Legislature Passes Senate Bill 144, $330 Million Dollar Investment in Film & TV Production and Soundstages
Sacramento, California – Senate Bill 144, authored by Senator Anthony J. Portantino (D – La Canada Flintridge), passed both houses of the Legislature today. The bill includes $330 million dollars in film and television production tax incentives in the State Budget. The tax credit breakdown falls into two categories: a $180 million increase to the current tax incentive program and $150 million for a new incentive tied to the construction of sound stages.
“California’s successful film tax credits have moved dozens of productions back to where they belong and created thousands of good-paying middle-class jobs,” stated Senator Portantino. “SB 144 creates a dynamic economic development package for California’s important and historic film and television industry. Investing in sound stage construction and the creation of studios and filming locations is a critical addition to our efforts in increasing filming in the Golden State. By investing in the expansion and modernization of studio infrastructure, we can ensure that another generation of entertainment careers will be created in California.”
Since inception, California’s film tax credit programs have generated $17.9 billion in production spending for the state. During the increase in activity, construction of soundstages has not kept pace with the growth in film production, scripted television, and streaming content. In addition, the current program faced a two-year shortfall. Seizing the opportunity to address both issues, Senator Portantino paired up with the State Building and Construction Trades Council to introduce SB 485 earlier in the year. That effort and continuing budget negotiations led to today’s successful passage of SB 144.
“The continuation of the entertainment industry, one of our core industries, is key to California’s economic success,” stated Robbie Hunter, President of the State Building and Construction Trades Council. “The soundstage construction tax credit, led by Senator Portantino, will allow California to remain competitive with other states that are looking to carve up Hollywood as yet another raid on the California economy.”
SB 144 expands the credit allocation available under the Film and Television Tax Credit 3.0, establishes a new credit for qualified motion pictures produced on a certified studio construction project, and increases the credit percentage when specified diversity goals are met. Specifically, the bill increases the aggregate amount of credits that may be allocated for 2021-22 and 2022-23 by $15 million, which would be exclusively available to television series that relocate to California. It also increases the aggregate amount of credits that may be allocated for 2021-22 and 2022-23 by $75 million, exclusively available to recurring television series. These amounts are in excess of the $300 million currently allowed.
Beginning January 1, 2022, and before January 1, 2032, SB 144 also establishes a new credit in an amount equal to 20% or 25% for qualified expenditures for the production of a qualified motion picture in a certified studio construction project. To receive the credit, a taxpayer would be required to construct or renovate one or more soundstages certified by the California Film Commission. A taxpayer may also be eligible for an additional four percentage points of credit if they meet, or make a good-faith effort to meet, their stated diversity goals for above and below the line workers. $150 million is allocated for this new credit.
“Governor Newsom understood that increasing capacity and improving infrastructure will lead to decades of sustained job creation. He joined with the trades and the legislature to make this exciting economic development plan happen. New stages will yield to thousands of jobs, millions of dollars in wages and billions of dollars of economic benefit for California. As someone who came to California after college to work in entertainment, this effort brought a smile to my face,” added Senator Portantino.
In addition to the monetary incentive, SB 144 includes a creative plan to increase diversity within the film and television production workforce. The bill would require a production to submit a diversity workplan, which includes a statement of the diversity goals for workers that are paid qualified wages, and diversity goals for individuals whose wages are excluded from qualified wages. The diversity goals are required to be broadly reflective of California’s population, in terms of race and gender.
SB 144 is part of a three-party budget agreement between the Governor, the State Senate and the State Assembly. Governor Newsom is expected to sign the bill shortly. The measure is co-authored by Assemblymember Autumn Burke, Chair of the Assembly Revenue and Taxation Committee, and Assemblymember Wendy Carrillo. Increasing diversity within the workforce was a key priority for Assemblymember Carrillo and an important provision within the bill.
Senator Portantino represents the 25th State Senate District, which includes the cities of Burbank, Glendale and Pasadena and is home to important film locations and historic studios. He serves as the Chair of the Senate Committee on Appropriations.