Monday, August 25, 2014

FILMING ON LOCATION IN CALIFORNIA - SENATE BILL AB 1839

Entertainment
There may be several reasons why movie makers choose California to film their productions, but if Senate Bill AB 1839 passes, they may just have four hundred million more...Dollars that is!

Even though Hollywood has long been considered the home of the film industry, the State of California is currently losing the fight to remain the top contender when it comes to making movies at home. This is due in part to other states and countries offering higher tax credits and more lucrative incentives for productions who choose to film on location there. Filming on location here in California has fallen by about 50% since 1996, and TV Pilot production has fallen 73% since it reached its peak in 2007.

Although it is still pending full Senate approval and the okay from Gov. Jerry Brown, the State Appropriations Committee voted 5-0 on legislation that will increase the amount of funds available to those film makers who choose to film on location in California from a mere $100 million dollars to a whooping $400 million, allowing eligible productions to receive tax credits of up to 25% of specific production related costs, such as crew salaries and set production.

Changes also include getting rid of the current lottery system used by the state to determine which productions are eligible for the tax credits and removal of restrictions that previously disqualified larger productions (those with filming budgets in excess of $75 million dollars) from receiving the credits.

The changes to the existing bill are a result of the failures of the program created in 2009, which was supposed to curb the number of productions being filmed outside of the state.

These tax credits have become an integral part of the film-making process because studios and producers use the credits to offset their annual tax obligations.  Some producers even use the promise of tax credits to secure bank loans for the production and to obtain private investment capital, both which are crucial to the making of a feature film, and it is common practice in the industry to factor these dollars into a production's filming budget.

Many involved in this hot industry topic say they are confident the measure will clear the Senate with ease mainly because the program is designed to help stimulate economic factors, create economic expansion and increase the number of job statewide.