UPDATED, 4 PM: Two months after the California Film Commission board approved new regulations for the state’s film and television tax incentives, Sacramento has signed off. Today, the Office of Administrative Law approved the new regs pretty much as the CFC submitted them back in February.
This approval is in good time for the first application process under the new $330 million credits. With the much criticized lottery system now over, TV applicants can digitally submit their projects for potential incentives based on job creation centric criteria from May 11–17. Features get their first kick at the greatly increased incentives can from July 13-25. For the first time, projects with budgets over $75 million will be eligible for the film credits. The CFC estimates those successful applicants in both the film and TV categories will be informed within two weeks of their submission.
PREVIOUSLY, February 12: Just under five months after Gov. Jerry Brown signed a more than tripling of California’s $100 million Film and TV Tax Credit Program, the form the new $330 million incentives will take today moved one vital step closer to being solidified. With the clock running on the first application dates for the first non-lottery decided application period, the board of the California Film Commission unanimously approved emergency draft regulations for the program. As CFC Director Amy Lemish told the board, these new qualified wages and ranking based regulations are meant to get the new program up and running in to be in sync “with the TV calendar, which was the point of the legislation.” Getting rid of the lottery was an 11th hour addition last summer to the incentives expansion legislation designed to stop runaway production and return Hollywood to the home of Hollywood.
Besides the end of the lottery, the big increase for the program overall, a stable 5-year footing and the inclusion of movies with budgets over $75 million for the first time as well as network TV pilots and series, the most noticeably difference for most is the new job creation criteria that fuels the process.
“For the purposes of the jobs ratio calculation, qualified wages may include: (1) Qualified wages which are directly paid by the applicant or its payroll service; plus (2) thirty-five percent (35%) of all qualified non-wage expenditures, including contracted services in which the qualified wages are not directly paid by the applicant, but by the vendor,” says the new regs unveiled today.
The last of the lottery system applications will occur on April 1 with a big chunk of the money already eaten up by the priority given to renewed TV series that were past recipients of the incentive. May 11 – 17 will see the first application period for TV productions under the new system. Putting in their paperwork online entirely, applicants are expected to know within two weeks if they have received the credits. The Features application period will occur sometime in July, the board was told today.
A presentation from Program Director Nancy Stone this afternoon down at SAG-AFTRA HQ on Wilshire laid out the new rules as well as gave an overview of the now almost 6-year old tax credits program and its support for Golden State filmed pics like American Sniper and Nightcrawler. Afterwards, board chair and Local 399 Secretary-Treasure Steve Dayan put forward a motion asking for a vote on the new regs “substantially in its form.” What that means is the draft rules could change. Those changes could come from the CFC itself or from Sacramento.
The dense drafts regs now go to the Governor’s Office of Business and Economic Development for statutory approval and then to the Office of Administrative Law, which oversees and has the final word on all regulatory changes proposed by state agencies. If all goes as planned, the new regs should get the sign-off in the next couple of weeks – which will give the CFC just enough time to get ready for the first round of applications.