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State lawmakers reach deal on film tax credit

Posted: August 27, 2014 6:07 p.m.
Updated: August 27, 2014 6:07 p.m.

A crew at work filming in the Santa Clarita Valley in 2011. Santa Clarita has made filming a priority in its bid to lure industry to the Santa Clarita Valley. Signal file photo

California lawmakers and Gov. Jerry Brown said Wednesday they have reached a deal that would offer $330 million a year in tax credits for Hollywood film productions over five years.

The Democratic governor announced the bipartisan agreement before the Legislature was expected to consider it, but the deal was considered to be as good as done by both the governor’s office and state lawmakers.

“This law will make key improvements in our Film and Television Tax Credit Program and put thousands of Californians to work,” Brown said in a statement issued by the California Film Commission.

Wednesday’s agreement increases the tax credit to $330 million a year for five years beginning with fiscal year 2015-16 and “replaces the currently flawed and arbitrary lottery system with a more competitive and accountable system,” the commission said.

The previous tax credit only allotted $100 million in tax credits. New York, which lured many California productions away from Hollywood’s home state, has been offering $400 million in credits.

“Retaining and growing the film industry is more than an economic issue; it’s a quality of life issue,” Assemblyman Scott Wilk, R-Santa Clarita, said in a statement. “Too many families are separated by runaway film production. With this bill, help is on the way.”

The new tax credit program eliminates the lottery system that had been used to award tax credits. Applicants will instead be ranked according to net new jobs created and overall positive economic impacts for the entire state, according to the commission.

Wilk is a principal co-author of the bill authored by Democratic Assemblymen Raul Bocanegra and Mike Gatto of Los Angeles. They had sought $400 million a year in credits.

Before a deal was reached on the bill, Wilk told the SCV Business Journal last week that he hoped parties would agree on a film credit worth at least $300 million to compete with New York’s incentives.

While working in his district, Wilk said he had met several people with a spouse in the film industry working out of state because that was where the work is. Leaving home for work is disruptive to family life, he said.

Calling it one of the more important pieces of economic development, Wilk noted industry jobs are higher-paying than many other available jobs.

“Filming is one of the great industries in California, especially in the Santa Clarita and Antelope valleys,” Senator Steve Knight, R-Palmdale told the SCV Business Journal. “It’d be great if folks could be filming at home and sleep in their own beds.”

Knight is a co-author of the bill.

The deal helps make California look competitive and more attractive than other states working to lure the industry away from California, Knight said.

“For too long, film and television productions have been leaving California for other states and countries,” said Assembly Republican Leader Connie Conway. “With California’s legacy as home to an entertainment industry that generates billions for our state’s economy, lawmakers must do everything we can to lure back these productions and the jobs associated with them.”

Wilk and lawmakers on both sides of the aisle have worked hard to reach agreement on the legislation to grow the economy and create and retain highly paying jobs, Conway said.




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