California State Assembly Advances Tax Credit Bill

California State Assembly Advances Tax Credit Bill

By Sean J. Miller

August 9, 2012


Assembly Member Felipe Fuentes
The California State Assembly edged toward a full vote on legislation extending tax credits for the entertainment industry Wednesday.

After a lengthy hearing, the Assembly’s appropriations committee unanimously passed a bill granting a two–year extension to the California Film & Television Tax Credit Program. Assembly Member Felipe Fuentes, D-Montebello, the committee's chairman, had originally sought a five-year extension—a term Hollywood has also pushed for. But the bill was amended to extend the program only through 2017. The level of funding was maintained at $100 million a year.

Fuentes had a similar experience last year, when he shepherded legislation extending the program. He sought a five–year extension only to see state lawmakers opt for a one–year supplement instead.

A coalition of interest groups—including the Directors Guild of America, SAG-AFTRA, state film commissions, and labor unions—has pushed for a five–year extension to ensure stability and help producers plan for upcoming projects.

Some studios recently made a public plea for the program. Warner Bros. released a detailed account of its local expenditures, it said, in order to educate Sacramento about the economic impact of the entertainment industry on Southern California.
 
This push has come at a time when other states are aggressively courting productions. New York recently tripled the state’s tax credit on post-production to 30 percent. California doesn't offer a similar incentive.

Still, critics of the tax credit program say it favors one California industry over another and amounts to nothing more than a hand out to wealthy Hollywood producers.

The two-year extension now goes to the full State Assembly for a vote, which will likely take place next week. Last month, the Senate committee on governance and finance approved a two–year extension of the $100 million program, but the legislation still has to go through the upper chamber's appropriations committee.


California State Assembly Advances Tax Credit Bill

By Sean J. Miller

August 9, 2012


Assembly Member Felipe Fuentes
The California State Assembly edged toward a full vote on legislation extending tax credits for the entertainment industry Wednesday.

After a lengthy hearing, the Assembly’s appropriations committee unanimously passed a bill granting a two–year extension to the California Film & Television Tax Credit Program. Assembly Member Felipe Fuentes, D-Montebello, the committee's chairman, had originally sought a five-year extension—a term Hollywood has also pushed for. But the bill was amended to extend the program only through 2017. The level of funding was maintained at $100 million a year.

Fuentes had a similar experience last year, when he shepherded legislation extending the program. He sought a five–year extension only to see state lawmakers opt for a one–year supplement instead.

A coalition of interest groups—including the Directors Guild of America, SAG-AFTRA, state film commissions, and labor unions—has pushed for a five–year extension to ensure stability and help producers plan for upcoming projects.

Some studios recently made a public plea for the program. Warner Bros. released a detailed account of its local expenditures, it said, in order to educate Sacramento about the economic impact of the entertainment industry on Southern California.
 
This push has come at a time when other states are aggressively courting productions. New York recently tripled the state’s tax credit on post-production to 30 percent. California doesn't offer a similar incentive.

Still, critics of the tax credit program say it favors one California industry over another and amounts to nothing more than a hand out to wealthy Hollywood producers.

The two-year extension now goes to the full State Assembly for a vote, which will likely take place next week. Last month, the Senate committee on governance and finance approved a two–year extension of the $100 million program, but the legislation still has to go through the upper chamber's appropriations committee.
 
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