California Legislative Update
Two Year Tax Credit Extension Signed Into Law
Assembly Bill 2026 (Fuentes) and Senate Bill 1197 were signed into law by Governor Edmund G. Brown Jr. to extend funding for California's Film & Television Tax Credit Program. The two-year, $200 million extension ensures that tax credits will be available through fiscal year 2016-17. The original five-year Program enacted in 2009 was part of an economic stimulus package to increase film and TV production spending, jobs and tax revenues in California. Last year, the Program was extended for a single year through fiscal 2014-15 when the Governor signed AB 1069 into law. The new two-year extension provides added continuity and certainty to a program that has proved very successful.
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California Film and Television Tax Credit Program bills reach Governor Brown's Desk
Both state bills – AB2026 (Fuentes) and SB1197 (Calderon, formerly SB1167) have passed out of the legislature and are on their way to the Governor. The Governor has one month to sign or veto bills. These bills are identical and provide for a two year extension to the existing program through fiscal year 2017. The floor votes were as follows:
AB2026 – Senate Floor: Passed 33 – 2 / Assembly Floor: Passed 75 – 4
SB1197 – Senate Floor: Passed 26 – 0 / Assembly Floor: Passed 71 - 5
Below are links to a few articles of interest: http://www.variety.com/article/VR1118058551?refcatid=13 http://www.hollywoodreporter.com/news/sacramento-tax-credit-extension-governor-jerry-brown-367352
Assemblymember Fuentes, Film Industry Coalition Introduce Five Year Extension of California Film and Television Tax Credit Program
Assemblymember Felipe Fuentes and a broad coalition of film industry stakeholders introduced a bill today, AB 2026 that would extend the State's successful Film and Television Tax Credit Program by an additional five years. The original credit was enacted in 2009 as part of a targeted effort to create jobs, increase production spending, and tax revenues for the State. Assemblymember Fuentes authored AB 1069 last year, which extended the Program by one additional year – which allows for the last credits to be authorized in July 2013.
"By creating tens of thousands of jobs and pumping billions into our economy, the film and television tax credit program has truly been a statewide economic stimulus package," said Assemblymember Fuentes. "With the State's unemployment rate hovering around 12%, we need to extend this targeted incentive to help keep Californians employed. Extending this program will prevent production companies from moving their projects, jobs and spending out of California."
AB 2026 is a bi-partisan measure that has 18 co-authors including 4 principal co-authors – Assemblymembers Butler, Campos, Gatto and Senator Pavley.
"This bill is imperative to the economic vitality of our state. The film industry represents a vibrant segment of our economy and should be afforded the same opportunities in California as members of the industry can receive in other states," said Assemblywoman Betsy Butler a principal co-author of the bill. "California must work to ensure our signature industry is not enticed out of the state."
A recent study by the Los Angeles Economic Development Corporation (LAEDC) showed that the first two years of the Program generated $3.8 billion dollars in economic activity statewide, created more than 20,000 jobs and over $200 million dollars in tax revenues. The report also found that for every tax credit dollar allocated so far, there has been more than $20 pumped into the State's economy.
"Before the passage of the California Film Production Tax Incentive in 2009, film and television productions were leaving the state in droves for other states and countries that sought the jobs and local revenue that our industry can bring. Since the California Legislature passed this legislation, the film production incentive, as we knew it would, has lived up to its promise, generating $2.9 billion in spending and creating 29,000 jobs throughout California. Our state, as well as our industry, has reaped that economic benefit and we look forward to working with Assemblyman Fuentes and the other co-authors to ensure that the incentive is extended and that our members can continue to work and support their families, here in California," said Bryan Unger, the Associate National Executive Director/Western Executive Director of the Directors Guild.
So far, $400 million in tax credits has been allocated to eligible film and television productions. The program specifically targets productions that are the most likely to leave the state due to incentives being offered in other states and countries. Vans Stevenson, Senior Vice President, State Government Affairs, Motion Picture Association of America, said "We applaud Assemblymember Fuentes for his leadership in introducing an extension of the film production tax credit. If enacted, it will keep California competitive to attract these good middle class jobs and contribute to California's economic recovery."
Today over 40 U.S. states, New York City and Canada among others, offer substantial financial incentives to the film industry in an attempt to lure production and post-production jobs and spending away from California.
"The Screen Actors Guild strongly supports this effort to extend California's successful production incentive. Extending this program will ensure that SAG's more than 70,000 California members can continue to work in the state they love, at the same time patronizing local businesses and boosting our fragile economy," said Duncan Crabtree-Ireland Deputy National Executive Director and General Counsel of SAG.
"This program has proven itself in both job creation and increased economic activity throughout the State. Productions are planned sometimes years in advance and episodic cable series must be assured that if they are fortunate enough to qualify for the tax credit program and plan to keep their production here in California that these credits will be available for the run of the production," said Leo T. Reed Secretary-Treasurer of Teamsters Local 399 who represents thousands of drivers, location managers, casting directors and other basic crafts in the industry.