SB 144

Bill Subjects

Abstract

(1) The Personal Income Tax Law and the Corporation Tax Law allow various credits against the taxes imposed by those laws, including a motion picture credit for taxable years beginning on or after January 1, 2020, to be allocated by the California Film Commission on or after July 1, 2020, and before July 1, 2025, in an amount equal to 20% or 25% of qualified expenditures for the production of a qualified motion picture in this state, with additional credit amounts allowed, including for amounts equal to specified qualified expenditures and qualified wages relating to original photography outside the Los Angeles zone, as specified. Under existing law, a qualified taxpayer, as defined, is required to provide certain information to the California Film Commission, including the specific start and end dates of production. Existing law does not require an applicant with a production that is an independent film, in filing an application for a motion picture credit with the commission, to provide a summary of the applicant's voluntary programs to increase the representation of minorities and women in specified job classifications. This bill would require a qualified taxpayer to provide additional information, including data regarding the diversity of the applicant's workforce, to be eligible for the motion picture credit. The bill would require an applicant with a production that is an independent film to include, in its application, a summary of the applicant's voluntary programs to increase the representation of minorities and women in specified job classifications. The bill would also require the commission to establish additional verification procedures for updating application information. The bill would require the commission to submit an annual report to the Legislature, beginning January 1, 2022, on aggregate diversity information for the productions allocated motion picture credits and the diversity of the motion picture production industry in California more generally. Existing law limits the aggregate amount of credits that may be allocated under the film credits to $330,000,000, as specified, and sets forth allocation percentages for various productions under the motion picture credit. This bill would increase the aggregate amount of credits that may be allocated for the 2021–22 and 2022–23 fiscal years by $15,000,000, and would make these credits exclusively available to television series that relocate to California, as defined. The bill would also increase the aggregate amount of credits that may be allocated for the 2021–22 and 2022–23 fiscal years by $75,000,000, and would make these credits exclusively available to recurring television series. The bill would require the commission to limit the amount of credits any recurring television series receives in a subsequent season, as specified, and would require the commission to make adjustments, except as provided, to credit allocations if there are certain tax credit shortfalls. This bill, for taxable years beginning on or after January 1, 2022, and before January 1, 2032, would allow a tax credit in an amount equal to 20% or 25%, or as modified, of qualified expenditures for the production of a qualified motion picture in this state at a certified studio construction project. The bill would provide that the credits be allocated by the California Film Commission in the same manner and time period as the existing motion picture credit. The bill would define a "certified studio construction project" for these purposes as a project that provides for the construction or renovation of one or more soundstages located in the state, as specified, and would require a taxpayer seeking certification of a studio construction project to make various certifications to the commission, including that the project is a public work or pays the equivalent of prevailing wages, as provided, and uses a skilled and trained workforce, as provided. The bill would allocate a total of $150,000,000 under this new tax credit, as provided. The bill would prohibit qualified motion pictures from receiving the credit if it receives a credit under the existing motion picture credits provisions, except as specified. By requiring a taxpayer to make specified certifications to the commission, which expands the scope of the crime of perjury, the bill would impose a state-mandated local program. (2) Existing law provides that if any deduction, credit, or exclusion provided in the Personal Income Tax Law or Corporation Tax Law is finally adjudged discriminatory against a national banking association, as described, is finally adjudged invalid, or is discriminatory under the California or United States Constitution, the tax of the favored taxpayer shall be recomputed by the Franchise Tax Board for the taxable year in question, as specified. This bill would state that this provision does not apply to a taxpayer for the invalidation of specified provisions of this bill. (3) Existing law requires, on or before January 1, 2023, the Legislative Analyst's Office (LAO) to provide to certain legislative committees and the public a report evaluating the economic effects and administration of specified tax credits. This bill would change the due date for that report to May 1, 2023, and would require the report to include information relating to the motion picture tax credits. The bill would also require, on or before May 1, 2025, the LAO to provide to those legislative committees and the public certain workforce diversity information relating to those same tax credits. The bill would permit the LAO to request specified information from the California Film Commission and would additionally require the California Department of Tax and Fee Administration to provide information requested by the LAO. (4) The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement. This bill would provide that no reimbursement is required by this act for a specified reason. (5) This bill would include a change in state statute that would result in a taxpayer paying a higher tax within the meaning of Section 3 of Article XIII A of the California Constitution, and thus would require for passage the approval of 23 of the membership of each house of the Legislature. (6) This bill would take effect immediately as a tax levy.