Assembly votes to extend film production tax break

[June 02, 2011]  SACRAMENTO, Calif. (AP) -- The state Assembly voted Tuesday to extend incentives for California's entertainment industry for five more years, approving up to $500 million in additional tax credits to help keep movie-making jobs in the state.

The California Film and Television Tax Credit Program enacted in 2009 has already helped keep some $2.2 billion in film and television production and 25,000 crew jobs in California, said Assemblyman Felipe Fuentes, a Sylmar Democrat, arguing for the extension.

The Assembly voted 72-1 to extend the program from 2014 to July 2019. The bill goes next to the state Senate.

Supporters said other states and nations have been stepping up their incentives to lure away film and television work.

California lost production jobs for years until the credit took effect, said Assemblyman Anthony Portantino, D-La Canada Flintridge, and it was carefully crafted for economic benefit to the state.

"You had to create the job here to get the credit," he said.

Democrats and Republicans both backed AB 1069 as a way to preserve California jobs, though some GOP lawmakers said other industries needed the help as much as Hollywood.

Only Assemblyman Chris Norby voted against the bill, saying the tax credits tilted the level playing field of business competition.

"This is about picking and choosing economic winners and losers," Norby said. "If you want to support Hollywood, go see a movie. I haven't seen one in a long time."

Los Angeles area legislators had pushed for a production tax credit for years without success until then-Gov. Arnold Schwarzenegger got behind the idea in 2008. His backing was pegged to a decision by the producers of the ABC Studios television series "Ugly Betty" to move production from Los Angeles to New York, costing about two-thirds of the 150 crew members their jobs on the $3 million-per-episode show.

New York had offered the producers a 35 percent tax credit.

California's credit, against income or sales taxes or both, is not quite that rich. It covers up to 25 percent of production budgets spent in the state and applies to films with production budgets of up to $75 million, TV movies, miniseries and certain series. It sets aside at least $10 million of credits for independent films from the $100 million available each year.

The California credit took effect in 2009, when the recession and tax credits elsewhere helped cut on-location filming days on the streets of Los Angeles by 19 percent from the previous year, according to FilmLA, a nonprofit that tracks city film permits. The decline would have been even larger without the tax credit, which helped keep 10 feature films in town, the group said.

Producers taking advantage of the state perk helped increase movie and TV commercial production in Los Angeles by 15 percent in 2010, the first full calendar year the tax credit was in effect. The group reported that permits showed 43,646 production days in 2010, up from 37,979 in 2009.

[Associated Press; By ADAM WEINTRAUB]

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