The Personal Income Tax Law and the Corporation Tax Law allow various credits against the taxes imposed by those laws, including numerous motion picture credits. Most recently, existing law, for taxable years beginning on or after January 1, 2025, allows a 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. Existing law establishes the California Film Commission to administer the motion picture credits, to provide services necessary to increase filming in the state, and to implement specified programs related to the motion picture industry, including a program to promote media production in the state.

This bill, upon appropriation by the Legislature, would require the California Film Commission to integrate additional data collection requirements, as specified, into the existing motion picture tax credit framework. The bill would require the commission, in consultation with industry stakeholders, payroll companies, and subject matter experts, to adopt definitions, reporting templates, and metrics for the additional data collection, and to develop protocols to reduce nonresponse rates. The bill would require the commission to address noncompliance with the data collection requirements through existing enforcement conditions and procedures of the motion picture tax credits, as provided. The bill would additionally require the commission to publish an annual compliance report summarizing the collected data, trends in diversity and economic impact, and recommendations for program improvements.

The Personal Income Tax Law and the Corporation Tax Law allow various credits against the taxes imposed by those laws, including numerous motion picture credits. Most recently, existing law, for taxable years beginning on or after January 1, 2025, allows a 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. Existing law establishes the California Film Commission to administer the motion picture credits, to provide services necessary to increase filming in the state, and to implement specified programs related to the motion picture industry, including a program to promote media production in the state.

This bill, upon appropriation by the Legislature, would require the California Film Commission to integrate additional data collection requirements, as specified, into the existing motion picture tax credit framework. The bill would require the commission, in consultation with industry stakeholders, payroll companies, and subject matter experts, to adopt definitions, reporting templates, and metrics for the additional data collection, and to develop protocols to reduce nonresponse rates. The bill would require the commission to address noncompliance with the data collection requirements through existing enforcement conditions and procedures of the motion picture tax credits, as provided. The bill would additionally require the commission to publish an annual compliance report summarizing the collected data, trends in diversity and economic impact, and recommendations for program improvements.

The Personal Income Tax Law and the Corporation Tax Law allow various credits against the taxes imposed by those laws, including numerous motion picture credits. Most recently, existing law, for taxable years beginning on or after January 1, 2025, allows a 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. Existing law establishes the California Film Commission to administer the motion picture credits, to provide services necessary to increase filming in the state, and to implement specified programs related to the motion picture industry, including a program to promote media production in the state.

This bill, upon appropriation by the Legislature, would require the California Film Commission to establish and implement a comprehensive tracking and compliance program to monitor the economic impact of productions receiving integrate additional data collection requirements, as specified, into the existing motion picture tax credits. The bill would require credit recipients, for taxable years beginning on or after January 1, 2026, to submit detailed compliance reports to the California Film Commission that contain, among other things, demographic data of employees. The bill would also require credit recipients to submit specified information to the commission, except as provided, for the purposes of performing an independent economic impact analysis, conducted every 2 years, that assesses the impact of the credits, including the impact on job creation and retention. The bill would require the commission to impose a monetary penalty on a production that fails to submit the reports or falsifies data. credit framework. The bill would require the commission, in consultation with industry stakeholders, payroll companies, and subject matter experts, to adopt definitions, reporting templates, and metrics for the additional data collection, and to develop protocols to reduce nonresponse rates. The bill would require the commission to address noncompliance with the data collection requirements through existing enforcement conditions and procedures of the motion picture tax credits, as provided. The bill would additionally require the commission to publish an annual compliance report summarizing the collected data, trends in diversity and economic impact, and recommendations for program improvements.

The Personal Income Tax Law and the Corporation Tax Law allow various credits against the taxes imposed by those laws, including numerous motion picture credits. Most recently, existing law, for taxable years beginning on or after January 1, 2025, allows a 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. Existing law establishes the California Film Commission to administer the motion picture credits, to provide services necessary to increase filming in the state, and to implement specified programs related to the motion picture industry, including a program to promote media production in the state.

This bill, upon appropriation by the Legislature, would require the California Film Commission to establish and implement a comprehensive tracking and compliance program to monitor the economic impact of productions receiving motion picture tax credits. The bill would require credit recipients, for taxable years beginning on or after January 1, 2026, to submit detailed compliance reports to the California Film Commission that contain, among other things, demographic data of employees and an employees. The bill would also require credit recipients to submit specified information to the commission, except as provided, for the purposes of performing an independent economic impact analysis, conducted every 2 years, that assesses the impact of the credits, including the impact on job creation and retention. The bill would require the commission to impose a monetary penalty on a production that fails to submit the report reports or falsifies its data.

The Personal Income Tax Law and the Corporation Tax Law allow various credits against the taxes imposed by those laws, including numerous motion picture credits. Most recently, existing law, for taxable years beginning on or after January 1, 2025, allows a 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. Existing law establishes the California Film Commission to administer the motion picture credits, to provide services necessary to increase filming in the state, and to implement specified programs related to the motion picture industry, including a program to promote media production in the state.

The Personal Income Tax Law and the Corporation Tax Law allow various credits against the taxes imposed by those laws, including numerous motion picture credits. Most recently, existing law, for taxable years beginning on or after January 1, 2025, allows a 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.

This bill would correct erroneous cross-references in the above-described motion picture credit provision within the Corporation Tax Law.

 VETO  

Bill No: SB 756

Author: Smallwood-Cuevas (D)

Enrolled: 9/18/25

Vote: 27

SENATE BUS., PROF. & ECON. DEV. COMMITTEE: 10-0, 4/28/25

AYES: Ashby, Archuleta, Arreguín, Grayson, Menjivar, Niello, Smallwood-Cuevas, Strickland, Umberg, Weber Pierson

NO VOTE RECORDED: Choi

SENATE APPROPRIATIONS COMMITTEE: 6-0, 5/23/25

AYES: Caballero, Seyarto, Cabaldon, Grayson, Richardson, Wahab

NO VOTE RECORDED: Dahle

SENATE FLOOR: 37-0, 9/13/25

AYES: Allen, Alvarado-Gil, Archuleta, Arreguín, Ashby, Becker, Blakespear, Cabaldon, Caballero, Cervantes, Cortese, Dahle, Durazo, Grayson, Grove, Hurtado, Jones, Laird, Limón, McGuire, McNerney, Menjivar, Niello, Ochoa Bogh, Padilla, Pérez, Reyes, Richardson, Rubio, Seyarto, Smallwood-Cuevas, Stern, Strickland, Umberg, Wahab, Weber Pierson, Wiener

NO VOTE RECORDED: Choi, Gonzalez, Valladares

ASSEMBLY FLOOR: 78-1, 9/12/25 - See last page for vote

SUBJECT: California Film Commission: motion picture tax credits: tracking and compliance program

SOURCE: Author

DIGEST:

This bill requires the California Film Commission (CFC) to collect additional data from productions receiving motion picture tax credits; to address noncompliance with data collection requirements and; to publish an annual compliance report summarizing the collected data, trends in diversity and economic impact, and recommendations for program improvements.

ANALYSIS:

Existing law:

1. Establishes the Governor’s Office of Business and Economic Development (GO-Biz) for the purpose of serving as the lead state entity for economic strategy and marketing of California on issues relating to business development, private sector investment and economic growth. (Government Code (GC) §§ 12096 – 12098.7)
2. Authorizes GO-Biz as the lead entity for economic strategy and the marketing of California on issues relating to business development, private sector investment, and economic growth. Authorizes GO-Biz, in this capacity, to coordinate the development of policies and criteria to ensure that federal grants administered or directly expended by state government advance statewide economic goals and objectives. Authorizes GO-Biz to market the business and investment opportunities available in California by working in partnership with local, regional, federal, and other state public and private institutions to encourage business development and investment in the state. Authorizes GO-Biz to support small businesses by providing information about accessing capital, complying with regulations, and supporting state initiatives that support small business. (GC § 12096.3)
3. Establishes the Commission, with a board consisting of 27 members, to encourage motion picture and television filming in California and make recommendations to the Legislature, the Governor, and GO-Biz to improve the position of the state’s motion picture industry in the national and world markets. (GC §§ 14998 - 14998.13)
4. Requires the Commission Director to prepare and implement a program to promote media production for the benefit of the state’s economy by administering a one-stop permit office, among other responsibilities. Requires the Commission to develop and oversee the implementation of a Cooperative Motion Picture Marketing Plan which shall increase Commission marketing efforts and offer state resources to local film commissions and local government liaisons to the film industry for the purpose of marketing their locales to the motion picture industry. (GC §§ 14998.and 14998.12).
5. Authorizes the Commission to allocate, and for qualified taxpayers to claim, the California Motion Picture and Television Production Credit (film tax credit) for an additional five years, starting in 2025-26 with an authorization amount of $330 million per year. Provides recipients with 96% of the credit amount and includes an additional 4% if the applicant chooses to submit a diversity workplan that includes specified diversity goals for the project. Requires applicants to submit a diversity workplan checklist, developed by the Commission upon submission of their application for the credit. Upon receipt of a tax credit, applicants who choose to submit a diversity workplan to address diversity and be broadly reflective of California’s population in terms of race, ethnicity, gender, and disability status, including required components in statute and regulation. Applicants may submit an interim assessment on progress towards meeting the goals of the workplan to the Commission. Applicants who submit a diversity workplan must submit a final diversity assessment including information about how the project met or made a good-faith effort to meet the diversity workplan. Requires the Commission to submit to the Legislature on an annual basis, commencing June 30, 2027, a report containing diversity data provided by the applicants. The report shall contain, in the aggregate and per project, an assessment of whether the diversity workplan goals required by this section were met for qualified motion pictures that submitted the final assessment to the Commission in the prior fiscal year and specified details. This reporting is in addition to tax credit specific reporting to the Legislative Analyst’s Office, and other aggregate data reported to the Legislature and on the Commission website.
6. Requires the Legislative Analyst Office (LAO) to provide the Assembly Committee on Revenue and Taxation, the Senate Committee on Governance and Finance, and the public a report evaluating the economic effects and administration of the film tax credit. Authorizes LAO to receive all information reported to the Commission by recipients. Requires the LAO, on or before May 1, 2025, to provide the Assembly Committee on Revenue and Taxation, the Senate Committee on Governance and Finance, and the public a report that summarizes the workforce diversity information collected by the Commission and that evaluates the effectiveness of the film tax credit in increasing the diversity of the film production workforce. (Revenue and Taxation Code (RTC) § 38.9)
7. Establishes the Civil Rights Department (CRD) and outlines various prohibited practices, including but not limited to practices by employers related to discrimination. Requires employers with 100 or more employees to submit a pay data report to the CRD that includes specified information, including but not limited to the number of employees by race, ethnicity, and sex in specified job categories and authorizes CRD to annually publish and publicize aggregate reports based on this data. (GC §§ 12900-12907)
8. Prohibits a private or public employer with five or more employees from including on a job application any questions about conviction history before a conditional job offer has been made. (GC § 13952)
9. Prohibits an employer from asking applicants to disclose information concerning an arrest or detention that did not result in conviction, or information concerning a referral to, and participation in, any pretrial or posttrial diversion program, or concerning a conviction that has been dismissed or ordered sealed, and precludes any employer from seeking or utilizing such information as a factor in determining any condition of employment, any record of arrest or detention that did not result in conviction, or any record regarding a referral to, and participation in, any pretrial or posttrial diversion program, or concerning a conviction that has been judicially dismissed or ordered sealed pursuant to law. (Labor Code § 432.7)

This bill:

1. Requires CFC to integrate additional data collection requirements for productions receiving motion picture tax credits, including:
2. Demographic data currently not required for all hired employees, including veteran status, and where voluntarily provided, LGBTQ+ status.
3. Aggregate ZIP Code hiring data voluntarily reported by motion picture tax credit recipients for the purpose of assessing local workforce impacts.
4. Apprenticeship and trainee utilization reports demonstrating the inclusion of underrepresented groups in film production trades and related industries.
5. Requires CFC, in consultation with industry stakeholders, payroll companies, and subject matter experts, to ensure clarity, feasibility, and practical implementation, to adopt definitions, reporting templates, and narrowly tailored metrics for collecting the additional data outlined in 1) above. Requires CDC to develop data collection protocols to reduce nonresponse rates.
6. Specifies that where feasible, workforce demographic and wage and hours data may be reported in aggregate using certified payroll data or verified third-party payroll reports and requires CFC to work with industry stakeholders and payroll companies to develop standardized templates to ensure data accuracy and to protect employee privacy. Requires CFC, in developing reporting templates and evaluation metrics, to consider proportional representation relative to the California general population and historic national-level underrepresentation in the film and entertainment industries.
7. Requires CFC to address noncompliance with data collection requirements through existing enforcement conditions and motion picture tax credit procedures.
8. Requires CFC to publish an annual compliance report on its website summarizing the collected data, trends in diversity and economic impact, and recommendations for improvements in the motion picture tax credit framework. The report shall be made publicly available on the commission’s website.
9. Makes these requirements operative upon an appropriation by the Legislature.

Background

CFC. The Commission was created in 1984 to “enhance California’s position as the premier location for motion picture production.” The Commission is the state’s resource for film, TV, and commercial production, providing information on production issues such as work permits and on-set safety regulations for those working in the entertainment industry. The Commission supports film, television, and commercial production of all sizes and budgets by providing one‐stop support services including location and troubleshooting assistance, permits for filming at state‐owned facilities, and access to resources including an extensive digital location library. The Commission also administers the state’s Film and Television Tax Credit Program and serves as the primary liaison between the production community and all levels of government (including local, state, and federal jurisdictions) to eliminate barriers to filming in‐state. The Commission works in conjunction with multiple local film offices/commissions across California to resolve film‐related issues and handle specific filming requests.

Film and Television Tax Credits. According to the LAO, in response to the proliferation of state‑level tax credits and other incentives for film and TV production in the early 2000s, the Legislature approved the creation of its own $100 million credit in 2009 (commonly referred to as the "Film and Tax Credit 1.0"). In 2011, the Legislature extended the program for one year to 2014-15 and then extended the program for two additional years until 2016-17. CFC allocated the final $100 million authorized under the Film and TV Credit 1.0 on July 1, 2015. Applications for the credit are evaluated by the Commission, who then allocate and issue credits to successful applicants based on the amount of qualified expenditures the proposed production would make in California.

In 2014, the Legislature enacted the "Film and TV Tax Credit 2.0," which directed the Commission to allocate $230 million in credits in the 2015-16 FY, and $330 million in credits each FY through 2019-20. In 2018, the Legislature enacted the “Film and TV Tax Credit 3.0”, authorizing the Commission to allocate $330 million in credits each FY through 2024-25. The enabling legislation allowed a credit equal to 20% or 25% of qualified expenditures for production of a qualified motion picture in California, with additional credits for qualified expenditures related to original photography, as defined. Additionally, the bill required applicants to submit a summary of their voluntary programs designed to increase the representation of minorities and women in certain job classifications and directed the Commission to establish the Career Pathways Training program, among other provisions.

The 2023‑24 budget included changes to the film tax credit to take effect starting with tax credits awarded in 2025‑26 that include, according to LAO, the following notable changes:

• Refundable Credits. Production companies allocated a tax credit may make a one‑time election to make the credit refundable. This option allows taxpayers who do not have a significant California tax liability to more effectively utilize the credit. Taxpayers must apply as much of their credit to their current tax liability as possible before the excess is refundable for that year. Taxpayers may only elect to make 90% of their total credit allocation refundable, and the use of such credits must be spread across the five taxable years beginning with the year of election.
• Diversity Plans. Currently, credit recipients must submit a work plan that includes explicit diversity goals and is approved by the Commission. Starting with awards made in 2025‑26, a production can receive an additional 4% credit if they submit a work plan to the Commission and the Commission determines that the recipient has made a “good‑faith effort” to achieve the goals in the work plan.

The Commission has issued over $3 billion in credits to around 700 projects since its inception in 2009.

The Governor’s 2025-26 budget proposes to raise the amount of tax credits available for the Commission to allocate to $750 million starting in 2025‑26.

FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: No

According to the Assembly Committee on Appropriations, this bill will result in ongoing General Fund cost pressures of an unknown amount, but likely at least $1 million, for the Legislature to appropriate funding to support GO-Biz implementation of the data collection, compliance oversight, and reporting requirements of the bill placed on the CFC.

SUPPORT: (Verified 10/17/25)

California Arts Advocates

OPPOSITION: (Verified 10/17/25)

None received

ARGUMENTS IN SUPPORT: California Arts Advocates writes that “California’s Film and Television Tax Credit Program has played a key role in retaining in-state film production. Still, it lacks mechanisms to assess whether public dollars benefit diverse communities, advance union access, or contribute to local economies…Notably, the bill ensures…information will be made public and used to shape policy improvements through an annual report from the Film Commission. This builds upon best practices already in place at other public agencies, such as Los Angeles World Airports (LAWA), which require robust labor tracking.” The organization states that the bill “brings transparency to a high-dollar tax incentive program, ensures public investments support inclusive job creation, and provides data to evaluate whether the fi lm credit meets its intended goals. This oversight is especially critical given the Governor’s recent proposal to expand the credit program significantly despite budget deficits and weak evidence of broader economic benefit.”

GOVERNOR'S VETO MESSAGE:

This bill would require the California Film Commission (CFC) to establish new data collection and compliance protocols for the California Film & TV Tax Credit Program.

I share the author's goal of ensuring that California's tax credit program lifts up underrepresented workers and communities. Recent legislation expanded support for productions that hire trainees from the Career Pathways Program, the CFC's workforce development initiative to expand access to film and television careers.

This measure, though well-intentioned, is premature and would impose significant and costly new obligations on the CFC. It proposes a process that requires the CFC to work with outside stakeholders and payroll companies to develop new definitions and standardized reporting templates. In addition, the CFC would need to create protocols to reduce nonresponse rates and collect more detailed demographic data. These requirements would necessitate a major overhaul of the CFC's data collection procedures, which were only recently refined during the rollout of Film Tax Credit 4.0, the current iteration of the program that began in July 2025.

While I am supportive of the author's effort to understand the full economic and community impact of the Film & TV Tax Credit Program, we should allow more time for the recent reforms to be implemented.

For these reasons, I cannot sign this bill.

ASSEMBLY FLOOR: 78-1, 9/12/25

AYES: Addis, Aguiar-Curry, Ahrens, Alanis, Alvarez, Arambula, Ávila Farías, Bains, Bauer-Kahan, Bennett, Berman, Boerner, Bonta, Bryan, Calderon, Caloza, Carrillo, Castillo, Chen, Connolly, Davies, Dixon, Elhawary, Ellis, Flora, Fong, Gabriel, Gallagher, Garcia, Gipson, Jeff Gonzalez, Mark González, Hadwick, Haney, Harabedian, Hart, Hoover, Irwin, Jackson, Johnson, Kalra, Krell, Lackey, Lee, Lowenthal, Macedo, McKinnor, Muratsuchi, Nguyen, Ortega, Pacheco, Papan, Patel, Patterson, Pellerin, Petrie-Norris, Quirk-Silva, Ramos, Ransom, Celeste Rodriguez, Michelle Rodriguez, Rogers, Blanca Rubio, Sanchez, Schiavo, Schultz, Sharp-Collins, Solache, Soria, Stefani, Ta, Tangipa, Valencia, Wallis, Ward, Wicks, Wilson, Rivas

NOES: DeMaio

NO VOTE RECORDED: Zbur

Prepared by: Sarah Mason / B., P. & E.D. /

10/17/25 16:35:20

**** END ****

 UNFINISHED BUSINESS  

Bill No: SB 756

Author: Smallwood-Cuevas (D)

Amended: 9/2/25

Vote: 21

SENATE BUS., PROF. & ECON. DEV. COMMITTEE: 10-0, 4/28/25

AYES: Ashby, Archuleta, Arreguín, Grayson, Menjivar, Niello, Smallwood-Cuevas, Strickland, Umberg, Weber Pierson

NO VOTE RECORDED: Choi

SENATE APPROPRIATIONS COMMITTEE: 6-0, 5/23/25

AYES: Caballero, Seyarto, Cabaldon, Grayson, Richardson, Wahab

NO VOTE RECORDED: Dahle

SENATE FLOOR: 38-0, 6/4/25

AYES: Allen, Alvarado-Gil, Archuleta, Arreguín, Ashby, Becker, Blakespear, Cabaldon, Caballero, Cervantes, Choi, Cortese, Dahle, Durazo, Gonzalez, Grayson, Hurtado, Jones, Laird, Limón, McGuire, McNerney, Menjivar, Niello, Ochoa Bogh, Padilla, Pérez, Richardson, Rubio, Seyarto, Smallwood-Cuevas, Stern, Strickland, Umberg, Valladares, Wahab, Weber Pierson, Wiener

NO VOTE RECORDED: Grove, Reyes

ASSEMBLY FLOOR: 72-1, 9/12/25 – Roll call vote not available

SUBJECT: California Film Commission: motion picture tax credits: tracking and compliance program

SOURCE: Author

DIGEST:

This bill requires the California Film Commission (CFC) to collect additional data from productions receiving motion picture tax credits; to address noncompliance with data collection requirements and; to publish an annual compliance report summarizing the collected data, trends in diversity and economic impact, and recommendations for program improvements.

Assembly Amendments removed one of the data points required to be collected.

ANALYSIS:

Existing law:

1. Establishes the Governor’s Office of Business and Economic Development (GO-Biz) for the purpose of serving as the lead state entity for economic strategy and marketing of California on issues relating to business development, private sector investment and economic growth. (Government Code (GC) §§ 12096 – 12098.7)
2. Authorizes GO-Biz as the lead entity for economic strategy and the marketing of California on issues relating to business development, private sector investment, and economic growth. Authorizes GO-Biz, in this capacity, to coordinate the development of policies and criteria to ensure that federal grants administered or directly expended by state government advance statewide economic goals and objectives. Authorizes GO-Biz to market the business and investment opportunities available in California by working in partnership with local, regional, federal, and other state public and private institutions to encourage business development and investment in the state. Authorizes GO-Biz to support small businesses by providing information about accessing capital, complying with regulations, and supporting state initiatives that support small business. (GC § 12096.3)
3. Establishes the Commission, with a board consisting of 27 members, to encourage motion picture and television filming in California and make recommendations to the Legislature, the Governor, and GO-Biz to improve the position of the state’s motion picture industry in the national and world markets. (GC §§ 14998 - 14998.13)
4. Requires the Commission Director to prepare and implement a program to promote media production for the benefit of the state’s economy by administering a one-stop permit office, among other responsibilities. Requires the Commission to develop and oversee the implementation of a Cooperative Motion Picture Marketing Plan which shall increase Commission marketing efforts and offer state resources to local film commissions and local government liaisons to the film industry for the purpose of marketing their locales to the motion picture industry. (GC §§ 14998.and 14998.12).
5. Authorizes the Commission to allocate, and for qualified taxpayers to claim, the California Motion Picture and Television Production Credit (film tax credit) for an additional five years, starting in 2025-26 with an authorization amount of $330 million per year. Provides recipients with 96% of the credit amount and includes an additional 4% if the applicant chooses to submit a diversity workplan that includes specified diversity goals for the project. Requires applicants to submit a diversity workplan checklist, developed by the Commission upon submission of their application for the credit. Upon receipt of a tax credit, applicants who choose to submit a diversity workplan to address diversity and be broadly reflective of California’s population in terms of race, ethnicity, gender, and disability status, including required components in statute and regulation. Applicants may submit an interim assessment on progress towards meeting the goals of the workplan to the Commission. Applicants who submit a diversity workplan must submit a final diversity assessment including information about how the project met or made a good-faith effort to meet the diversity workplan. Requires the Commission to submit to the Legislature on an annual basis, commencing June 30, 2027, a report containing diversity data provided by the applicants. The report shall contain, in the aggregate and per project, an assessment of whether the diversity workplan goals required by this section were met for qualified motion pictures that submitted the final assessment to the Commission in the prior fiscal year and specified details. This reporting is in addition to tax credit specific reporting to the Legislative Analyst’s Office, and other aggregate data reported to the Legislature and on the Commission website.
6. Requires the Legislative Analyst Office (LAO) to provide the Assembly Committee on Revenue and Taxation, the Senate Committee on Governance and Finance, and the public a report evaluating the economic effects and administration of the film tax credit. Authorizes LAO to receive all information reported to the Commission by recipients. Requires the LAO, on or before May 1, 2025, to provide the Assembly Committee on Revenue and Taxation, the Senate Committee on Governance and Finance, and the public a report that summarizes the workforce diversity information collected by the Commission and that evaluates the effectiveness of the film tax credit in increasing the diversity of the film production workforce. (Revenue and Taxation Code (RTC) § 38.9)
7. Establishes the Civil Rights Department (CRD) and outlines various prohibited practices, including but not limited to practices by employers related to discrimination. Requires employers with 100 or more employees to submit a pay data report to the CRD that includes specified information, including but not limited to the number of employees by race, ethnicity, and sex in specified job categories and authorizes CRD to annually publish and publicize aggregate reports based on this data. (GC §§ 12900-12907)
8. Prohibits a private or public employer with five or more employees from including on a job application any questions about conviction history before a conditional job offer has been made. (GC § 13952)
9. Prohibits an employer from asking applicants to disclose information concerning an arrest or detention that did not result in conviction, or information concerning a referral to, and participation in, any pretrial or posttrial diversion program, or concerning a conviction that has been dismissed or ordered sealed, and precludes any employer from seeking or utilizing such information as a factor in determining any condition of employment, any record of arrest or detention that did not result in conviction, or any record regarding a referral to, and participation in, any pretrial or posttrial diversion program, or concerning a conviction that has been judicially dismissed or ordered sealed pursuant to law. (Labor Code § 432.7)

This bill:

1. Requires CFC to integrate additional data collection requirements for productions receiving motion picture tax credits, including:
2. Demographic data currently not required for all hired employees, including veteran status, and where voluntarily provided, LGBTQ+ status.
3. Aggregate ZIP Code hiring data voluntarily reported by motion picture tax credit recipients for the purpose of assessing local workforce impacts.
4. Apprenticeship and trainee utilization reports demonstrating the inclusion of underrepresented groups in film production trades and related industries.
5. Requires CFC, in consultation with industry stakeholders, payroll companies, and subject matter experts, to ensure clarity, feasibility, and practical implementation, to adopt definitions, reporting templates, and narrowly tailored metrics for collecting the additional data outlined in 1) above. Requires CDC to develop data collection protocols to reduce nonresponse rates.
6. Specifies that where feasible, workforce demographic and wage and hours data may be reported in aggregate using certified payroll data or verified third-party payroll reports and requires CFC to work with industry stakeholders and payroll companies to develop standardized templates to ensure data accuracy and to protect employee privacy. Requires CFC, in developing reporting templates and evaluation metrics, to consider proportional representation relative to the California general population and historic national-level underrepresentation in the film and entertainment industries.
7. Requires CFC to address noncompliance with data collection requirements through existing enforcement conditions and motion picture tax credit procedures.
8. Requires CFC to publish an annual compliance report on its website summarizing the collected data, trends in diversity and economic impact, and recommendations for improvements in the motion picture tax credit framework. The report shall be made publicly available on the commission’s website.
9. Makes these requirements operative upon an appropriation by the Legislature.

Background

CFC. The Commission was created in 1984 to “enhance California’s position as the premier location for motion picture production.” The Commission is the state’s resource for film, TV, and commercial production, providing information on production issues such as work permits and on-set safety regulations for those working in the entertainment industry. The Commission supports film, television, and commercial production of all sizes and budgets by providing one‐stop support services including location and troubleshooting assistance, permits for filming at state‐owned facilities, and access to resources including an extensive digital location library. The Commission also administers the state’s Film and Television Tax Credit Program and serves as the primary liaison between the production community and all levels of government (including local, state, and federal jurisdictions) to eliminate barriers to filming in‐state. The Commission works in conjunction with multiple local film offices/commissions across California to resolve film‐related issues and handle specific filming requests.

Film and Television Tax Credits. According to the LAO, in response to the proliferation of state‑level tax credits and other incentives for film and TV production in the early 2000s, the Legislature approved the creation of its own $100 million credit in 2009 (commonly referred to as the "Film and Tax Credit 1.0"). In 2011, the Legislature extended the program for one year to 2014-15 and then extended the program for two additional years until 2016-17. CFC allocated the final $100 million authorized under the Film and TV Credit 1.0 on July 1, 2015. Applications for the credit are evaluated by the Commission, who then allocate and issue credits to successful applicants based on the amount of qualified expenditures the proposed production would make in California.

In 2014, the Legislature enacted the "Film and TV Tax Credit 2.0," which directed the Commission to allocate $230 million in credits in the 2015-16 FY, and $330 million in credits each FY through 2019-20. In 2018, the Legislature enacted the “Film and TV Tax Credit 3.0”, authorizing the Commission to allocate $330 million in credits each FY through 2024-25. The enabling legislation allowed a credit equal to 20% or 25% of qualified expenditures for production of a qualified motion picture in California, with additional credits for qualified expenditures related to original photography, as defined. Additionally, the bill required applicants to submit a summary of their voluntary programs designed to increase the representation of minorities and women in certain job classifications and directed the Commission to establish the Career Pathways Training program, among other provisions.

The 2023‑24 budget included changes to the film tax credit to take effect starting with tax credits awarded in 2025‑26 that include, according to LAO, the following notable changes:

• Refundable Credits. Production companies allocated a tax credit may make a one‑time election to make the credit refundable. This option allows taxpayers who do not have a significant California tax liability to more effectively utilize the credit. Taxpayers must apply as much of their credit to their current tax liability as possible before the excess is refundable for that year. Taxpayers may only elect to make 90% of their total credit allocation refundable, and the use of such credits must be spread across the five taxable years beginning with the year of election.
• Diversity Plans. Currently, credit recipients must submit a work plan that includes explicit diversity goals and is approved by the Commission. Starting with awards made in 2025‑26, a production can receive an additional 4% credit if they submit a work plan to the Commission and the Commission determines that the recipient has made a “good‑faith effort” to achieve the goals in the work plan.

The Commission has issued over $3 billion in credits to around 700 projects since its inception in 2009.

The Governor’s 2025-26 budget proposes to raise the amount of tax credits available for the Commission to allocate to $750 million starting in 2025‑26.

FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: No

According to the Assembly Committee on Appropriations, this bill will result in ongoing General Fund cost pressures of an unknown amount, but likely at least $1 million, for the Legislature to appropriate funding to support GO-Biz implementation of the data collection, compliance oversight, and reporting requirements of the bill placed on the CFC.

SUPPORT: (Verified 9/12/25)

California Arts Advocates

OPPOSITION: (Verified 9/12/25)

None received

ARGUMENTS IN SUPPORT: California Arts Advocates writes that “California’s Film and Television Tax Credit Program has played a key role in retaining in-state film production. Still, it lacks mechanisms to assess whether public dollars benefit diverse communities, advance union access, or contribute to local economies…Notably, the bill ensures…information will be made public and used to shape policy improvements through an annual report from the Film Commission. This builds upon best practices already in place at other public agencies, such as Los Angeles World Airports (LAWA), which require robust labor tracking.” The organization states that the bill “brings transparency to a high-dollar tax incentive program, ensures public investments support inclusive job creation, and provides data to evaluate whether the fi lm credit meets its intended goals. This oversight is especially critical given the Governor’s recent proposal to expand the credit program significantly despite budget deficits and weak evidence of broader economic benefit.”

Prepared by: Sarah Mason / B., P. & E.D. /

9/12/25 21:34:15

**** END ****

SENATE THIRD READING

STR Bill Id:SB 756

Author:(Smallwood-Cuevas)

As Amended Ver:September 02, 2025

Majority vote

SUMMARY

SB 756 requires the California Film Commission (CFC), subject to an appropriation, to integrate additional data collection requirements into the motion picture tax credit framework, address noncompliance with data collection requirements, and publish an annual compliance report summarizing the collected data, including trends in diversity and economic impact, and recommendations for program improvements.

Major Provisions

1. Requires CFC to integrate additional data collection requirements for productions receiving motion picture tax credits, including:
   1. Demographic data currently not required for all hired employees, including disability status, veteran status, and LGBTQ+ status (where voluntarily provided).
   2. Aggregate ZIP Code hiring data voluntarily reported by motion picture tax credit recipients for the purpose of assessing local workforce impacts.
   3. Apprenticeship and trainee utilization reports demonstrating the inclusion of underrepresented groups in film production trades and related industries.
2. Requires CFC, in consultation with industry stakeholders, payroll companies, and subject matter experts, to ensure clarity, feasibility, and practical implementation, to adopt definitions, reporting templates, and narrowly tailored metrics for collecting the additional data required by this legislation.
3. Requires CDC to develop data collection protocols to reduce nonresponse rates.
4. Specifies that where feasible, workforce demographic and wage and hours data may be reported in aggregate using certified payroll data or verified third-party payroll reports and requires CFC to work with industry stakeholders and payroll companies to develop standardized templates to ensure data accuracy and to protect employee privacy. Requires CFC, in developing reporting templates and evaluation metrics, to consider proportional representation relative to the California general population and historic national-level underrepresentation in the film and entertainment industries.
5. Requires CFC to address noncompliance with data collection requirements through existing enforcement conditions and motion picture tax credit procedures.
6. Requires CFC to publish an annual compliance report on its website summarizing the collected data, trends in diversity and economic impact, and recommendations for improvements in the motion picture tax credit framework. The report shall be made publicly available on the commission's website.

COMMENTS

First available in July of 2009, the California Film and Television Tax Credit program helps promote production spending, jobs, and tax revenues in California. To be eligible for the credit, a project must have a minimum of 75% of its production days or total production budget occur in California, and must be a qualifying motion picture. To date, there have been four different iterations of the program, with the current Program 4.0 enacted by SB 132 (Committee on Budget and Fiscal Review), Chapter 17, Statutes of 2025. SB 132 and AB 1138 (Zbur), Chapter 27, Statutes of 2025, reauthorized the Motion Picture Tax Credit program for $750 million in tax credits to be allocated by the CFC on or after July 1, 2025 and before July 1, 2030, and authorize the state's first refundable credit for business taxpayers.

Other states and countries, such as New York, Georgia, Canada, and the United Kingdom, also offer attractive incentives to the film industry. According to a 2023 report by the CFC detailing results for the last three and a half years of the program through 2023, 39 projects out of 66 that applied for but did not receive tax credits opted for out-of-state production, representing $1.5 billion in production spending loss. This amount does not account for additional losses in jobs and economic activity associated with these projects. Conversely, for the 134 projects approved during the same three and a half year period, the CFC estimates the credit helped generate $7.3 billion in direct in-state spending.

A 2025 report by the Legislative Analyst's Office (LAO) noted that while there is clear evidence increasing the size of the credit will lead to an increase in the number of productions choosing to film in California, there is not sufficient evidence that expanding the tax credit will benefit the economy relative to other economically beneficial programs. One concern cited is a lack of a standardized method of assessing equity outcomes or impacts on workforce development. In response to these concerns, and in support of the bill, the California Arts Advocates state the following:

SB 756 addresses these gaps by requiring production companies receiving film tax credits to submit annual reports detailing:

1. The demographics of their workforce (race, ethnicity, gender, disability status, veteran status)
2. ZIP Code-based hiring to assess local economic impact
3. Participation of apprentices and trainees
4. A final project report and a biennial independent economic impact analysis

Notably, this bill ensures the information will be made public and used to shape policy improvements through an annual report from CFC. This builds upon best practices already in place at other public agencies, such as Los Angeles World Airports (LAWA), which require robust labor tracking.

According to the Author

"SB 756 is about equity and accountability. It ensures that the state's significant investment in the entertainment industry delivers measurable returns for local workers, small businesses, and historically excluded communities. This bill establishes a tracking and compliance program within the CFC to require productions receiving tax credits to report annually on who they hire, where they hire, and how they are building inclusive pathways—such as through apprenticeships and job training—for underrepresented groups. It also mandates a regular independent economic impact analysis, so we can better understand whether this public investment is creating lasting, equitable economic growth."

Arguments in Support

According to the California Arts Advocates in support, "California's Film and Television Tax Credit Program has played a key role in retaining in-state film production. Still, it lacks mechanisms to assess whether public dollars benefit diverse communities, advance union access, or contribute to local economies. As noted by the LAO, although the credit increases production activity, there is little evidence that it improves the broader economy, and there is currently no standardized way to assess equity outcomes or workforce development impacts.

"We support SB 756 because it brings transparency to a high-dollar tax incentive program, ensures public investments support inclusive job creation, and provides data to evaluate whether the film credit meets its intended goals. This oversight is especially critical given the Governor's recent proposal to expand the credit program significantly despite budget deficits and weak evidence of broader economic benefit."

Arguments in Opposition

None on file.

FISCAL COMMENTS

According to the Assembly Committee on Appropriations, there will be ongoing General Fund cost pressures of an unknown amount, but likely at least $1 million, for the Legislature to appropriate funding to support GO-Biz implementation of the data collection, compliance oversight, and reporting requirements of the bill placed on the CFC.

VOTES

SENATE FLOOR: 38-0-2

YES: Allen, Alvarado-Gil, Archuleta, Arreguín, Ashby, Becker, Blakespear, Cabaldon, Caballero, Cervantes, Choi, Cortese, Dahle, Durazo, Gonzalez, Grayson, Hurtado, Jones, Laird, Limón, McGuire, McNerney, Menjivar, Niello, Ochoa Bogh, Padilla, Pérez, Richardson, Rubio, Seyarto, Smallwood-Cuevas, Stern, Strickland, Umberg, Valladares, Wahab, Weber Pierson, Wiener

ABS, ABST OR NV: Grove, Reyes

ASM ARTS, ENTERTAINMENT, SPORTS, AND TOURISM: 8-0-1

YES: Ward, Lackey, Elhawary, Jeff Gonzalez, McKinnor, Ortega, Quirk-Silva, Valencia

ABS, ABST OR NV: Zbur

ASM APPROPRIATIONS: 11-0-4

YES: Wicks, Arambula, Calderon, Caloza, Elhawary, Fong, Mark González, Ahrens, Pacheco, Pellerin, Solache

ABS, ABST OR NV: Sanchez, Dixon, Ta, Tangipa

UPDATED

VERSION: September 02, 2025

CONSULTANT: Brian V. Anderson, Jr. / A.,E.,S., & T. / (916) 319-3450 FN: 0001374

Date of Hearing: August 20, 2025

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Buffy Wicks, Chair

SBPCA Bill Id:SB 756

Author:(Smallwood-Cuevas) – As Amended Ver:May 23, 2025

Urgency: No State Mandated Local Program: No Reimbursable: No

SUMMARY:

This bill requires the California Film Commission, subject to an appropriation, to integrate additional data collection requirements into the motion picture tax credit framework, address noncompliance with data collection requirements, and publish an annual compliance report summarizing the collected data, including trends in diversity and economic impact, and recommendations for program improvements.

FISCAL EFFECT:

Ongoing General Fund cost pressures of an unknown amount, but likely at least $1 million, for the Legislature to appropriate funding to support GO-Biz implementation of the data collection, compliance oversight, and reporting requirements of the bill placed on the California Film Commission.

COMMENTS:

1. Purpose. According to the author:

SB 756 is about equity and accountability. It ensures that the state’s significant investment in the entertainment industry delivers measurable returns for local workers, small businesses, and historically excluded communities. This bill establishes a tracking and compliance program within the California Film Commission to require productions receiving tax credits to report annually on who they hire, where they hire, and how they are building inclusive pathways—such as through apprenticeships and job training—for underrepresented groups. It also mandates a regular independent economic impact analysis, so we can better understand whether this public investment is creating lasting, equitable economic growth.

1. Background. Film Tax Credit. First available in July of 2009, the California Film and Television Tax Credit program helps promote production spending, jobs, and tax revenues in California. To be eligible for the credit, a project must have a minimum of 75% of its production days or total production budget occur in California, and must be a qualifying motion picture. To date, there have been three different iterations of the program, with the most recent, version 4.0, enacted by SB 132 (Committee on Budget and Fiscal Review), Chapter 56, Statutes of 2023, reauthorizing the Motion Picture Tax Credit program for $330 million in tax credits to be allocated by the CFC on or after July 1, 2025 and before July 1, 2030, and authorizing the state's first refundable credit for business taxpayers.

Other states and countries, such as New York, Georgia, Canada, and the United Kingdom, also offer attractive incentives to the film industry. According to a 2023 report by the California Film Commission detailing results for the last three and a half years of the program through 2023, 39 projects out of 66 that applied for but did not receive tax credits opted for out-of-state production, representing $1.5 billion in production spending loss. This amount does not account for additional losses in jobs and economic activity associated with these projects. Conversely, for the 134 projects approved during the same three and a half year period, the commission estimates the credit helped generate $7.3 billion in direct in-state spending.

Concern Regarding Outcomes. A 2025 report by the Legislative Analyst’s Office noted that while there is clear evidence increasing the size of the credit will lead to an increase in the number of productions choosing to film in California, there is not sufficient evidence that expanding the tax credit will benefit the economy relative to other economically beneficial programs. One concern cited is a lack of a standardized method of assessing equity outcomes or impacts on workforce development. In response to these concerns, and in support of the bill, the California Arts Advocates state the following:

SB 756 addresses these gaps by requiring production companies receiving film tax credits to submit annual reports detailing:

• The demographics of their workforce (race, ethnicity, gender, disability status, veteran status)
• ZIP Code-based hiring to assess local economic impact
• Participation of apprentices, trainees, and justice-involved workers
• A final project report and a biennial independent economic impact analysis

Notably, the bill ensures this information will be made public and used to shape policy improvements through an annual report from the Film Commission. This builds upon best practices already in place at other public agencies, such as Los Angeles World Airports (LAWA), which require robust labor tracking.

1. Prior Legislation. SB 132 (Committee on Budget and Fiscal Review), Chapter 17, Statutes of 2025, increases the aggregate amount of the credit that may be allocated for a fiscal year to $750,000,000, effective immediately.

AB 1138 (Zbur), Chapter 27, Statutes of 2025, expands the types of projects eligible for the Motion Picture Tax Credit 4.0 and Soundstage Filming Tax Credit Program, and increases the credit amount percentages allowed for qualified motion pictures.

Analysis Prepared by: Aaron Heredia / APPR. / (916) 319-2081

 THIRD READING  

Bill No: SB 756

Author: Smallwood-Cuevas (D)

Amended: 5/23/25

Vote: 21

SENATE BUS., PROF. & ECON. DEV. COMMITTEE: 10-0, 4/28/25

AYES: Ashby, Archuleta, Arreguín, Grayson, Menjivar, Niello, Smallwood-Cuevas, Strickland, Umberg, Weber Pierson

NO VOTE RECORDED: Choi

SENATE APPROPRIATIONS COMMITTEE: 6-0, 5/23/25

AYES: Caballero, Seyarto, Cabaldon, Grayson, Richardson, Wahab

NO VOTE RECORDED: Dahle

SUBJECT: California Film Commission: motion picture tax credits: tracking and compliance program

SOURCE: Author

DIGEST:

This bill requires the California Film Commission (CFC) to collect additional data from productions receiving motion picture tax credits; to address noncompliance with data collection requirements and; to publish an annual compliance report summarizing the collected data, trends in diversity and economic impact, and recommendations for program improvements.

ANALYSIS:

Existing law:

1. Establishes the Governor’s Office of Business and Economic Development (GO-Biz) for the purpose of serving as the lead state entity for economic strategy and marketing of California on issues relating to business development, private sector investment and economic growth. (Government Code (GC) §§ 12096 – 12098.7)
2. Authorizes GO-Biz as the lead entity for economic strategy and the marketing of California on issues relating to business development, private sector investment, and economic growth. Authorizes GO-Biz, in this capacity, to coordinate the development of policies and criteria to ensure that federal grants administered or directly expended by state government advance statewide economic goals and objectives. Authorizes GO-Biz to market the business and investment opportunities available in California by working in partnership with local, regional, federal, and other state public and private institutions to encourage business development and investment in the state. Authorizes GO-Biz to support small businesses by providing information about accessing capital, complying with regulations, and supporting state initiatives that support small business. (GC § 12096.3)
3. Establishes the Commission, with a board consisting of 27 members, to encourage motion picture and television filming in California and make recommendations to the Legislature, the Governor, and GO-Biz to improve the position of the state’s motion picture industry in the national and world markets. (GC §§ 14998 - 14998.13)
4. Requires the Commission Director to prepare and implement a program to promote media production for the benefit of the state’s economy by administering a one-stop permit office, among other responsibilities. Requires the Commission to develop and oversee the implementation of a Cooperative Motion Picture Marketing Plan which shall increase Commission marketing efforts and offer state resources to local film commissions and local government liaisons to the film industry for the purpose of marketing their locales to the motion picture industry. (GC §§ 14998.and 14998.12).
5. Authorizes the Commission to allocate, and for qualified taxpayers to claim, the California Motion Picture and Television Production Credit (film tax credit) for an additional five years, starting in 2025-26 with an authorization amount of $330 million per year. Provides recipients with 96% of the credit amount and includes an additional 4% if the applicant chooses to submit a diversity workplan that includes specified diversity goals for the project. Requires applicants to submit a diversity workplan checklist, developed by the Commission upon submission of their application for the credit. Upon receipt of a tax credit, applicants who choose to submit a diversity workplan to address diversity and be broadly reflective of California’s population in terms of race, ethnicity, gender, and disability status, including required components in statute and regulation. Applicants may submit an interim assessment on progress towards meeting the goals of the workplan to the Commission. Applicants who submit a diversity workplan must submit a final diversity assessment including information about how the project met or made a good-faith effort to meet the diversity workplan. Requires the Commission to submit to the Legislature on an annual basis, commencing June 30, 2027, a report containing diversity data provided by the applicants. The report shall contain, in the aggregate and per project, an assessment of whether the diversity workplan goals required by this section were met for qualified motion pictures that submitted the final assessment to the Commission in the prior fiscal year and specified details. This reporting is in addition to tax credit specific reporting to the Legislative Analyst’s Office, and other aggregate data reported to the Legislature and on the Commission website.
6. Requires the Legislative Analyst Office (LAO) to provide the Assembly Committee on Revenue and Taxation, the Senate Committee on Governance and Finance, and the public a report evaluating the economic effects and administration of the film tax credit. Authorizes LAO to receive all information reported to the Commission by recipients. Requires the LAO, on or before May 1, 2025, to provide the Assembly Committee on Revenue and Taxation, the Senate Committee on Governance and Finance, and the public a report that summarizes the workforce diversity information collected by the Commission and that evaluates the effectiveness of the film tax credit in increasing the diversity of the film production workforce. (Revenue and Taxation Code (RTC) § 38.9)
7. Establishes the Civil Rights Department (CRD) and outlines various prohibited practices, including but not limited to practices by employers related to discrimination. Requires employers with 100 or more employees to submit a pay data report to the CRD that includes specified information, including but not limited to the number of employees by race, ethnicity, and sex in specified job categories and authorizes CRD to annually publish and publicize aggregate reports based on this data. (GC §§ 12900-12907)
8. Prohibits a private or public employer with five or more employees from including on a job application any questions about conviction history before a conditional job offer has been made. (GC § 13952)
9. Prohibits an employer from asking applicants to disclose information concerning an arrest or detention that did not result in conviction, or information concerning a referral to, and participation in, any pretrial or posttrial diversion program, or concerning a conviction that has been dismissed or ordered sealed, and precludes any employer from seeking or utilizing such information as a factor in determining any condition of employment, any record of arrest or detention that did not result in conviction, or any record regarding a referral to, and participation in, any pretrial or posttrial diversion program, or concerning a conviction that has been judicially dismissed or ordered sealed pursuant to law. (Labor Code § 432.7)

This bill:

1. Requires CFC to integrate additional data collection requirements for productions receiving motion picture tax credits, including:
2. Demographic data currently not required for all hired employees, including veteran status, and where voluntarily provided, LGBTQ+ status.
3. Aggregate ZIP Code hiring data voluntarily reported by motion picture tax credit recipients for the purpose of assessing local workforce impacts.
4. Apprenticeship and trainee utilization reports demonstrating the inclusion of underrepresented groups in film production trades and related industries.
5. Data regarding the participation of individuals with prior interactions with the criminal justice system, commonly known as justice-involved individuals, in apprenticeship and trainee programs utilized by productions receiving motion picture tax credits. This requirement does not require employers to inquire about or collect criminal record history or prior convictions directly from employees or job applicants.
6. Requires CFC, in consultation with industry stakeholders, payroll companies, and subject matter experts, to ensure clarity, feasibility, and practical implementation, to adopt definitions, reporting templates, and narrowly tailored metrics for collecting the additional data outlined in 1) above. Requires CDC to develop data collection protocols to reduce nonresponse rates.
7. Specifies that where feasible, workforce demographic and wage and hours data may be reported in aggregate using certified payroll data or verified third-party payroll reports and requires CFC to work with industry stakeholders and payroll companies to develop standardized templates to ensure data accuracy and to protect employee privacy. Requires CFC, in developing reporting templates and evaluation metrics, to consider proportional representation relative to the California general population and historic national-level underrepresentation in the film and entertainment industries.
8. Requires CFC to address noncompliance with data collection requirements through existing enforcement conditions and motion picture tax credit procedures.
9. Requires CFC to publish an annual compliance report on its website summarizing the collected data, trends in diversity and economic impact, and recommendations for improvements in the motion picture tax credit framework. The report shall be made publicly available on the commission’s website.
10. Makes these requirements operative upon an appropriation by the Legislature.

Background

CFC. The Commission was created in 1984 to “enhance California’s position as the premier location for motion picture production.” The Commission is the state’s resource for film, TV, and commercial production, providing information on production issues such as work permits and on-set safety regulations for those working in the entertainment industry. The Commission supports film, television, and commercial production of all sizes and budgets by providing one‐stop support services including location and troubleshooting assistance, permits for filming at state‐owned facilities, and access to resources including an extensive digital location library. The Commission also administers the state’s Film and Television Tax Credit Program and serves as the primary liaison between the production community and all levels of government (including local, state, and federal jurisdictions) to eliminate barriers to filming in‐state. The Commission works in conjunction with multiple local film offices/commissions across California to resolve film‐related issues and handle specific filming requests.

Film and Television Tax Credits. According to the LAO, in response to the proliferation of state‑level tax credits and other incentives for film and TV production in the early 2000s, the Legislature approved the creation of its own $100 million credit in 2009 (commonly referred to as the "Film and Tax Credit 1.0"). In 2011, the Legislature extended the program for one year to 2014-15 and then extended the program for two additional years until 2016-17. CFC allocated the final $100 million authorized under the Film and TV Credit 1.0 on July 1, 2015. Applications for the credit are evaluated by the Commission, who then allocate and issue credits to successful applicants based on the amount of qualified expenditures the proposed production would make in California.

In 2014, the Legislature enacted the "Film and TV Tax Credit 2.0," which directed the Commission to allocate $230 million in credits in the 2015-16 FY, and $330 million in credits each FY through 2019-20. In 2018, the Legislature enacted the “Film and TV Tax Credit 3.0”, authorizing the Commission to allocate $330 million in credits each FY through 2024-25. The enabling legislation allowed a credit equal to 20% or 25% of qualified expenditures for production of a qualified motion picture in California, with additional credits for qualified expenditures related to original photography, as defined. Additionally, the bill required applicants to submit a summary of their voluntary programs designed to increase the representation of minorities and women in certain job classifications and directed the Commission to establish the Career Pathways Training program, among other provisions.

The 2023‑24 budget included changes to the film tax credit to take effect starting with tax credits awarded in 2025‑26 that include, according to LAO, the following notable changes:

• Refundable Credits. Production companies allocated a tax credit may make a one‑time election to make the credit refundable. This option allows taxpayers who do not have a significant California tax liability to more effectively utilize the credit. Taxpayers must apply as much of their credit to their current tax liability as possible before the excess is refundable for that year. Taxpayers may only elect to make 90% of their total credit allocation refundable, and the use of such credits must be spread across the five taxable years beginning with the year of election.
• Diversity Plans. Currently, credit recipients must submit a work plan that includes explicit diversity goals and is approved by the Commission. Starting with awards made in 2025‑26, a production can receive an additional 4% credit if they submit a work plan to the Commission and the Commission determines that the recipient has made a “good‑faith effort” to achieve the goals in the work plan.

The Commission has issued over $3 billion in credits to around 700 projects since its inception in 2009.

The Governor’s 2025-26 budget proposes to raise the amount of tax credits available for the Commission to allocate to $750 million starting in 2025‑26.

FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: No

According to the Senate Committee on Appropriations, GO-Biz would likely incur, at a minimum, an annual cost pressure of $1 million in General Fund monies to implement the provisions of the bill.

SUPPORT: (Verified 5/23/25)

California Arts Advocates

OPPOSITION: (Verified 5/23/25)

None received

ARGUMENTS IN SUPPORT: California Arts Advocates writes that “California’s Film and Television Tax Credit Program has played a key role in retaining in-state film production. Still, it lacks mechanisms to assess whether public dollars benefit diverse communities, advance union access, or contribute to local economies…Notably, the bill ensures…information will be made public and used to shape policy improvements through an annual report from the Film Commission. This builds upon best practices already in place at other public agencies, such as Los Angeles World Airports (LAWA), which require robust labor tracking.” The organization states that the bill “brings transparency to a high-dollar tax incentive program, ensures public investments support inclusive job creation, and provides data to evaluate whether the fi lm credit meets its intended goals. This oversight is especially critical given the Governor’s recent proposal to expand the credit program significantly despite budget deficits and weak evidence of broader economic benefit.”

Prepared by: Sarah Mason / B., P. & E.D. /

5/27/25 14:22:35

**** END ****

SENATE COMMITTEE ON

Senator Anna Caballero, Chair

2025 - 2026 Regular Session

SB 756 (Smallwood-Cuevas) - California Film Commission: motion picture tax credits: tracking and compliance program

Bill Summary:

SB 756, upon an appropriation by the Legislature, would (1) require the California Film Commission (CFC) to establish and implement a compliance program to monitor the economic impact of productions receiving motion picture tax credits, and (2) require motion picture tax credit recipients to submit detailed compliance reports to CFC.

*********** ANALYSIS ADDENDUM – SUSPENSE FILE ***********

The following information is revised to reflect amendments

adopted by the committee on May 23, 2025

Fiscal Impact:

• The Governor’s Office of Business and Economic Development (GO-Biz) would likely incur, at a minimum, an annual cost pressure of $1 million to implement the provisions of the bill. (General Fund).

Author Amendments:

• Clarify that employers are not required to ask their employees of their criminal record history, but the bill will continue to acquire data regarding justice-involved individuals who have utilized the various apprentice and trainee programs in the film trades and related industries.
• Prevent duplicative reporting and expand definitions of populated data collected.
• Require CFC to address noncompliance with data collection requirements through existing enforcement conditions and procedures, as specified.
• Require CFC to publish an annual compliance report summarizing its collected data, as specified.

-- END --

SENATE COMMITTEE ON APPROPRIATIONS

Senator Anna Caballero, Chair

2025 - 2026 Regular Session

SB 756 (Smallwood-Cuevas) - California Film Commission: motion picture tax credits: tracking and compliance program

Bill Summary:

SB 756, upon an appropriation by the Legislature, would (1) require the California Film Commission (CFC) to establish and implement a compliance program to monitor the economic impact of productions receiving motion picture tax credits, and (2) require motion picture tax credit recipients to submit detailed compliance reports to CFC.

Fiscal Impact:

• The Governor’s Office of Business and Economic Development (GO-Biz) indicates that CFC would incur, at a minimum, an annual cost pressure of $1.1 million to $1.4 million to implement the provisions of the bill. (General Fund, see Staff Comments).
• This bill could result in an increase in annual penalty revenue to the State. The magnitude is unknown.

Background:

The State has had various economic development departments through the decades. Prior to 2003, the majority of the State’s economic development programs were housed within the Technology, Trade, and Commerce Agency. The 2003 04 Budget Act abolished both the Agency and state funding for many of its programs designed to encourage economic development.

GO Biz was established statutorily in 2011 to be the lead entity for economic strategy and the marketing of California on issues relating to business development, private sector investment, and economic growth. GO-Biz staff provide a wide range of advisory and coordinating roles across the administration related to economic development. Several units of GO Biz serve as points of contact for businesses considering relocating to or expanding in California. For example, CalOSBA provides resources for small businesses and financial assistance for small business advisory centers. Other units assist international investors, help businesses obtain information about business permits, administer the California Competes Tax Credit Program, and administer the Cannabis Local Equity Grant Program. Additionally, the California Film Commission, Travel and Tourism Commission, and the Infrastructure and Economic Development Bank have been assigned for oversight purposes to GO Biz.

CFC was created in 1984 to “enhance California’s position as the premier location for motion picture production.” CFC is the State’s resource for film, TV, and commercial production, providing information on production issues such as work permits and on-set safety regulations for those working in the entertainment industry. The Commission supports film, television, and commercial production of all sizes and budgets by providing one‐stop support services including location and troubleshooting assistance, permits for filming at state‐owned facilities, and access to resources including an extensive digital location library. CFC also administers the state’s Film and Television Tax Credit Program and serves as the primary liaison between the production community and all levels of government (including local, state, and federal jurisdictions) to eliminate barriers to filming in‐state. The Commission works in conjunction with multiple local film offices/commissions across California to resolve film‐related issues and handle specific filming requests.

In response to the proliferation of state-level tax credits and other incentives for film and TV production in the early 2000s, the Legislature approved the creation of its own credit in 2009. As noted above, applications for the credit are evaluated by CFC, who then allocate and issue credits to successful applicants based on the amount of qualified expenditures the proposed production would make in California. The amount of credits available annually under the program has grown from $100 million in 2009 to $330 million as of 2015. The credit can be used to defray corporation, personal income, or sales tax liabilities.

Proposed Law:

This bill, upon an appropriation by the Legislature, would among other things would do the following:

• Require CFC to establish and implement a comprehensive tracking and compliance program to monitor the economic impact of productions receiving motion picture tax credits.
• Require motion picture tax credit recipients to submit detailed compliance reports to CFC that include, but are not limited to (1) demographic data for all hired employees, including race, ethnicity, gender, disability status, and veteran status, (2) geographic data for employees' primary residences by ZIP Code to assess local hiring impacts, (3) apprenticeship and trainee utilization reports demonstrating the inclusion of underrepresented groups in film production trades and related industries, and (4) data for all hired employees relating to prior interactions with the criminal justice system.
• Require motion picture tax credit recipients to submit a final project report that includes information necessary for CFC to conduct an independent economic impact analysis that assesses (1) job creation and retention resulting from the credits, (2) state and local revenue impacts, (3) growth in production-related industries, and (4) disparities in employment or wages among diverse workforce segments.
• Require CFC, to the extent feasible, to contract with an academic institution located in California to conduct the specified analysis. If no academic institution is available or willing to partner, CFC may instead contract with an independent third-party research organization based in the State. An analysis would be required biennially.
• Require CFC to impose a monetary penalty, in an amount determined by the severity of noncompliance, on a production that fails to submit a report as specified, or that falsifies data.
• Require CFC to publish, as specified, an annual compliance report on its internet site summarizing the collected data, trends in diversity and economic impact, and recommendations for program improvements.

Related Legislation:

SB 630 (Allen) would (1) increase the annual authorization amount under Film and Television Production Tax Credit from $330 million to $750 million, and (2) make specified changes to the credit’s provisions, including those to its soundstage program. The bill is currently pending in this Committee.

Staff Comments:

GO-Biz notes that, given the related requirements in the reauthorization of Program 4.0, CFC received additional resources in 2023-24 to fund three positions to support the anticipated 100+ projects that will likely be submitting individual workplans, interim assessments, and final reports.

According to CFC, however, even with these additional positions provided last year, it could not perform this bill’s required workload using existing resources. Specifically, it would need to engage an academic institution or third-party auditor year-round given that each project will need additional support to ensure accurate data capture to achieve the requirements of this bill. CFC estimates this annual contracting would cost $800,000 to $1 million annually. Additionally, CFC would need two new positions to support data tracking and compliance, at an annual cost of $338,000 to $416,000 per year. If the Governor’s proposal to increase the annual film tax credit from $330 million to $750 million is enacted, CFC indicates that these administrative costs would likely increase by up to 50 percent.

Finally, CFC notes that the bill could result in additional legal costs. The magnitude is unknown, but potentially significant.

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SENATE COMMITTEE ON

BUSINESS, PROFESSIONS AND ECONOMIC DEVELOPMENT

Senator Angelique Ashby, Chair

2025 - 2026 Regular

Bill No: SB 756 Hearing Date: April 28, 2025

Subject: California Film Commission: motion picture tax credits: tracking and compliance program

SUMMARY:

Requires the California Film Commission (Commission or CFC) to establish and implement a compliance program to monitor the economic impact of productions receiving motion picture tax credits and requires motion picture tax credit recipients to submit detailed compliance reports to the Commission that include specified information.

Existing law:

1. Establishes the Governor’s Office of Business and Economic Development (GO-Biz) for the purpose of serving as the lead state entity for economic strategy and marketing of California on issues relating to business development, private sector investment and economic growth. (Government Code (GC) §§ 12096 – 12098.7)
2. Authorizes GO-Biz as the lead entity for economic strategy and the marketing of California on issues relating to business development, private sector investment, and economic growth. Authorizes GO-Biz, in this capacity, to coordinate the development of policies and criteria to ensure that federal grants administered or directly expended by state government advance statewide economic goals and objectives. Authorizes GO-Biz to market the business and investment opportunities available in California by working in partnership with local, regional, federal, and other state public and private institutions to encourage business development and investment in the state. Authorizes GO-Biz to support small businesses by providing information about accessing capital, complying with regulations, and supporting state initiatives that support small business. (GC § 12096.3)
3. Establishes the Commission, with a board consisting of 27 members, to encourage motion picture and television filming in California and make recommendations to the Legislature, the Governor, and GO-Biz to improve the position of the state’s motion picture industry in the national and world markets. (GC §§ 14998 - 14998.13)
4. Requires the Commission Director to prepare and implement a program to promote media production for the benefit of the state’s economy by administering a one-stop permit office, among other responsibilities. Requires the Commission to develop and oversee the implementation of a Cooperative Motion Picture Marketing Plan which shall increase Commission marketing efforts and offer state resources to local film commissions and local government liaisons to the film industry for the purpose of marketing their locales to the motion picture industry.(GC §§ 14998.and 14998.12).
5. Authorizes the Commission to allocate, and for qualified taxpayers to claim, the California Motion Picture and Television Production Credit (film tax credit) for an additional five years, starting in 2025-26 with an authorization amount of $330 million per year. Provides recipients with 96 percent of the credit amount and includes an additional four percent if the applicant chooses to submit a diversity workplan that includes specified diversity goals for the project. Requires applicants to submit a diversity workplan checklist, developed by the Commission upon submission of their application for the credit. Upon receipt of a tax credit, applicants who choose to submit a diversity workplan to address diversity and be broadly reflective of California’s population in terms of race, ethnicity, gender, and disability status, including required components in statute and regulation. Applicants may submit an interim assessment on progress towards meeting the goals of the workplan to the Commission. Applicants who submit a diversity workplan must submit a final diversity assessment including information about how the project met or made a good-faith effort to meet the diversity workplan. Requires the Commission to submit to the Legislature on an annual basis, commencing June 30, 2027, a report containing diversity data provided by the applicants. The report shall contain, in the aggregate and per project, an assessment of whether the diversity workplan goals required by this section were met for qualified motion pictures that submitted the final assessment to the Commission in the prior fiscal year and specified details. This reporting is in addition to tax credit specific reporting to the Legislative Analyst’s Office, and other aggregate data reported to the Legislature and on the Commission website.
6. Requires the Legislative Analyst Office (LAO) to provide the Assembly Committee on Revenue and Taxation, the Senate Committee on Governance and Finance, and the public a report evaluating the economic effects and administration of the film tax credit. Authorizes LAO to receive all information reported to the Commission by recipients. Requires the LAO, on or before May 1, 2025, to provide the Assembly Committee on Revenue and Taxation, the Senate Committee on Governance and Finance, and the public a report that summarizes the workforce diversity information collected by the Commission and that evaluates the effectiveness of the film tax credit in increasing the diversity of the film production workforce. (Revenue and Taxation Code (RTC) § 38.9)
7. Establishes the Civil Rights Department (CRD) and outlines various prohibited practices, including but not limited to practices by employers related to discrimination. Requires employers with 100 or more employees to submit a pay data report to the CRD that includes specified information, including but not limited to the number of employees by race, ethnicity, and sex in specified job categories and authorizes CRD to annually publish and publicize aggregate reports based on this data. (GC §§ 12900-12907)
8. Prohibits a private or public employer with five or more employees from including on a job application any questions about conviction history before a conditional job offer has been made. (GC § 13952)
9. Prohibits an employer from asking applicants to disclose information concerning an arrest or detention that did not result in conviction, or information concerning a referral to, and participation in, any pretrial or posttrial diversion program, or concerning a conviction that has been dismissed or ordered sealed, and precludes any employer from seeking or utilizing such information as a factor in determining any condition of employment, any record of arrest or detention that did not result in conviction, or any record regarding a referral to, and participation in, any pretrial or posttrial diversion program, or concerning a conviction that has been judicially dismissed or ordered sealed pursuant to law. (Labor Code § 432.7)

This bill:

1. Requires CFC to establish and implement a comprehensive tracking and compliance program to monitor the economic impact of productions receiving motion picture tax credits.
2. Requires motion picture tax credit recipients to submit detailed compliance reports to CFC that include, but are not limited to:
3. Demographic data for all hired employees, including race, ethnicity, gender, disability status, and veteran status.
4. Geographic data for employees’ primary residences by ZIP Code to assess local hiring impacts.
5. Apprenticeship and trainee utilization reports demonstrating the inclusion of underrepresented groups in film production trades and related industries.
6. Data for all hired employees relating to prior interactions with the criminal justice system.
7. Requires motion picture tax credit recipients to submit a final project report that includes information necessary for CFC to conduct an independent economic impact analysis that assesses:
8. Job creation and retention resulting from the credits.
9. State and local revenue impacts.
10. Growth in production-related industries.
11. Disparities in employment or wages among diverse workforce segments.
12. Requires CFC, to the extent feasible, to contract with an academic institution located in California to conduct the analysis in 3) above. If no academic institution is available or willing to partner, CFC may instead contract with an independent third-party research organization based in the state. Requires an analysis every two years.
13. Requires CFC to impose a monetary penalty, in an amount determined by the severity of noncompliance, on a production that fails to submit a report in 2) above or that falsifies data.
14. Requires CFC to publish an annual compliance report on its website summarizing the collected data, trends in diversity and economic impact, and recommendations for program improvements. The report shall be made publicly available on the commission’s website.
15. Makes these requirements operative upon an appropriation by the Legislature.

FISCAL EFFECT:

Unknown. This bill is keyed fiscal by Legislative Counsel.

COMMENTS:

1. Purpose. The Author is the Sponsor of this bill. According to the Author, “California’s motion picture tax credit is a powerful tool for keeping film and television production—and the jobs that come with it—right here in our state. As the Senator for the 28th District, which includes some of the most active and iconic hubs of film production in the world, I see firsthand how this industry shapes our regional economy. But I also see the disparities—working people from the very communities where films are shot are often left out of the opportunity pipeline.

SB 756 is about equity and accountability. It ensures that the state’s significant investment in the entertainment industry delivers measurable returns for local workers, small businesses, and historically excluded communities. This bill establishes a tracking and compliance program within the California Film Commission to require productions receiving tax credits to report annually on who they hire, where they hire, and how they are building inclusive pathways—such as through apprenticeships and job training—for underrepresented groups. It also mandates a regular independent economic impact analysis, so we can better understand whether this public investment is creating lasting, equitable economic growth.

In a district where film production is a major economic driver, we must ensure that the benefits are shared more broadly. SB 756 brings transparency to how tax credits are used and ensures that taxpayer dollars help build a stronger, fairer entertainment workforce across California.”

The Author notes that “Existing law provides substantial tax incentives to film and television productions in California through the state’s motion picture tax credit program. While the California Film Commission collects limited reporting from credit recipients, there is no comprehensive, standardized mechanism to track who benefits from these public subsidies—particularly when it comes to workforce demographics, local hiring, or inclusion of underrepresented groups in the film industry. This lack of transparency makes it difficult for the Legislature and the public to evaluate whether the state’s investment is delivering on its promise of equitable economic growth.

Additionally, current law does not require regular or independent economic analyses to assess the broader impact of the program on job creation, regional economies, or industry diversification. Without meaningful accountability and data, California risks missing opportunities to ensure these credits are creating inclusive, high-quality jobs and supporting pathways into the industry for historically marginalized communities.

SB 756 addresses these gaps by requiring detailed annual compliance reports from tax credit recipients and mandating independent economic impact analyses every two years. By enhancing oversight and requiring public reporting on diversity and economic outcomes, the bill ensures that California’s film tax credit program lives up to its economic and equity goals. This is especially important in communities like those in the 28th Senate District, which hosts a high volume of film production but where many residents remain excluded from the jobs and opportunities the industry generates.”

1. Background.

CFC. The Commission was created in 1984 to “enhance California’s position as the premier location for motion picture production.” The Commission is the state’s resource for film, TV, and commercial production, providing information on production issues such as work permits and on-set safety regulations for those working in the entertainment industry. The Commission supports film, television, and commercial production of all sizes and budgets by providing one‐stop support services including location and troubleshooting assistance, permits for filming at state‐owned facilities, and access to resources including an extensive digital location library. The Commission also administers the state’s Film and Television Tax Credit Program and serves as the primary liaison between the production community and all levels of government (including local, state, and federal jurisdictions) to eliminate barriers to filming in‐state. The Commission works in conjunction with multiple local film offices/commissions across California to resolve film‐related issues and handle specific filming requests.

Film and Television Tax Credits. According to the LAO, in response to the proliferation of state‑level tax credits and other incentives for film and TV production in the early 2000s, the Legislature approved the creation of its own $100 million credit in 2009 (commonly referred to as the "Film and Tax Credit 1.0"). In 2011, the Legislature extended the program for one year to 2014-15 and then extended the program for two additional years until 2016-17. CFC allocated the final $100 million authorized under the Film and TV Credit 1.0 on July 1, 2015. Applications for the credit are evaluated by the Commission, who then allocate and issue credits to successful applicants based on the amount of qualified expenditures the proposed production would make in California.

In 2014, the Legislature enacted the "Film and TV Tax Credit 2.0," which directed the Commission to allocate $230 million in credits in the 2015-16 FY, and $330 million in credits each FY through 2019-20. In 2018, the Legislature enacted the “Film and TV Tax Credit 3.0”, authorizing the Commission to allocate $330 million in credits each FY through 2024-25. The enabling legislation allowed a credit equal to 20% or 25% of qualified expenditures for production of a qualified motion picture in California, with additional credits for qualified expenditures related to original photography, as defined. Additionally, the bill required applicants to submit a summary of their voluntary programs designed to increase the representation of minorities and women in certain job classifications and directed the Commission to establish the Career Pathways Training program, among other provisions.

The 2023‑24 budget included changes to the film tax credit to take effect starting with tax credits awarded in 2025‑26 that include, according to LAO, the following notable changes:

• Refundable Credits. Production companies allocated a tax credit may make a one‑time election to make the credit refundable. This option allows taxpayers who do not have a significant California tax liability to more effectively utilize the credit. Taxpayers must apply as much of their credit to their current tax liability as possible before the excess is refundable for that year. Taxpayers may only elect to make 90 percent of their total credit allocation refundable, and the use of such credits must be spread across the five taxable years beginning with the year of election.
• Diversity Plans. Currently, credit recipients must submit a work plan that includes explicit diversity goals and is approved by the Commission. Starting with awards made in 2025‑26, a production can receive an additional 4 percent credit if they submit a work plan to the Commission and the Commission determines that the recipient has made a “good‑faith effort” to achieve the goals in the work plan.

The Commission has issued over $3 billion in credits to around 700 projects since its inception in 2009.

The Governor’s 2025-26 budget proposes to raise the amount of tax credits available for the Commission to allocate to $750 million starting in 2025‑26.

1. Arguments in Support. California Arts Advocates writes that “California’s Film and Television Tax Credit Program has played a key role in retaining in-state film production. Still, it lacks mechanisms to assess whether public dollars benefit diverse communities, advance union access, or contribute to local economies…

Notably, the bill ensures…information will be made public and used to shape policy improvements through an annual report from the Film Commission. This builds upon best practices already in place at other public agencies, such as Los Angeles World Airports (LAWA), which require robust labor tracking.” The organization states that the bill “brings transparency to a high-dollar tax incentive program, ensures public investments support inclusive job creation, and provides data to evaluate whether the fi lm credit meets its intended goals. This oversight is especially critical given the Governor’s recent proposal to expand the credit program significantly despite budget deficits and weak evidence of broader economic benefit.”

1. Policy Issues: Creation of a separate compliance program, duplication of existing efforts, challenges capturing particular data, and implementation concerns.

The Commission already has a Film and Television Tax Credit Program, which among myriad other duties, receives information from tax credit recipients and is then required to report specified information to the Legislature based on that information. This bill creates another program at the Commission to collect information from tax credit recipients, analyze the information, and provide a report based on the data collected. It is unclear why a separate compliance program is necessary when the Commission is already tasked with ensuring tax credit recipient compliance with multiple provisions and conditions.

Similarly, the Commission is already capturing and reporting the information that this bill tasks a new program with capturing and reporting. For example, tax credit recipients must submit a work plan that includes explicit diversity goals that is approved by the Commission. Requiring tax credit recipients to report demographic data, including race, ethnicity, gender, disability status, and veteran status as this bill mandates could yield similar information as the diversity plans applicants and recipients are already providing. The Commission is already subject to annual reporting requirements that take effect in coming years to outline diversity data provided by the film tax credit applicants. Is potentially duplicative reporting necessary?

The bill also requires an economic impact analysis of the film tax credit that the new program within the Commission would be required to conduct. The LAO is already required to provide a report evaluating the economic effects and administration of the film tax credit, as well as a report that summarizes the workforce diversity information collected by the Commission and that evaluates the effectiveness of the film tax credit in increasing the diversity of the film production workforce. The required metrics for analysis include significantly broad terms that may be difficult to capture without more specificity and clear definitions. For example, “state and local revenue impacts” is one item the new Commission tracking and compliance program would have to analyze, but it is unclear whose revenue would be evaluated and under what circumstances. The bill also references “growth in production-related industries”, a very wide net for what information needs to be provided, potentially resulting in an inability for tax credit recipients to appropriately report what the Author intends to be reported in order to conduct an economic analysis.

Tax credit recipients would also be required to report “geographic data for employees’ primary residences by ZIP Code…” to the new Commission program this bill establishes. Continuously tracking primary residences in a workplace as fluid as the film industry and for projects that may require frequent relocation raises not only privacy concerns for project employees but may be difficult for recipients to effectively and properly capture in order to comply with the requirements in this bill. And noncompliance with the reporting requirements of this bill result in a “monetary penalty”, a new task for GO-Biz and the Commission that lacks clarity, specificity, and does not appear to be based on any similar citation and fine authority, with notable procedures and due process, that other agencies with enforcement authority must abide by.

SUPPORT AND OPPOSITION:

Support:

California Arts Advocates

Opposition:

None received

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