Governor Edmund G. Brown Jr. has signed two California Chamber of Commerce-supported job creator bills.
Just this morning the Governor signed AB 1839 (Gatto; D-Los Angeles), which encourages film and television productions to locate or remain in California by extending and expanding the film and television tax credit
On Wednesday, the Governor signed AB 1560 (Quirk-Silva; D-Fullerton), which ensures California is a competitive environment for employer investment by restoring full funding to the California Competes Tax Credit Program.
Both bills passed the Legislature with overwhelming bipartisan support.
AB 1839: Film/TV Tax Credit
AB 1839 (Gatto; D-Los Angeles) ensures that California remains a competitive environment for the entertainment industry by restructuring and extending the film and television tax credit. It takes effect immediately.
During the first three years of the film and television tax credit program, it supported 23,000 jobs and generated $1.9 billion in total spending. Failure to extend this incentive would create uncertainty for businesses and harm the prospects of employment and production in the entertainment industry at a time when California continues its economic recovery.
As other states continue to provide additional meaningful incentives to attract film and television producers, California should implement policies that ensure economic competitiveness. This targeted capped tax credit will provide the motion picture and television industry with incentives to remain, invest, and create jobs in California. This legislation is consistent with the goals of the CalChamber 2014 Solutions for a Strong California.
California has long been known as the center of the entertainment industry. This industry provides thousands of high-paying middle class jobs and millions of dollars in tax revenue. Additionally, it supports thousands of small businesses that service the industry. Recently, however, the number of film and television productions shot in California has been on the decline due to competition from other states that seek to grab a share of this industry; 44 states currently offer some film and television tax incentive program.
AB 1560: California Competes Tax Credit
An urgency measure, AB 1560 takes effect immediately.
Last year, Governor Edmund G. Brown Jr. signed legislation that created a new tax credit program administered by the Governor’s Office of Business and Economic Development (GO-Biz). This program enables GO-Biz to negotiate agreements and provide economic incentives to employers in exchange for investment and employment expansion in California.
Employers must apply for this program and, before awarding any incentives, GO-Biz evaluates each application based on a number of factors, including the number of jobs created, the amount of wages and benefits provided to employees, the duration of the investment, and the overall size of the investment in the state.
In addition 25% of the funds awarded must be provided to small business.
The program proved to be very successful in its first year—the fund was oversubscribed by $470 million. The awards that were approved by GO-Biz are projected to create nearly 6,000 jobs and generate more than $2 billion in investments.
Unfortunately, recently enacted legislation reduces the amount of funding in future years, weakening a valuable economic tool that has contributed to a more competitive environment in the state.
AB 1560 authorizes the Department of Finance to restore funding to the program and, in doing so, sends a strong message to employers that California favors economic policies that make the state more investment-friendly.
Apply for California Competes Tax Credit
For more information or to apply, visit the GO-Biz website.
GO-Biz will accept applications for the California Competes Tax Credit during the following periods:
- September 29, 2014, through October 27, 2014 ($45 million available);
- January 5, 2015, through February 2, 2015 ($75 million available);
- March 09, 2015, through April 6, 2015 ($31.1 million available plus any unallocated amounts from the previous application periods).
