Assembly approves film and TV tax credit bill

A bill that aims to halt the flight of film and TV production from California has been unanimously approved by the Assembly.

The Assembly voted in favor of AB 1839, which would renew and increase a state tax credit — amounting to as much as $400 million a year — to better compete with generous tax subsidies available in such states as New York, Louisiana and Georgia, as well as in Canada and Britain.

Currently, California allocates $100 million annually using a lottery system to award tax breaks to a limited number of production companies.

AB 1839 would allow a broader swath of productions to qualify for the incentives, which enable producers to reduce their tax liability by as much as 25% of the cost of many production expenditures.

The the California Film and Television Job Retention and Promotion Act would remove current restrictions that prevent movies with budgets greater than $75 million, as well as new TV network dramas, from qualifying for the incentives.

A coalition of movie-related trade unions, studios, caterers and other service providers, film commissions and local governments, including the city and county of Los Angeles, have lobbied lawmakers for months to support the bill, citing statistics showing Southern California is losing its homegrown industry to rivals.

“The strength of the unanimous vote demonstrates the Assembly Members’ clear understanding of the vital economic importance of the motion picture industry to California and their determination to return this state to a competitive position,” said a statement from the California Film and Television Production Alliance. “Our industry has been a vital part of California’s heritage and we want to continue be part of the Golden State’s economic vitality in the 21st century.”

The bill, written by Assemblymen Mike Gatto (D-Los Angeles) and Raul Bocanegra (D-Pacoima), would replace a 2009 law and extend the program until 2022.

To date, it has funded about 270 projects, generated $4.75 billion in economic activity and created 51,000 mainly high-paying jobs, many for skilled workers such as electricians, carpenters, animators and cinematographers, the legislators said.

The bill now goes before the Senate, where it is expected to face a tougher challenge. Some Northern California lawmakers have been skeptical of the program. It’s also unclear whether Gov. Jerry Brown will back the measure.