The City Council approved two resolutions Friday intended to demonstrate support for state legislation that, if approved, would modernize California’s Film and Television Tax Credit program.
In a 10-0 vote, council members passed resolutions in favor of AB 1128 and SB 360, which are slated to go before the Legislature later this month. Council members Eunisses Hernandez, Heather Hutt, Nithya Raman, Hugo Soto-Martinez and Katy Yaroslavsky were absent during the vote.
The bills are part of state and local efforts to support the declining film industry, as production has suffered as a result of several challenges.
City Councilman Adrin Nazarian introduced the two resolutions.
The City Council last week approved his motion to “Keep Hollywood Home” by exploring ways to streamline permitting processes for the film industry in L.A. Department staff will report in 30 days with recommendations to adjust city fees, permits, parking and security requirements for shooting on city-owned property and certifying new sound stages.
“Here in L.A., we’re ready to cut the red tape and roll out the red carpet for filming on our streets and city property. We need the state to do its part as well,” Nazarian said in a statement.
Prior to Friday’s vote, the councilman noted the state tax credit has generated $26 billion of economic activity since its inception in 2009, and saved nearly 200,000 jobs.
“The challenge of foreign competition in a global market has grown exponentially,” Nazarian said. “We’re losing jobs, not just to other states, but to other countries.”
These jobs are not just movie stars and studio executives but also blue collar jobs such as carpenters, grips, electricians, camera operators and many others, he added.
“Let’s pass these measures in Sacramento,” Nazarian said. “Let’s enact Gov. Newsom’s expansion of the state tax credit, and let’s pressure Washington D.C. to create a federal tax credit for motion picture production.”
As an assemblyman, Nazarian proposed an expansion of the Film and Television Tax Credit in 2018, though his effort did not pass.
With Southern California’s film industry recovering from the impacts of COVID-19, actors’ and writers’ strikes, and January’s wildfires, industry leaders and elected officials believe expanding the state’s film tax credit program will boost production.
Additionally, other jurisdictions offer incentives that are driving production out of California.
FilmLA, the partner film office for Los Angeles, Los Angeles County and other local jurisdictions, reported in early April that regional activity for on-location filming in the Greater Los Angeles area declined by 22.4% in the first quarter of the year. All major filming categories declined in the first quarter, with commercials coming closest to breaking even.
The organization has also shown support for the two state bills.
Senate Bill 630, introduced by Sen. Ben Allen, D-Santa Monica, seeks to reduce runtime requirements for television shows to become eligible for tax incentives from 40 minutes to 20 minutes. Animation films, series, shorts and large-scale competition shows with a minimum budget of $1 million would be added on the list of eligible projects.
The bill proposes a 35% tax credit for any production that shoots within 30 miles of a so-called Los Angeles zone and other Southern California locations.
Assemblymen Rick Chavez Zbur, D-Hollywood, and Isaac Bryan, D-Los Angeles, introduced AB 1138, which aims to eliminate a “50% ownership or 10-year lease requirement” for productions using a certified sound stage, and instituting more flexibility into the tax incentive program.
Additionally, Gov. Gavin Newsom has proposed expanding the California Film & Television Tax Credit Program to $750 million or more per year.
“Let’s pass AB 1138 and SB 630, and let’s enact Gov. Newsom’s expansion of the state tax credit,” said Nazarian. “In the last 30 years we’ve seen more and more production move out of town, out of state, out of the country, to jurisdictions that offer more generous incentives.”