The California Assembly overwhelmingly approved a bill that would preserve funding for the state's film and television tax credit.
The Assembly voted 70-4 in favor of the bill, which extends funding for the program another two years. California allocates $100 million annually toward tax credits, which are doled out by lottery because of limited funds. Funding was due to expire next year.
The film industry had been pressing for a five-year extension to show the state's commitment to the industry, which is being lured away by other states with strong incentives. But that proved a tall order in light of the state's budget woes.
The state Senate is expected to hold its first committee hearing on a similar bill next week.
A coalition of labor unions, including the Directors Guild of America, Teamsters, and SAG-AFTRA, lauded the vote.
"Without the extension, the State of California will have no chance of competing with more than 40 states and many foreign countries that offer generous incentive programs to retain and attract qualified motion pictures and television programs, resulting in the loss of tens of thousands of middle class jobs and all the ancillary economic benefits that a thriving entertainment industry brings to the economy,'' the coalition said in a statement.