SACRAMENTO — Gov. Jerry Brown reached a bipartisan deal with state lawmakers Wednesday on a proposal to expand California’s tax credit for Hollywood film productions, offering $330 million a year in credits to producers through a competitive bidding process.
The tax credit program would be in place for five years.
Los Angeles lawmakers had been pushing to replace the current $100 million annual tax credit, which was set to expire in 2017 and operates on a lottery system that producers say makes it hard to plan.
It comes against a backdrop in which other states and countries are increasingly offering incentives to lure film and TV production. Senate Minority Leader Bob Huff, R-Diamond Bar, said in-state film production has dropped by nearly half during the last 15 years.
“If California is going to get these jobs back, we must compete with other states and nations who are clamoring for that big movie business,” he said in a news release.
The Legislature was expected to take up AB1839 by Democratic Assemblymen Raul Bocanegra and Mike Gatto of Los Angeles on Thursday, as it faces a Sunday deadline to act on bills. The lawmakers had initially sought $400 million a year in credits.
Wednesday’s compromise would rank applicants according to the number of jobs they expect to create and the overall economic impact of the production to California.
Critics of the current tax credit also said it is too restrictive because it allows only smaller-budget productions to apply.
The compromise legislation lifts the cost cap so more expensive films and TV series can be included, although only the first $100 million of those productions would be eligible to receive the credit. That’s to ensure that the entire $330 million doesn’t get eaten up by a handful of blockbuster productions.
The state began offering incentives to eligible film and tax productions in 2009 to counter the efforts of other states. Nationwide, almost half the industry’s jobs are located in Los Angeles County, according to the Legislative Analyst’s Office.
But critics complained that many productions were left out of the current system. This year, the state approved 26 projects for tax credits out of nearly 500 that applied this year.
Those receiving credits include the film version of the HBO series “Entourage” by Warner Bros., “The Gambler” drama by Paramount, and television series such as “Pretty Little Liars” and “Franklin & Bash.”
Once signed into law, the expanded tax credit would take effect in July 2015.