Assembly bills aims to restore California’s movie prowess
By Loralee Stevens, Special to the Business Journal
Assembly Bill 1839, they hope, will undo the steady attrition of the film industry in the state as tax incentives lure movie makers to places like New York, Canada, London and elsewhere.
“The days when movies were shot here in the state are long, long, long gone,” said Michael Meehan, a Napa-based location manager. His work is mainly overseas and increasingly in Louisiana and Georgia, states that have aggressive tax incentive programs in place.
Arnold Schwarzenegger launched an incentive program in California during his term as governor and it was considered very successful until other locations outdid it. This year it’s up for renewal, but not in its original form.
“When production leaves California, the ones taking the hit are middle class and blue collar workers, not the stars and producers,” said Mr. Meehan. Instead, the behind the scenes workers are left jobless, as are the ancillary businesses that serve the production sites and teams, such as the caterers, hotels and set construction companies.
AB 1839 would remove the current credit cap of $75 million, opening the program to blockbuster movies, now almost exclusively filmed outside the state. Television series that cost over $1 million per episode will be eligible rather than those with a total budget of $1 million.
Tax incentives would be equal to 20 percent of total costs. For films produced outside Los Angeles, 25 percent would be covered, with an addition 5 percent for post-production work done in the state.
The enhanced bill also allows visual effect and animation companies to qualify for the tax credit and includes a provision to spur more innovation in digital effects by establishing a digital infrastructure investment credit under the state’s research and development tax credit.
AB 1839, currently sailing through the legislative process almost unopposed and sure to be signed by Governor Brown in late August, won’t bring film crews swarming to the North Bay. Its effects will be mainly felt in Los Angeles, where empty sound stages abound.
Ms. Murray also likes the innovation credit, pointing out that Marin and Sonoma boast “a strong number of creative professionals and both counties’ economic development efforts have targeted increasing that sector.”
In Marin County, 32Ten Studios stands to benefit more directly. The San Rafael offshoot of Industrial Light and Magic expects an uptick in its contract studio business as soon as this year, although the bill wouldn’t go into affect till 2015.
“Films that start production in 2014 will be eligible,” said Sean House, manager of modeling and fabrication and co-owner of 32Ten.
“The Star Wars pictures, originally shot here, are now being filmed in England because of tax incentives,” he said. “Even if California can’t match the money available in England or New York, producers will prefer to work closer to home, shooting on location.”
“We were recently in Louisiana shooting Oblivion, which calls for a black sand beach,” said Mr. Meehan. “Louisiana has plenty of ponds, but no sand, black or otherwise. We found someone who ground up asphalt and used that.”
“It would have been a dream to shoot it on the North Coast of California,” he said.
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