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California film tax credit bill OKd by Assembly panel

The proposal, which aims to stem so-called runaway film and TV production, would renew and boost a state tax credit to better compete with subsidies and studios elsewhere.

March 25, 2014|By Marc Lifsher
  • Proposed legislation would extend the California film tax credit program until 2022. It would broaden eligibility to include big movie productions, all television series and provide a special incentive for shooting outside the traditional Los Angeles-centered area. Above, filming of "Gangster Squad" at L.A. City Hall in 2011.
Proposed legislation would extend the California film tax credit program… (Michael Robinson Chavez…)

SACRAMENTO — Proposed legislation aimed at providing more tax credits to attract so-called runaway movie and television productions back to the industry's birthplace in California won initial approval from a legislative committee Tuesday.

The proposal 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 more than 40 states, including New York, Louisiana, New York and Michigan, as well as studios in Canada and Britain.

The tax credit would allow most film and TV production companies to reduce their tax liability by 20% of the cost of many production expenditures.

The movie industry, supporters said, is too important to California's economy, history and image to be allowed to slip away. "This is our industry to keep or lose," said Assemblyman Richard Bloom (D-Santa Monica). "We need to send a message to New York, England and other states competing for our jobs and say, 'It stops here.'"

The bill, AB 1839 by Assemblymen Mike Gatto (D-Los Angeles) and Raul Bocanegra (D-Pacoima), passed Tuesday on a 7-0 bipartisan vote by the Assembly Arts, Entertainment, Sports, Tourism and Internet Media Committee. Gatto said he expects an easy transit through the Assembly but conceded that the bill might face more skepticism in the Senate and governor's office. Gov. Jerry Brown has not taken a public position.

Representatives from movie-related trade unions, studios, caterers and other service providers, film commissions and local governments, including the city and county of Los Angeles, filled the ornate Capitol hearing room with spontaneous applause. The measure now moves to the Assembly Revenue and Taxation Committee.

"We can't afford to let any more jobs abandon our state," Gatto said. "This effort is a rare example of government appropriately taking steps to ensure well-paying jobs stay in California."

About 70 lawmakers have signed on as coauthors of the bill, which has solid support across party lines and in all regions of the state. The only public opposition came from the California Teachers Assn. and the California School Employees Assn. The two groups said they opposed giving special tax breaks to a particular industry. The money, they suggested, would be better spent on K-12 education.

The Gatto-Bocanegra bill, if passed, would replace a 2009 law that has provided $100 million a year in credits. 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 proposed legislation would extend the program until 2022. It would broaden eligibility to include big movie productions, all television series and provide a special incentive for shooting outside the traditional Los Angeles-centered area.

According to Gatto's office, film production in California has declined by half in the last 15 years. Just last year, 21 of 23 prime-time television series were filmed outside California, transferring jobs to other states and forcing many longtime California residents to move away, Gatto's office said.

"I don't want to move, but there's tons of work in Atlanta," said Ed Gutentag, a Topanga cameraman who says he's moving to Georgia in a few weeks.

Chef Robert Lamkin testified that he would like to keep his mobile catering kitchens close to home in Southern California.

"I'm forced to chase work to other states that have the latest and sexiest rebates," he said. "I'm forced to hire people from other states."

marc.lifsher@latimes.com

Twitter: @MarcLifsher

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