols in attendance.
Before the Senate voted on the bill this afternoon, Senator De León told Deadline: “When it comes to fueling an engine of job creation with taxpayer dollars, ‘good enough’ isn’t good enough anymore. The biggest change the Senate Appropriations Committee made to AB 1839 is we replaced the lottery with a jobs ratio, a competitive evaluation based on the number of jobs created by the film production. Now we can finally be assured — clearly and transparently — that California’s taxpayers are receiving the maximum possible economic return on this investment.”
Lottery or no lottery, Hollywood loves a show and the town will love even more to hear that the expansion to the five-year program will be implemented beginning next year. While it looked like the program would go up to $400 million at one point, Hollywood will also be happy to hear exactly how much more money is on the table for both film and TV.
The 2015 purse combining next year’s already allocated $100 million with a new $230 million includes $80.4 million for feature films. This will cover, for the first time since the program was introduced in 2009, pics with budgets of more than $75 million. Feature film credits amount to 35% of the $330 million total, the second-largest part of the expanded program. The biggest portion is the 40% for New TV pilots and Renewed Series, which will get $92 million for budget year 2015-16. The incentive allocation for features films goes up to $115 million from 2016 onwards and the TV category rises to a solid $132 million for the remaining four years of the newly passed program. That’s more for those now expanded categories each than the entire total of the current program.
Taking the fight to the other regions, the Relocating Productions From Out of State category will make up 20% of the expanded program with $46 million for next year. Georgia and Louisiana better look out because that goes up to $66 million in 2016. Indie films will make up 5% of the new tax incentives with $11.5 million in 2015-2016 and up to $16.5 million every remaining year of the program afterward.
The amendments to the act ensure that no unused funds go to waste, with money rolled into the TV categories or others the California Film Commission designates, and the expanded incentives become fully funded in 2016 and run until 2020. The program is scheduled to be reevaluated before that sunset date. All of which means its showtime in the Golden State adnd the home of Hollywood is ready to bring runaway production back home.
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