Where Did the $750 Million Go? Hollywood Incentive Bill Passes CA Senate Without Newsom's Pledge

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2 days ago

Legislation aimed at modernizing and expanding California's program that provides subsidies to film and TV productions has passed the California Senate, though this version of the bill doesn't commit to increasing the cap from $330 million to $750 million a year.
Tuesday's near unanimous vote was 34 to one, with the only dissent coming from Sen. Roger Niello (R-Sacramento). The bill, which now heads to the state Assembly for consideration, would vastly boost subsidies to shoot in the state to at least 35 percent while expanding the category of productions that qualify to include shorter TV shows, animated titles and certain types of unscripted projects.
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Its passage is a crucial victory for workers across Hollywood who've seen significantly less work as productions increasingly opt to shoot in other areas that offer more tax credits. It's the first step in revamping California's program amid a tit-for-tat race to host the entertainment industry.
'We need to do whatever we can to make sure California remains the number one entertainment capitol of the world,' said Sen. Tony Strickland (R-Huntington Beach). 'In order to do that, we need to be in the ballpark. We don't need to top other states, but we need to be in the ballpark.'
If passed, Senate Bill 630 would bring the most significant changes to the program since its inception in 2009. The bill, SB 630, was spurred by a historic downturn in filming in the state. The 20 percent base credit offered by California is lower than most competitive film hubs, including New York, Georgia and the U.K.
There was broad bipartisan support for the bill, with several lawmakers stressing the impact that the downturn in production has had on their districts in recent years.
'The domino effect is vast,' said Sen. Carolina Menjivar (D-San Fernando Valley), whose district includes Burbank. 'This impacts dry cleaners and the people with small restaurants around these studios. They've noted a decreased amount of pedestrian traffic to their businesses because they're surrounded by studios and there's not a lot of work.'
Sen. Suzette Martinez Valladares(R-Santa Clarita) said that soundstages and postproduction houses in her district are suffering as productions opt to work with vendors in other states and countries. She pointed to the first season of Amazon's Fallout filming in New York despite the story taking place in a post-apocalyptic California (season two opted to shoot in California after receiving tax credits).
'We're losing significant ground,' she said. 'Other states have built entire industries luring production away from California.'
Under the bill, productions could get 35 percent of their spend back for costs incurred in the states. An additional five percent credit would also be available for shooting in certain areas outside Los Angeles.
And in a bid to keep up with other regions broadening the types of productions that can receive subsidies, TV shows consisting of two or more episodes of at least 20 minutes would qualify for the program, which currently only allows series with episodes of at least 40 minutes to qualify. Other productions that could get credits under the revisions to the bill include sitcoms, animated films, series or shorts and 'large-scale competition' shows, excluding reality, documentary programming and game or talk shows. They must have budgets of at least $1 million.
The bill, however, doesn't contemplate allowing any portion of above-the-line costs, like salaries for actors, directors and producers, to qualify for subsidies. California is currently the only major film hub to maintain such a scheme.
Sen. Ben Allen (D-Santa Monica) said that the state wants to 'avoid a race to the bottom.' He added that the program is 'grounded in jobs creation and economic activity' unlike Georgia's.
The legislation is expected to meet more resistance on Thursday at the state Assembly, where lawmakers could express concerns over increasing subsidies to film and TV productions as the state proposes major cuts to health care and universities.
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