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California Legislature Approves $330 Million Boost to Film Tax Credit

Expansion of production incentives and soundstage construction is expected to be signed by Gov. Newsom

California legislators have passed a bill to significantly boost the state's film and TV tax incentive program, hoping to take advantage of the anticipated surge in entertainment industry projects for streaming services.

The package, which adds $90 million annually to incentives over the next two years and establishes a $150 million fund to construct new soundstage facilities, was passed 37-0 in the state senate and 62-0 in the state assembly. It is expected to be signed by Gov. Gavin Newsom.

“Investing in sound stage construction and the creation of studios and filming locations is a critical addition to our efforts in increasing filming in the Golden State," read a statement from State Sen. Anthony Portantino, who authored the bill. "By investing in the expansion and modernization of studio infrastructure, we can ensure that another generation of entertainment careers will be created in California.”

Productions filmed at soundstages built under the program will be eligible for a 20-25% tax credit, though TV series will not be able to receive more credits for subsequent seasons. A diversity requirement is also being included in the incentive package, as productions must provide a goal plan that will hire cast and crew that is “broadly reflective of California’s population" in order to receive an extra four percentage points in tax credit.

The expansion comes as Sacramento lawmakers figure out how to spend a $75 billion budget windfall, with Gov. Newsom encouraging programs for pandemic rent forgiveness, affordable housing, and other hot button issues as he faces a recall election in September.