The window for the California Film Commission's incentive program opened Friday morning and applications began flooding in early in the day, officials said. By Friday evening, applicants will receive an email notice whether they've been granted a conditional tax credit or been waitlisted. But those that don't get the credit on the first try shouldn't despair, Amy Lemisch, executive director of the California Film Commission, told Back Stage.
"We do clear a lot of projects off the waitlist throughout the year," she said, "because projects fall out or don't spend as much as they thought."
A tax credit of 20 percent is available for films budgeted at $1 to $75 million, movies of the week or miniseries with at least a $500,000 budget, and new cable TV series licensed for original distribution. Some of the credits may be transferred or sold to another party, but credits applied to income tax liability aren't refundable.
The process of doling out the $100 million in credits began as lawmakers in Sacramento are still waiting to take action on legislation granting a five-year extension to the program.
A coalition of interest groups that includes the Directors Guild of America, SAG-AFTRA, the movie studios, state film commissions, and labor unions are all advocating for the measure.
With lawmakers embroiled in budgetary concerns, though, it appears a vote on the extension won’t happen until later this summer. One source familiar with the process called it a "moving target," but another said it should happen in July, or possibly early August.
There are two extension bills running on parallel tracks in the state Legislature. State Sen. Ron Calderon (D) is pushing the bill in the upper chamber while Assemblymember Felipe Fuentes (D) has similar legislation going through the Assembly. Both pieces of legislation are still in committee.
Fuentes' bill, known as A.B. 2026, is expected to come up for a vote in the Appropriations Committee at the end of June and then go to a vote in the full Assembly. Calderon's bill, known as S.B. 1167, is slated for a vote in the Governance and Finance Committee on June 13, according to his office.
But it's not guaranteed to pass and move on to a full vote in the state Senate, which last year rejected a similar proposal in favor of a one-year extension of the program. As one legislative hand put it: "The game's in the Senate." Still, others believe that Fuentes' bill has a better chance of clearing the Assembly and arriving in the upper chamber with momentum, which could help its passage. Either way, it seems inevitable the debate over the extension will be tied into the broader discussion about the grim budget picture.
Meanwhile, California is facing increased competition from other locations eager to lure TV and film productions away. New York City, for instance, recently added five new sound stages and is anticipating construction will soon start on its first outdoor sound stage.
New York State also offers $420 million annually in film tax credits. That makes California's program look "modest," Lemisch admitted. "We don't have as much funding as other places and our demand is greater.”
But with the political climate in Sacramento, where lawmakers are grappling with dramatic spending cuts, adding funding to the tax credit program is a non-starter. Opponents of the program call it a giveaway to studios already planning to film in California.
The best that the industry can hope for, according to observers, is the five-year extension. That would be enormously helpful, according to Lemisch. "The industry really needs the continuity that the program is going to be around to do production planning."
She noted the program has provided funding to films including "Drive," "Bridesmaids," "The Social Network," and the FX series "Justified," to name a few.
Location decisions often come down to money, added Lemisch. "Ninety-nine percent of the time [producers] say, 'We would prefer to shoot here but it's a financial decision.’ And that's why they wait to see if they get the credit" before deciding if the production will remain in California.
