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Could California's film tax credit get a new script?

Vlasta Juricek/flickr Creative Commons

The suspense has been building this week in the plot to expand California's Film and Television Production tax credit program.  

The bill has made its way through the California Assembly and is awaiting consideration by one last committee in the Senate - Appropriations - before going to the full Senate floor for a vote. AB 1839 was originally on the committee's crowded agenda for this past Monday, but was pushed back until next Monday.

Then came word that Senator Kevin de León (D-Los Angeles) had serious concerns about the bill.  Since he's the Chairman of the Senate Appropriations committee, those concerns commanded focus in Sacramento, reported Deadline Hollywood on Tuesday. 

“His conclusion is that the existing credit has too many weaknesses to be substantially expanded this year. At least not in the range the advocates are currently pushing,” said Dan Reeves, Chief of Staff to Senator de León, according to Deadline.  

By Wednesday, however, the Senator was reassuring everyone that he's "100 percent committed" to extending and expanding the tax credit, as Variety and the Los Angeles Times reported.  De León  released a statement saying that he "would work with my colleagues and stakeholders across the spectrum to make a good program even better." 

California's tax credit program currently uses a $100 million annual pot to offer tax credits to qualifying films and television shows that shoot in the state.  The bill to expand the program has widespread support, so the drama hasn't been around whether it will pass the legislature, but how much extra money lawmakers would agree to add to the pot. 

That dollar figure has remained a mystery and is likely to do so until next week.  Deadline Hollywood appears to have picked up a few clues. One source tells Dominic Patten that "between $300 and $400 million looks pretty certain to be submitted in an amendment next week.”  Another says “in discussions, the figure hasn’t really ever dropped below $400 million for the legislation.” 

Meanwhile, back in Hollywood, Paul Audley, president of FilmLA, offered another set of data points Wednesday to show how much production is running away to state's that offer more generous tax credits.  FilmLA coordinates and processes permits for on-location shoots and uses its data to track production in the city. 

Audley moderated a panel discusstion at Variety's TV Summit in Century City. In conjunction with the panel, FilmLA released a study showing that the number of television drama series shooting in California has declined by 34 percent in the last seven years.  In 2007, there were 73 different television drama series shooting in California, said the report, and this year, there were 48. 

If Senator de León is determined to make the tax credit "better," Joe Henchman has at least one suggestion: extract more guarantees from the industry benefitting from the tax credit.   Henchman is a California native who now works in Washington for the Tax Foundation.  He opposes the tax credit program, but writes in a blog post that if California's going with it, the state should get more out of it.

"Other tax credit programs require recipients to meet specified job and production numbers or else they don’t get the tax subsidy. Why should this be different?," writes Henchman. "To lure back productions that have proven to be disloyal to California, more is needed than giving them more money and hoping for the best."