California lawmakers have passed legislation that aims to support and expand the film and television production industry in the state. The bill, known as Assembly Bill (AB) 132 and authored by Sen. Anthony Portantino (D-Burbank), received approval from the Legislature on June 27 and is currently awaiting Governor Gavin Newsom’s signature.
If the bill is signed into law, it will grant studios and production companies an additional five years to receive tax credits from the state’s annual $330 million allocation. The goal is to incentivize these companies to remain in California and contribute to the growth of the entertainment production industry in the state.
Sen. Portantino expressed gratitude for the approval of the bill, stating that it has been a priority of his and is important for many constituents in his district. He emphasized the significant economic benefits that come from keeping film production in California, particularly in the Los Angeles region.
The legislation to extend the program through 2030 is part of the state’s recently passed 2023-24 fiscal year budget, amounting to $311 billion. Various organizations, including the Directors Guild of America, the California entertainment union IATSE, Teamsters Local 399, Laborers International Union of North America Local 724, and the Entertainment Union Coalition, which is composed of the actors’ union SAG-AFTRA, praised the passage of the bill.
The program, administered by the California Film Commission, provides tax credits to qualifying productions that meet certain conditions. To be eligible, a motion picture must allocate a minimum of 75 percent of its production budget to goods, services, or wages within California. Alternatively, at least 75 percent of its total principal photography days must take place in the state.
However, certain types of productions, such as news programs, animation films, awards shows, commercial advertising, documentaries, and music videos, are excluded from the program. Since its inception in 2009, $2.9 billion in tax credits have been allocated to 652 qualifying productions, resulting in the hiring of 178,000 cast and crew members and the relocation of 33 television series to California.
As of July 2020, the program is projected to generate over $6.2 billion in total production spending throughout its five-year duration. The new legislation also introduces a provision to make the tax credits refundable if the accrued credit amount exceeds the tax owed, benefiting companies like Netflix.
In addition to the extension of the program, the bill includes new safety protocols that require production companies receiving tax credits to hire safety staff, implement set safety measures, and submit safety reports. These safety rules include restrictions on the use of firearms and ammunition on motion picture productions. Inspired by the tragic shooting incident on the set of Alec Baldwin’s film “Rust” in New Mexico, the bill incorporates language from a previous bill authored by state Sen. Dave Cortese (D-San Jose).
Furthermore, the legislation provides an opportunity for production companies to obtain additional tax credits by submitting diversity plans that include goals related to race, ethnicity, gender, and disability. As part of the bill, the Film Commission will add a board member who is an expert in diversity, equity, and inclusion and employed in the motion picture industry.
The passage of this legislation reflects California’s commitment to supporting and enhancing the film and television production industry in the state. By offering tax credits, implementing safety measures, and promoting diversity and inclusion, California aims to maintain its status as a premier destination for entertainment production and generate significant economic benefits.