California lawmakers took a significant step forward in revitalizing the film industry by passing legislation aimed at modernizing the state’s Film and Television Tax Credit Program. Governor Gavin Newsom signed the bill into law, emphasizing its role in enhancing California’s pledge to support film and television production.
The legislative approval, finalized earlier this week, comes alongside a substantial commitment of $750 million in incentive funding. The newly adopted amendments to the tax program broaden eligibility criteria and increase the credit amount available for productions based in Los Angeles. Individual projects can now receive a credit of up to 35% for qualifying expenses, along with an additional 5% credit for productions in regions identified as economic opportunities.
Under Assembly Bill 1138, the cap for production incentives has been raised to $120 million, and funding for independent films will see a threefold increase from $26 million to $75 million. This strategic investment aims to increase employment opportunities within the film industry and foster career development through partnerships with non-profit organizations.
Set to take effect in July, these changes have been celebrated by various industry groups, including the Entertainment Union Coalition and the California Production Coalition. The latter expressed appreciation for the legislative efforts, highlighting that this enhancement strengthens California’s competitive edge and facilitates new projects throughout the state.
“This programmatic upgrade, coupled with last week’s increased funding, is vital for maintaining our industry’s momentum and helps support the families and businesses connected to it,” a spokesperson from the California Production Coalition stated.
The Entertainment Union Coalition, through its advocacy campaigns, also underscored the importance of this bill for job creation. They emphasized their collaborative efforts to ensure that studios commit to revitalizing local work opportunities for their members.
Grassroots organization StayinLA, which emerged in response to the challenges posed by wildfires, also voiced its enthusiasm about the passage of AB1138. Co-founder Pamala Buzick Kim described the legislation as a crucial lifeline for families and enterprises impacted by the fires, reiterating the necessity of nurturing California’s creative economy.
“Victory for us reflects the strength of community efforts,” said co-founder Alexandra Pechman. She noted the impact of collective action, from petitions to public testimonies, that helped bring about the changes encapsulated in this new law.
The hope now is to stimulate physical production across California, drawing new projects to the state and encouraging existing productions to return. During a recent news conference, Newsom announced that the second season of the Prime Video series “Mr. & Mrs. Smith” will be filmed in Los Angeles County, highlighting a trend of productions relocating from locations like New York.
Earlier this month, the California Film Commission allocated $96 million in tax incentives to over 40 film projects, signaling a shift toward supporting independent productions, many of which have budgets of $10 million or less. This strategic push could pave the way for a more sustainable and diverse film landscape in California, invigorating both the local economy and the industry overall.