SB 132: Income taxes: tax credits: motion pictures: occupational safety: California Film Commission.

(1)Existing law grants the Division of Occupational Safety and Health, which is within the Department of Industrial Relations, jurisdiction over all employment and places of employment, with the power necessary to enforce and administer all occupational health and safety laws and standards. The Occupational Safety and Health Standards Board, an independent entity within the department, has the exclusive authority to adopt occupational safety and health standards within the state. Existing law, the California Occupational Safety and Health Act of 1973, requires employers to comply with certain standards ensuring healthy and safe working conditions, as specified, and charges the division with enforcement of the act. Other existing law relating to occupational safety imposes special provisions on certain industries and charges the division with enforcement of these provisions.

This bill would establish the Safety on Productions Pilot Program. The bill, commencing July 1, 2025, and until June 30, 2030, inclusive, would require that an employer for a motion picture production that receives a specified motion picture tax credit, for that motion picture production, hire or assign a qualified safety advisor for California filming activities to perform a risk assessment and, if required under the bill, a specific risk assessment, as specified. The bill would require a dedicated safety advisor to be present on every motion picture production in the pilot program who is assigned exclusively to that motion picture production. The bill would require assessments to be accessible to specified affected persons and safety advisor access to locations and relevant facilities and items to ensure safety. The bill would require production to conduct a daily safety meeting, including, but not limited to, a safety meeting required when firearms are involved in a scene. The bill would require a safety advisor to participate in daily safety meetings, as specified. The bill would require an employer to identify a person for performers, crew, labor organization representatives, and the division to contact for issues regarding compliance. The bill would require the safety advisor to prepare a final safety evaluation report based on the actual risk and compliance experience. The bill would require the safety advisor, within 60 days following completion of filming activities, to provide the final safety evaluation report to the Industry-Wide Labor-Management Safety Committee and the California Film Commission. The bill would require the committee and the California Film Commission to jointly select an organization or firm to perform a written evaluation of the pilot program. The bill would require the selected organization or firm to review and assess the final safety evaluation reports on or before June 30, 2029, and make a nonbinding set of recommendations to the Legislature, as prescribed. These pilot program provisions would be repealed as of January 1, 2031.

This bill would allow the use of a firearm or blank on motion picture productions only for specified purposes and under specified safety conditions. The bill would require a qualified property master, armorer, or assistant property master handling a firearm in the course of the motion picture production to have a specified state permit, to have completed certain training in firearms, and to have a specified federal document for the possession and custody of the firearm. The bill would specifically impose prescribed reporting requirements on employers engaged in motion picture production. The bill would specifically authorize the division to investigate, inspect, and cite employers, as prescribed.

This bill would prohibit ammunition on a motion picture production, except in prescribed circumstances, subject to certain safety rules and laws. The bill would require an employer to require that any employee responsible for handling, or in proximity to, firearms on set completes a specific firearm training or equivalent training, as prescribed. The bill would require an employer to comply with the bill and any applicable safety standard. The bill would establish exemptions from its provisions for specified registered security guards and peace officers when they are on the perimeter of a set where motion picture production is happening.

This bill would require the division to enforce these provisions. The bill would define terms for these purposes. These provisions of the bill would become operative on January 1, 2025.

(2)Existing law, the Motion Picture, Television, and Commercial Industries Act of 1984, establishes within the Governors Office of Business and Economic Development (GO-Biz), the California Film Commission consisting of 26 members, with 13 members appointed by the Governor, as provided.

This bill would increase the number of members of the California Film Commission to 27, and would require that the Governor appoint 14 of those members. The bill would also require that, in addition to existing member requirements, one of the members of the California Film Commission appointed by the Governor be a diversity, equity, and inclusion expert employed in the motion picture industry.

(3)The Personal Income Tax Law and the Corporation Tax Law allow various credits against the taxes imposed by those laws, including a motion picture credit for taxable years beginning on or after January 1, 2020, to be allocated by the California Film Commission on or after July 1, 2020, and before July 1, 2025, in an amount equal to 20% or 25% of qualified expenditures for the production of a qualified motion picture in this state, with additional credit amounts allowed, including for amounts equal to specified qualified expenditures and qualified wages relating to original photography outside the Los Angeles zone, as specified.

Existing law also allows a credit for taxable years beginning on or after January 1, 2022, and before January 1, 2032, in an amount equal to 20% or 25%, or as modified, of qualified expenditures paid or incurred during the taxable year by a qualified motion picture produced in this state at a certified studio construction project. Existing law defines a qualified motion picture for these purposes in the same manner as the motion picture credit and additionally requires that the qualified motion picture provide a diversity workplan that is approved by the commission and be certified as a certified studio construction project by the commission within 3 years of claiming the credit. Existing law requires a diversity workplan to include certain goals the motion picture will seek to achieve in terms in relation to race, ethnicity, and gender of employees and contractors. Existing law requires the qualified motion picture to pay or incur at least $7,500,000 in qualified wages during the taxable year for filming on soundstages certified as a certified studio construction project.

This bill would instead require a certified studio construction project to be certified by the commission for a period of 5 years. This bill would require the qualified motion picture to pay or incur at least $5,000,000 in qualified wages, and would remove the requirement that it be during the taxable year. This bill would also require a diversity workplan, in addition to existing requirements, to include information relating to goals the motion picture will seek to achieve in terms of disability status.

Existing law limits the aggregate amount of credits that may be allocated under the certified studio construction project credit to $150,000,000, as specified, and limits the allocation for a season of a series or a feature film to $12,000,000.

This bill would limit the amount that may be allocated to any qualified motion picture to $12,000,000, or $750,000 per episode for a season of a television series.

(4)Existing law prohibits a qualified motion picture from receiving both the motion picture credit and the certified studio construction project credit during the same fiscal year, unless the applicant is a recurring television series that is no longer eligible for the certified studio construction project credit, as specified.

This bill would instead authorize a qualified motion picture that satisfies the criteria of the certified studio construction project credit but does not receive a certified studio construction project credit for specified reasons to apply for a motion picture credit. The bill would require a recurring television series that satisfies the criteria of the certified studio construction project credit but is no longer eligible for a certified studio construction project credit to receive a motion picture credit allocation, as provided. The bill would authorize a qualified motion picture to apply for, and would require a recurring television series to receive, a credit allocation from any successor motion picture tax credit program. This bill would define a recurring television series for these purposes as any television series that was previously approved and issued a credit allocation letter.

(5)Existing law, with respect to the motion picture credit allowed under the Corporation Tax Law, authorizes a qualified taxpayer, in the case where the motion picture credit exceeds the taxpayers tax liability, to elect to assign any portion of the credit to one or more affiliated corporations for each taxable year in which the credit is allowed. Existing law defines an affiliated corporation for these purposes as a corporation that is related to a corporation required to file under the Corporation Tax Law because of specified conditions, including that more than 50% of its voting stock is owned directly or indirectly by a corporation also required to file.

This bill would instead define an affiliated corporation for these purposes as a corporation that is a member of a commonly controlled group, as defined.

(6)This bill would provide that the provisions referenced in paragraphs (3) to (5), inclusive, would be operative for taxable years beginning on or after January 1, 2023, except as provided.

(7)This bill, for taxable years beginning on or after January 1, 2025, would allow a new motion picture credit (motion picture credit 4.0) to be allocated by the California Film Commission on or after July 1, 2025, and before July 1, 2030, in an amount equal to 20% or 25% of qualified expenditures for the production of a qualified motion picture in this state, and would require the credit to be administered in accordance with the existing motion picture credit, except as specified.

This bill would allow a qualified taxpayer to submit a diversity workplan, as defined, and would require the California Film Commission to reduce the monetary value of the motion picture credit 4.0 allocation by 4% if a qualified taxpayer chooses not to submit a diversity workplan or if the California Film Commission determines that the qualified taxpayer has not met or made a good-faith effort to meet the diversity goals in its diversity workplan.

Existing law establishes the continuously appropriated Tax Relief and Refund Account and provides that payments required to be made to taxpayers or other persons from the Personal Income Tax Fund are to be paid from that account.

This bill would allow a qualified taxpayer to elect to be paid a refund if the amount allowable as a credit under the motion picture credit 4.0 exceeds the qualified taxpayers tax liability for the taxable year, and would allow the excess to be carried over, as specified. By requiring moneys to be paid from the Tax Relief and Refund Account, the bill would make an appropriation.

(8)The Personal Income Tax Law and the Corporation Tax Law require credits allowed against the taxes imposed by those laws to be applied in a specified order. Those laws also describe a tentative minimum tax, and prohibit a tax credit from reducing the tax owed by a taxpayer below the tentative minimum tax, except as provided.

This bill, for taxable years beginning on or after January 1, 2020, would allow the motion picture credit and the certified studio construction project credit to reduce the amount owed by a taxpayer below the tentative minimum tax. The bill, for taxable years beginning on or after January 1, 2025, would also allow the motion picture credit 4.0 to reduce the amount owed by a taxpayer below the tentative minimum tax.

(9)Existing law requires any bill authorizing a new tax expenditure, as defined, to contain, among other things, specific goals, purposes, and objectives that the tax expenditure will achieve, detailed performance indicators, and data collection requirements.

This bill would include findings and reporting requirements in compliance with this requirement.

(10)This bill would also make findings and declarations related to a gift of public funds.

(11)This bill would include a change in state statute that would result in a taxpayer paying a higher tax within the meaning of Section 3 of Article XIIIA of the California Constitution, and thus would require for passage the approval of ²/₃ of the membership of each house of the Legislature.

(12)This bill would state that its provisions are severable.

(13)This bill would declare that it is to take effect immediately as a bill providing for appropriations related to the Budget Bill.