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Governor and Legislative Leaders Agree to Film and TV Tax Credit Legislation

August 28, 2014
Gov. Jerry Brown announced on Wednesday that he and Assembly Speaker Toni Atkins (D-San Diego), Senate President Pro Tem-elect Kevin DeLeon (D-Los Angeles), Senate President Pro Tem Darrell Steinberg (D-Sacramento), Assembly Republican Leader Connie Conway (R-Tulare) Senate Republican Leader Bob Huff (R-Diamond Bar) have reached a deal on the California Film and Television Job Retention and Promotion Act.
AB 1839 (Gatto) will bring economic benefit to multiple parts of California due to provisions offering incentives for film production outside the Los Angeles area.

Supported by the League, AB 1839 authorizes the allocation of $1.6 billion ($1,650,000,000) in tax credits over five years, or $330 million annually, for film and television projects in California. This represents a significant expansion of the existing program, under which the California Film Commission is authorized to $100 million in tax credits annually. AB 1839 extends this program by four years and offers the following additional incentives:
  • Allows for a 5 percent increase in the tax credit, from 20 percent up to a maximum of 25 percent, for expenditures and film production performed outside the Los Angeles area;
  • Offers a 25 percent credit for TV shows that relocate to California within the first year of production;
  • Offers a 25 percent credit for films that spend $10 million in California or commit 75 percent of qualified expenditures related to visual effects in California;
  • Offers an additional 5 percent increase in the tax credit for costs related to music scoring and music track recording being incurred in California;
  • Awards credits according to a jobs rating system, whereby applications are ranked based on the number of jobs created; and
  • In order to ensure that like projects are competing against one another, AB 1839 establishes separate funds for independent films (5 percent on each annual allocation), TV pilots and renewed series (40 percent), feature films (35 percent), and relocating productions from outside the state (20 percent). 
This measure will help restore California’s competitive edge by directly addressing national and international competition for film production while providing an economic stimulus to California’s film industry and its economy in general. 

To date, this program has contributed more than $4.75 billion to California’s economy and created over 51,000 jobs. AB 1839 will ensure that these economic benefits continue well into the next decade.

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