On Location: State Assembly votes to give film tax credit program five more years

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The state Assembly approved a bill that would extend California’s film and television tax credit program for five more years, a move that was widely welcomed by labor unions and film promoters.

The bill would provide an additional $500 million in funding for the film tax credit program, which expires in fiscal year 2014. The measure now moves to the state Senate, where a vote is expected later this summer.

It’s not clear, however, whether Gov. Jerry Brown, who has proposed steep cuts in state spending to balance California’s budget, will support the measure.

Launched in 2009 in an effort to curb the flight of movies and TV shows such as ABC’s ‘Ugly Betty’ to other states, California’s incentive gives filmmakers a tax credit equivalent to 20% to 25% of qualified production expenses. The credit can be applied to whatever income or business tax liability the production company has with the state and, in some cases, sold to a third party.

To date, the state has allocated $300 million in credits and this week is set to allocate an additional $100 million for the upcoming fiscal year, which begins July 1.

While the program has been criticized by some in the industry for being too restrictive -- it excludes movies with budgets exceeding $75 million and commercial shoots, for example -- it has been widely supported by unions and film industry officials in Los Angeles for helping to slow so-called runaway production.

In addition to Canada and other foreign rivals, California faces competition from more than 40 U.S. states that offer tax credits and rebates to filmmakers.

‘What we’re doing with this bill is retaining and creating jobs by leveling the playing field and making California competitive again,’’ said Assemblyman Felipe Fuentes (D-Sylmar), who sponsored the bill, approved by a 72-1 vote.

Officials with FilmL.A. Inc., the nonprofit film permit group, credited the state tax credit program for driving an increase of on-location shoots for feature films in Los Angeles last year.

State officials say the program has resulted in $2.2 billion in direct production spending, including $728 million in wages for an estimated 25,700 below-the-line crew members and 6,100 cast members.

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-- Richard Verrier