California Film Credit Expansion in Flux as Lawmakers Delete References to $750 Million

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The proposed growth of the California film and television tax credit, considered vital by industry insiders for preserving jobs within the state, encountered a setback last Friday. This is because legislators omitted any mention of increasing the program’s maximum limit to $750 million from the bill’s wording.

Governor Gavin Newsom pledged back in the fall to boost the program from $330 million up to $750 million. Two bills, AB 1138 and SB 630, are currently making their way through the legislative process with the aim of implementing this increase and other modifications to enhance the program’s appeal for producers.

On a Friday, the legislative bodies, the Assembly and Senate, approved the bills in their respective appropriations committees; however, the stipulation of $750 million was taken out. For the moment, this amount might be reinstated during the budget proceedings, but it’s not certain at present.

Senator Ben Allen expressed his disappointment with this particular direction and shared his intention to challenge it during budget negotiations when they become more intense. He has been observing the deterioration of a vital industry over the past few years, and he feels that we can no longer be passive spectators. To keep California as the world’s entertainment center, this program requires modernization.

Leaving out the monetary value might cause a temporary setback during the approval process. Advocates of the industry are optimistic that the expansion will receive the green light.

Assemblyman Rick Chavez Zbur, the bill’s author, stated that although nothing is ever completely certain, he strongly feels that there is widespread backing for this increase in both chambers of the legislature.

Zbur expressed a high level of confidence that the final figure will remain at $750 million. He considered it a successful day as they managed to pass the bill.

The modifications occurred once the committees cast their votes on numerous proposals, each needing to be extracted from the “waiting list” to reach the main debate.

Last week, Newsom expressed his backing for the proposed $750 million hike. This came shortly after he presented a revised budget plan to the Legislature.

“We need to step things up,” he said.

The Legislature needs to approve the budget by June 15th, but it’s possible that certain budget-related matters might get resolved after that date through supplementary legislation, often referred to as “trailer bills”.

Representatives from numerous entertainment unions have been present at multiple hearings held in Sacramento this spring, advocating for expansion. In their testimonies before Assembly and Senate committees, they’ve made the point that California needs to take further steps to match enticing incentive programs offered by other states and foreign countries.

Under the proposed changes, the tax credit for eligible costs would be raised from 20% to 35%. This rate would climb even higher, to 40%, for film productions that take place outside of Los Angeles, or within economically struggling regions of the city itself.

The plan is to broaden the scope of this program to encompass not just movies, but also animated films and television series, including sitcoms and major competition programs. Furthermore, changes may be made to allow composers to qualify for consideration.

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2025-05-24 01:16