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California legislators on Tuesday passed a bill that drastically alters how studios and production companies are compensated for filming in California and institutes a pioneering set safety pilot program supported by industry unions.
The bill, which will now go to Gov. Gavin Newsom’s desk, extends for five years the state’s $330 million incentive program for film and TV production and makes the tax credits refundable, meaning companies could receive a refund for a portion of their credits that exceed their tax liability. Previously, only Disney and NBCUniversal had tax liabilities in California to take full advantage of the program. It also folds in language from a previously separate bill authored by state senator Dave Cortese — SB 735 — and inspired by the 2021 fatal shooting on the set of Rust that seeks to regulate firearms use on film and television sets and institutes a pilot program introducing dedicated “safety advisors” onto productions.
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The legislation was aimed at curbing the flight of productions from California to other states that have introduced more generous tax incentive programs and addressing concerns of set safety following the fatal shooting in 2021 of cinematographer Halyna Hutchins on the set of Rust in New Mexico.
“It’s a great compromise related to the three main issues of set safety supervision, refundability and diversity,” said Assemblymember Wendy Carrillo, D-Los Angeles, who was one of the authors of the bill. “California needs to remain competitive, and the purpose of why the legislature started this program to begin with was to stop runaway production.”
The bill’s set safety language in part writes some preexisting safety practices on major productions into law, enforced by the Division of Occupational Safety and Health (Cal/OSHA). Crewmembers who handle firearms — like armorers, property masters or assistant property masters — would be required by the bill’s language to have a state permit and federal documentation for a firearm and complete designated safety training. Workers handling and around a firearm would also have to complete safety training, while ammunition would be banned on entertainment sets except under specific prescribed conditions.
But the bill also proposes a new regulation in the form of a five-year pilot set safety program. The program, which would apply to all productions participating in the California Film & TV tax credit program, would require a dedicated “safety advisor” on each set to undertake an initial risk assessment for the production. The safety advisor would then be present for the rest of the production and participate in daily safety meetings. This pilot program would take place between July 1, 2025 and June 30, 2030.
“Conversations about this legislation started the week after the tragic loss of a cinematographer. Those negotiations have produced the nation’s first and best safety practices for California workers in the state’s vital motion picture industry,” Cortese said in a statement Tuesday.
Directors Guild of America western executive director Rebecca Rhine said in her own statement of the safety language in the bill that “while this model starts with the film tax incentive in California, we look forward to the day it becomes the standard across the country.”
Additionally, the legislation imposes diversity requirements on studios to receive the full tax benefit for shooting in the state. Productions will automatically get 96 percent for participating in the program and will become eligible for 2 percent bumps by meeting diversity quotas for below-the-line and above-the-line crew. The requirements will not apply to independent films with qualified expenditures less than $10 million. At the end of the year, the California Film Commission will produce a report on the diversity of crew selected to receive tax credits.
“It’s a reputation check in many ways,” Carrillo said. “There’s commitment from all the studios that they’ll work on diversity. We’ll have the opportunity to see if they fulfilled their own requirements.”
Changing the tax incentives to be refundable, which will start in 2025, was a top priority for studios. Companies selected to participate in the program will receive a refund equal to the lesser of 18 percent of the credit or 90 percent of the portion of the credit exceeding their tax liability. Those that elect to receive such a refund will forfeit a portion of their credit equal to the lesser of 2 percent of the credit or 10 percent of the portion of the credit exceeding their tax liability.
The bill also increases funding for the Career Pathways Training program, which is run by IATSE, from productions that receive tax credits from 0.25 percent of their credit allocation to 0.5 percent.
Supported by industry unions including the Directors Guild of America and the California IATSE Council since Cortese first introduced a separate set safety bill in 2022, this latest set safety language reflects a consensus between top industry unions and trade group the Motion Picture Association. Cortese’s 2022 bill ultimately died due to a lack of agreement between these stakeholders, who came together on a solution this year. (Not all industry groups are happy with this solution, however; the Alliance of Special Effects & Pyrotechnic Operators has been publicly opposed.)
In a statement Tuesday, Motion Picture Association chairman Charles Rivkin said, “With today’s passage of the California Film & Television Tax Credit 4.0 program, the state has ensured that the film, television, and streaming industry will remain a vibrant part of California’s economic landscape for the future.”
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