Gov. Brown Trims Expansion Of California Film & TV Tax Credit In Deal With State Pols

EXCLUSIVE, 9:59 AM: Hollywood will still be getting a lot more money from the Golden State but not the $400 million that was announced on August 14 in the state Senate. Last minute negotiations last night between Gov. Jerry Brown’s aides and the state legislature leadership have trimmed the increase of California’s $100 million Film and TV Tax Credit Program to somewhere between $300 million and $350 million, sources tell me. (UPDATE, 10:06 AM: The final figure is $330 million) An announcement on the amended bill is expected this morning and could put before the state Senate as early as today. Having already passed the widely supported and multi-sponsored Film and Television Job Creation and Retention Act in late May, Assembly will have also revote on the now amended bill in the next few days before this year’s legislative sessions ends on August 31. The Act will then go to Brown for his signature. A signature widely expected with this deal. Among other changes, the expanded program will also now see the end of the annual lottery allocation system and allow big budget movies and network pilots to be eligible for credits.  With an emphasis on job creation, the program will run for 5 years starting next year as opposed to the present system of 2-year extensions. See below for statements from Gov. Brown, LA Mayor Garcetti and others.

Israeli Prime Minister Netanyahu Meets With California Gov. Jerry Brown In San FranciscoThe talks between Brown’s staff and the legislative leadership started last night after a daylong visit to Sacramento by the President of Mexico. The new figure and some other details were hammered out in a meeting between the Governor’s aides, Assembly Speaker Toni Atkins, outgoing Senate President Pro Tempore Darrell Steinberg and incoming President Pro Temp and Appropriations committee chair Kevin De Leon. Under the deal, next year will see the $100 million already in place under the existing program added to a new $220 million. Every year after until 2020 will be $330 million. The drop from the quadrupling of the current $100 million doled out annually comes as no real surprise as Brown has long made fiscal conservatism the hallmark of this year’s budget and legislative debate. In fact, the relatively small cut from the $400 million proposed earlier this month was a big surprise as many expected Brown to demand a figure far closer to $200 million. All along Jerry Brown has played his cards close to his office on this measure. Despite being asked directly by Deadline earlier this year, the Governor has actually never publicly come out in favor of the expansion.

However, the Governor and big tax credits booster LA Mayor Eric Garcetti have been in frequent touch over the past two weeks about the expansion, which the latter has been very vocal in his support of. Obviously Garcetti knew that the full $400 million wasn’t going to be the final number.  The shift was hinted at in an Emmys related press release from Garcetti’s office yesterday that referred to the legislature “debating a responsible increase in California’s film tax credit.”

UPDATE, 10:55 AM: “I’m just ecstatic that we’ve been able to come up with a deal,” said Assemblyman Mike Gatto (D-LA) today. LA Democrat Gatto co-authored the Film and Television Job Creation and Retention Act with Assemblyman Raul Bocanegra (D-Pacoima). The duo introduced the bill AKA AB 1839 on February 19. this year. “We’ve been working for two year with leaders here in California to ensure good middle class jobs stay here in the state. We were able to succeed today,’ Added Gatto.“This is a home run for California and the film industry,”said Bocanegra today. “We’ve said from the beginning that we needed to make California competitive again.  With this bill we do that.”

Governor Edmund G. Brown Jr., Assembly Speaker Toni Atkins, Senate President pro Tem-elect Kevin de León, Senate President pro Tem Darrell Steinberg, Assembly Republican Leader Connie Conway and Senate Republican Leader Bob Huff today announced a deal to expand, extend and improve California’s Film and Television Tax Credit Program.

“This law will make key improvements in our Film and Television Tax Credit Program and put thousands of Californians to work,” said Governor Brown.

Today’s agreement increases the tax credit to $330 million a year for five years beginning with fiscal year 2015-16 and replaces the currently flawed and arbitrary lottery system with a more competitive and accountable system.

“Today, we’re one step closer to premiering a statewide Film and TV Tax Credit that is smart and strategic– with a renewed laser-focus on creating good, new jobs for Californians. This is a crown-jewel industry that provides jobs and opportunity for middle-class families in every region of our Golden State. We’re sending a powerful signal today that we are 100-percent committed to keeping the cameras rolling and bright lights shining in our state for years to come,” said President pro Tem-elect de León.

“Not only does extending the Film Tax Credit keep cameras rolling in California, it will keep costumers designing, craft services catering, and carpenters hammering. It’s just common sense – when California hosts more production, we get more jobs and more revenue – two things our state can always use. I’d like to thank the co-stars of this effort, Assemblymembers Raul Bocanegra and Mike Gatto, President pro Tem-elect Kevin de Leon – and, of course, Governor Brown for ensuring the final scene is a good one,” said Assembly Speaker Atkins.

“In the last fifteen years, film production has dropped nearly 50 percent in California. In 2013, 21 of the 23 new prime time series were filmed outside of California. When that happens, it’s the ‘behind the scenes’ workers who take a hit, as well the ancillary businesses that serve the production sites and teams. If California is going to get these jobs back, we must compete with other states and nations who are clamoring for that big movie business. It’s one of the reasons why I am a co-author of AB 1839, and I want to thank the governor for his leadership to get a bill that keeps these jobs in California,” said Senate Republican Leader Huff, a co-author of the legislation.

“For too long, film and television productions have been leaving California for other states and countries. With California’s legacy as home to an entertainment industry that generates billions for our state’s economy, lawmakers must do everything we can to lure back these productions and the jobs associated with them. Assemblymember Wilk and lawmakers on both sides of the aisle have worked hard to reach agreement on this important legislation. I applaud its passage and our efforts to grow our economy and create and retain good-paying jobs,” said Assembly Republican Leader Conway.

The current film tax credit allows the California Film Commission to allocate up to $100 million of income tax credits a year to limited kinds of productions made in California. A lottery is used to award the credit. The new tax credit program eliminates the lottery system and applicants will instead be ranked according to net new jobs created and overall positive economic impacts for the entire state.

The legislation, AB 1839, is authored by Assemblymembers Mike Gatto (D-Los Angeles) and Raul J. Bocanegra (D-Los Angeles).

“This legislation means that the long journey started by our work with Tom Sherak and continued with Ken Ziffren is ending in success for California’s middle class,” said Mayor Eric Garcetti. “I’m grateful to the Governor and the legislature for this important measure to protect and expand an industry that is integral to our economy and our identity. I look forward to putting this legislation into action in partnership with California’s mayors, state lawmakers, the California Film Commission, the industry, and especially labor to restore California’s ability to compete for film production. The heart and soul of the entertainment industry are the artisans, craftspeople and tradespeople who you never see on screen, and that’s who will benefit from this legislation. We are the entertainment capital of the world and this legislation will make sure it stays that way. I want to especially thank Gov. Brown, Senator de Leon, Speaker Atkins, Assemblymenber Gatto and Assemblymember Bocanegra for their leadership on this important issue.”

The California Film & Television Production Alliance–a coalition of guilds, unions, producers, small businesses, studios, and associations that have worked together for more than a decade to promote, improve, and enhance film and television production in the State of California—today issued the following statement regarding Governor Jerry Brown, Assembly Speaker Toni Atkins, Senate President pro Tem-elect Kevin de León, Senate President Pro Tem Darrell Steinberg, Assembly Republican Leader Connie Conway and Senate Republican Leader Bob Huff’s announcement today on Assembly Bill 1839 (Gatto/Bocanegra), the California Film and Television Job Retention and Promotion Act.

“On behalf of hundreds of thousands of middle class California workers, creative talent, small businesses, vendors, local governments and film commissioners across the state, theatre owners, tourism, hotel and lodging associations, we are elated at the statement today by Governor Brown, Speaker Atkins, Senate President Pro Tem-elect de León, Senate President Steinberg, Assembly Leader Conway and Republican Leader Huff that California’s film and television production incentive program will be expanded, extended, and improved through the passage of AB 1839 and with funding of $330 million a year for five years. This is a win both for the State of California and the working men and women across this state who will no longer have only one choice— to leave their families to feed their families. Behind the glitter that most people associate with Hollywood is the glue that holds it together—the many talented and often unheralded men and women whose names fly by in the credits. Their voices are rarely heard but they are today: AB 1839 is for them.
We are grateful for the leadership of Governor Brown, Speaker Atkins, Senate President Pro Tem-elect de León, and Senate President Steinberg, along with Assembly Republican leader Conway and Republican Leader Huff who gave this legislation their support so it could move forward to a vote. We also wholeheartedly thank the two authors, Assemblymembers Gatto and Bocanegra for their leadership and commitment throughout the past year, as well AB 1839’s 70 co-authors. We look forward to working with all of them on passage in the Senate and Assembly and to the Governor’s desk for his signature.

Behind-the-camera workers lauded an agreement today by Gov. Brown and legislative leaders to keep film and television productions in California.
“Gov. Brown and Legislative Leaders have delivered a production incentive program that makes California jobs priority number one,” said Thom Davis, Business Manager of IATSE Local 80, representing film and TV technicians. “These leaders deserve a standing ovation for delivering a smart job-retention program for California when so many jobs are on the line.”

“Just as every job on a television or film set is essential to the success of the production, the teamwork of Governor Brown and legislative leaders is evident today,” said Ed Duffy, Vice President and Business Agent of the Teamsters Local 399, representing drivers, location managers and casting directors. “Tying production credits to job creation is a win for workers and California’s economy.”

The agreement today builds on the success of the current production incentive program while addressing limitations that limited its effectiveness, sending thousands of jobs out of state. The restructured incentives deliver a big job creation impact by enabling larger budget features, television network and other previously excluded platforms to participate. It also benefits the entire state by providing an additional incentive for filming outside of the Los Angeles area.


“The agreement reached by the Governor and legislative leaders this morning on this bill is a tremendous victory for the men and women who work in the movie and television production industry. Governor Brown and the state legislature have taken an enormous step toward stemming the loss of good middle class jobs in California. This bill offers stability and consistency for those who want to utilize the beauty, majesty and creative talent that California has to offer. It once again makes California a viable place to film the big budget movies and TV shows that generate thousands of jobs and millions in revenue and spending at businesses all across the state. It stands to bring billions of dollars into the California economy. The MPAA and our member studios thank Governor Brown, Senator DeLeon, Assembly Speaker Atkins, Assembly Members Gatto and Bocanegra and their colleagues for their leadership on this crucial legislation and for their commitment to the hardworking people who power an industry that has helped define California for more than a century.”


“The Directors Guild of America applauds the deal announced today by Governor Brown and legislative leaders to expand, extend, and improve California’s Film and Television Tax Credit Program. With their support, and the steadfast dedication and commitment of AB 1839’s authors and champions, Assemblymembers Raul Bocanegra and Mike Gatto, we are much closer to passage of this critically important legislation. The DGA has worked tirelessly, together with many other guilds, unions, and others in the entertainment community, on behalf of our members to ensure that California remains a viable place to make the films and television shows that provide good jobs for thousands of men and women each year while entertaining and inspiring millions around the world. We thank Assemblymembers Bocanegra and Gatto for leading the charge throughout the past year, and Senate President pro Tem-elect Kevin de Leon for ensuring that the bill is grounded in job creation, and we look forward to working with them, the legislative leaders, and Governor Brown over the coming days on passage of AB 1839.”

On behalf of California’s 80,000 SAG-AFTRA members, we applaud Gov. Jerry Brown, Assemblymembers Mike Gatto and Raul Bocanegra, Assembly Speaker Toni Atkins, Senate President pro Tem-elect Kevin de León, Senate President Pro Tem Darrell Steinberg, Assembly Republican Leader Connie Conway and Senate Republican Leader Bob Huff for recognizing the impact film and television production has on the state of California, and the importance of AB1839. We also thank our dedicated members who have worked tirelessly in support of this legislation and spoke out at events. This bill will enhance and expand California’s film and television tax incentive program and we look forward to AB1839 passing the state legislature and being signed by the Governor in the days ahead.

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