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CA tax credit program extension moves forward
Assembly committee gives 5-year, $500 million measure 2nd OK
By: Dave McNary
Posted On: May 14, 2012
An Assembly committee has given the second approval to a bill extending California's Film and Television Tax Credit Program by an additional five years and another $500 million.
The Revenue and Taxation committee approved Assembly Bill 2026 unanimously Monday. The legislation is set to be heard next week by the Assembly Appropriations committee.
Assembly member Felipe Fuentes (D-Sylmar) authored the legislation, which was approved unanimously on April 17 by the Assembly Committee on Arts, Entertainment, Sports, Tourism and Internet Media. The bill has been backed by the MPAA, SAG-AFTRA, the Directors Guild of America, the California Chamber of Commerce and the California Labor Federation.
Fuentes carried last year's legislation, which extended the program for a single year after the original bill provided for five years. Showbiz producers and unions have been strong supporters of California's 4-year-old Film and Television Tax Credit Program, which has doled out $400 million in tax credits to date.
The program was extended for a year in October when Gov. Jerry Brown signed Assembly Bill 1069 on the final day for the governor to approve or veto bills from last year's legislative session. The state Senate had voted Sept. 9 to extend the program for a single year rather than the five its backers had sought.
The next round of tax credits -- totaling $100 million -- will be allocated in July. The final $100 million will be allocated in July 2013 unless the program is extended.
A study issued last year by the Los Angeles Economic Development Corp. showed that in its first two years, the program has generated $3.8 billion in economic activity statewide, created more than 20,000 jobs and generated more than $200 million in tax revenues. Opponents of the program contend that the tax credits benefit studios and other well-heeled production companies, and questioned the accuracy of the projections of economic benefits.
California's program, which offers a maximum rebate of 25%, is far smaller than those of other states.