California legislators recently passed a bill that will have a significant impact on studios and production companies filming in the state. This bill aims to address the flight of productions to other states with more generous tax incentive programs and introduce new regulations to improve set safety. The legislation extends the state’s $330 million incentive program for film and TV production for five more years and makes the tax credits refundable. Previously, only Disney and NBCUniversal could take full advantage of the program due to their tax liabilities in California.
The bill also includes language from a separate bill authored by state senator Dave Cortese, known as SB 735, which was inspired by the tragic shooting on the set of the film “Rust” in 2021. This language seeks to regulate firearms use on film and television sets and introduces a pilot program that assigns dedicated “safety advisors” to productions.
The set safety language in the bill establishes certain safety practices as law, enforced by the Division of Occupational Safety and Health (Cal/OSHA). Crew members handling firearms must now have a state permit, federal documentation for the firearm, and complete designated safety training. Workers handling and working around firearms must also complete safety training. Ammunition will be banned on entertainment sets unless specific conditions are met.
In addition to these regulations, the bill introduces a five-year pilot set safety program. All productions participating in the California Film & TV tax credit program will be required to have a dedicated “safety advisor” on set. The safety advisor will conduct an initial risk assessment for the production and remain present for the duration of the shoot, participating in daily safety meetings. This pilot program will run from July 1, 2025, to June 30, 2030.
Related Post
The bill’s passage has been praised as a compromise that addresses the key issues of set safety supervision, refundability, and diversity. Assemblymember Wendy Carrillo, one of the bill’s authors, believes it will help California remain competitive and put a stop to runaway production. The safety practices introduced by the bill have been described as the nation’s first and best for workers in the motion picture industry. The hope is that these practices will become the standard across the country.
Diversity requirements are also imposed on studios to receive the full tax benefit for shooting in the state. Productions automatically receive 96% of the benefits for participating in the program, with the potential for an additional 2% increase by meeting diversity quotas for both below-the-line and above-the-line crew. Independent films with qualified expenditures below $10 million are exempt from these requirements. The California Film Commission will produce a report on the diversity of crew selected to receive tax credits at the end of each year.
Changing the tax incentives to be refundable was a top priority for studios. Starting in 2025, selected companies will be eligible for a refund equal to the lesser of 18% of the credit or 90% of the portion of the credit exceeding their tax liability. However, those choosing to receive a refund will forfeit a portion of their credit equal to the lesser of 2% of the credit or 10% of the portion exceeding their tax liability.
The bill also increases funding for the Career Pathways Training program, run by IATSE, from 0.25% to 0.5% of productions’ credit allocation.
Industry unions, including the Directors Guild of America and the California IATSE Council, support the bill’s set safety language. Rebecca Rhine, the executive director of the Directors Guild of America’s western branch, expressed hope that these safety practices would become the standard across the country.
While the bill has enjoyed support from major industry unions and trade groups like the Motion Picture Association, not all industry groups are satisfied. The Alliance of Special Effects & Pyrotechnic Operators has publicly opposed the bill.
In conclusion, the passing of this bill has significant implications for studios and production companies in California. The extension and refundability of the incentive program, coupled with stricter set safety regulations and diversity requirements, aim to keep productions in the state and promote a safer and more inclusive industry. The hope is that these changes will not only benefit California’s economy but also serve as a model for the entire country.
