California holds its final film tax credit lottery

A new and expanded tax credit program is intended to keep more production from fleeing California

The California Film Commission this week held its final film tax credit lottery, closing the chapter on a controversial program that frustrated many film producers.

On Wednesday, the commission held its seventh and final lottery as it phased out the old film incentives program with a new and expanded version intended to keep more production from fleeing California.

The lottery was typically oversubscribed: The commission said 18 independent films were selected at random from 246 applications for tax credits. The commission did not identify the projects, saying their applications were subject to further review. Another 228 applications were put on a waiting list.

(Comparisons with last year are difficult because this year's lottery was limited to independent films. That's because most of the incentive money was gobbled up by existing television shows such as "Teen Wolf" and "Pretty Little Liars" that received priority under the old program).

But independent film producers who didn't make the cut will have other opportunities later this year to apply for incentives, which allow filmmakers to recoup up to 25% of expenditures on crew member wages and other qualified production costs.

"The good news is that all of these productions will get a second chance to apply for the money," said Amy Lemisch, executive director of the California Film Commission.

Last year, the Legislature signed a law to disband the lottery program and replace it with an expanded program that will triple funding to $330 million annually. The new program also allows more projects to qualify, such as big-budget features and TV pilots.

Instead of using a lottery, the new system will award credits based on a "jobs ratio" that takes into account how many people productions employ relative to the size of their credit. Applicants can boost their ratio if they do visual effects work in California or film outside the Los Angeles zone.

The Legislature also established separate pools of funds: 40% will go to new dramas, movies of the week, miniseries and recurring TV series; 35% will go to features; 20% will go to relocating TV series and 5% will be set aside for independent features.

The commission will take applications May 11-17 for studio TV projects and July 13-25 for independent and feature films. A third allocation will occur sometime in the winter.

"We are receiving lots of inquiries from the studios about the program and we very much anticipate they are looking to submit for a variety of projects," Lemisch said.

Twitter: @rverrier

Copyright © 2016, Los Angeles Times