[ad_1]
Which are intensified rapidly.
In May, Governor Gavin Newsom announced an additional $ 30 million for the state’s film and television tax credit program. Not to be outdone, the Legislative Assembly offered $ 180 million over two years.
More Variety
Now the two sides have come to a compromise: $ 330 million.
That includes the $ 180 million, plus a brand new $ 150 million tax incentive to boost the construction of new sound stages in the state.
“I am very excited,” said Senator Anthony Portantino, who represents Glendale and Burbank, and who has been pushing for the construction incentive. “If we develop more capacity, it will lead to more production and more jobs. “
The new money is on top of the $ 330 million in tax credits the state already gives Hollywood each year. The windfall comes as the state spends a record budget surplus of $ 75 billion, including billions on homelessness, social services and education.
The tax credit bill was unveiled on Sunday evening and is expected to pass both houses and get Newsom’s signature. The bill also requires productions that receive sound stage credit to submit a diversity plan and states that the plan “will include goals that broadly reflect the Californian population, in terms of race and gender.”
This language goes further than previous state efforts on diversity, which have typically focused on data collection and incentive-based job training programs. In the past, lawmakers feared that anything that could be interpreted as a quota would violate Proposition 209, the constitutional amendment that bans affirmative action in the state.
“We want to be constitutional, and we think we are,” Portantino said. “By asking productions to launch their own plans, I think this is an exceptional solution to the problem.”
Portantino had introduced an incentive bill earlier in the session, but he died in the Senate. Portantino was able to revive it during budget negotiations. The measure enjoys strong support from Hollywood unions and the State Building and Construction Trades Council.
“Other states and countries are working hard to try to woo this industry and they have had some success,” said Robbie Hunter, chairman of the building trades council and chairman of the Entertainment Union Coalition, Thom Davis, in a statement. joint statement. “In California, we cannot afford to lose more middle class blue collar jobs. We will make sure this industry stays where it was born and where it belongs, and we are determined to grow it through our efforts. “
The Los Angeles area has 5.2 million square feet of studio production space, 40% more than its closest global competitor, the UK. It has double the production space in Toronto and almost triple the available space in New York City, according to the latest data compiled by FilmLA. However, some expressed concern that competitors are adding capacity.
Sound stages in the Los Angeles area experienced average occupancy rates of 94% for 2019, the latest year for which data is available. Several new soundstage projects have been announced recently, although it is not clear who would benefit from the new incentive. Among them, Echelon Studios, a $ 450 million Hollywood project announced in May by Bain Capital. Hackman Capital Partners also recently announced a $ 1.25 billion renovation of Television City.
The soundstage incentive will work very differently from traditional California film credit. The money will not be divided into separate installments for different types of productions, and the credits will not be awarded on the basis of a competitive “job ratio” process. Instead, the credit will be opened on a first come, first served basis to qualified applicants. Each film or television production will be limited to $ 12 million in credits each, based on 20% or 25% of eligible expenses.
To qualify, a production must shoot at least 50% of its programming on a new or renovated soundstage. The soundstage construction must cost at least $ 25 million and the soundstage project must obtain its building permit once the bill is signed.
The soundstage incentive expires in 10 years, but the $ 150 million will likely be consumed much sooner than that. Portantino estimated it would take around three years, but it could go even faster.
Much of the California tax incentive program is aimed at encouraging TV series to move from other jurisdictions. Newsom’s original proposal was to add $ 30 million that would go specifically for this purpose. But once the state attracts a TV show, it also agrees to subsidize it for the rest of its broadcast. The state has already attracted more TV shows than it has funding to support under the current $ 330 million credit. This “shortfall” prompted the legislature to add $ 75 million per year over two years to fund recurring issues.
It remains to be seen how much of the bill will be a temporary windfall, and how much will become permanent. The basic tax credit of $ 330 million will increase to $ 420 million per year for two years, before dropping back to $ 330 million and then expiring in 2025. In two or three years, stakeholders of Hollywood could come back to Sacramento and argue that the soundstage allowance has been exhausted and needs to be replenished, and that the state cannot afford to cut funding while other states remain competitive.
The best of variety
Sign up for the Variety newsletter. For the latest news, follow us on Facebook, Twitter and Instagram.
[ad_2]
Source link