CALIFORNIA—A bill designed to improve tax credits given to entertainment productions in the state was approved by an Assembly committee on March 25.

AB 1839, also known as the California Film and Television Job Retention and Promotion Act of 2014, was passed unanimously by the Committee on Arts, Entertainment, Sports, Tourism and Internet Media, meaning it now faces the Committee on Revenue and Taxation for further review.

“We can’t sit by and watch a $17 billion a year sector of our economy leave California,” said Assemblyman Mike Gatto in a statement from his office.

The bill, written by Assemblymen Gatto and Raul Bocanegra, makes some substantial changes to a similar bill that was introduced in 2009 that aimed to keep film and television productions from leaving the state, a problem that Los Angeles Supervisor Mike Antonovich says has gotten worse every year.

“In 1997, every big budget film, but one was filmed at least partially, in Los Angeles County,” he said in a public statement. “But in 2013, only two movies with production budgets higher than $100 million were filmed here.”

To minimize this “run-away production,” AB 1839 offers some additional incentives, allocated by a fund controlled by the California Film Commission, to convince production companies from taking their works elsewhere, a feat that 42 states have already been pursuing. Supervisor Antonovich mentioned in his statement some of the examples of other competing states offering tempting tax credits for budding productions, including a 20 percent credit offered byGeorgiaand a 30 percent credit with an additional 5 percent labor tax credit for state residents being employed by the production in Louisiana.

Under the bill, a qualified feature film constitutes one with a minimum production budget of $1 million with no maximum, as opposed to the original requirement of having a production budget between $1 million and $75 million. The catch is that the costs that qualify for the 20 percent tax credit cannot exceed $100 million. A newly introduced bit now allows 25 percent of qualified expenditures related to music scoring and music editing of a qualified film to be written off as well.

In addition, TV series produced in the state, regardless of how they are broadcast, can qualify for the 20 percent credit so long as their minimum budget is $1 million and the runtime is over 40 minutes. Before, only cable TV shows longer than 60 minutes could be eligible. Series that relocate to California get a 25 percent tax credit for their first year of production in the state, but that number goes down to 20 percent for every subsequent year.

Relocating TV series are set aside $30 million of the total $100 million dollar allocation, while independent film productions are reserved either 10 percent of that allocation or $20 million.

The bill analysis of AB 1839 notes that while the bill offers better incentives than before, there are still areas that could use improvement, including the addition of digital visual effects and animation as qualified expenditures and the establishment of “a digital infrastructure investment that is part of the state’s research and development tax credit rather than the filmed production incentive.”

“We cannot afford to let any more jobs abandon our state, and this effort is a rare example of government appropriately taking steps to ensure well-paying jobs stay in California,” said Assemblyman Gatto.

By Alex Nochez