In a key move to revive California’s flagging production economy, the State Senate on Tuesday passed a bill that would significantly expand eligibility and boost benefits under the state’s long-standing film and television tax credit program.

Senate Bill 630, co-authored by a cohort of Los Angeles-area lawmakers, including Assemblymember Rick Chavez Zbur and State Senator Ben Allen, sailed through the Senate with a 34-1 vote. The legislation now heads to the Assembly, which is expected to hold a floor vote on its companion bill — Assembly Bill 1138 — this Thursday.

Together branded the California Film and Television Jobs Act, the package aims to widen the scope of projects that qualify for tax incentives while sweetening the credit for in-state productions, particularly those shot in Los Angeles and nearby production zones. The goal: stem the outflow of jobs and content to other states and lure more big-budget projects back to the Golden State.

What’s in the Bill

Among the proposed changes: half-hour live-action series and animated television programs with budgets of at least $1 million per episode would become newly eligible for tax credits. The legislation also proposes an increase in the base credit rate from 20% to 35% of qualified spend for productions shot within L.A. County and select surrounding jurisdictions — an aggressive move aimed at reenergizing Hollywood’s home base amid rising costs and a tight labor market.

The push comes as California faces pressure to keep pace with rival jurisdictions. New York recently raised its annual film tax credit cap to $800 million, while Georgia continues to attract large-scale studio projects with an uncapped credit and a booming infrastructure network.

The Funding Question

Still, the core tension remains unresolved: Will California raise the annual program cap, currently set at $330 million, to compete with those out-of-state rivals?

Last fall, Governor Gavin Newsom floated a dramatic proposal to raise the cap to $750 million, aligning California with the country’s most competitive programs. But that proposal hit turbulence last month when the Senate Budget Committee removed language calling for the cap increase, citing concerns over making large appropriations outside the normal state budget process.

That timing is crucial. With California’s revised budget proposal due this month — and uncertainty around federal funding and economic volatility tied to ongoing national policy shifts — it’s unclear whether the tax credit expansion will receive full financial backing in this legislative session.

Sources familiar with the process told The Hollywood Reporter that June 15, the statutory deadline for passing California’s budget, may not yield final clarity on the cap. Because the film tax credit is a discretionary appropriation and not tied to essential government operations, it could remain unresolved until later budget negotiations.

What It Means for the Industry

For an industry still recovering from dual strikes and amid ongoing contraction across studio slates, the proposed expansion is a welcome — if overdue — move to shore up in-state production and prevent further job erosion. California has seen a steady exodus of productions over the past decade as producers chase more lucrative incentives elsewhere. The result has been a thinning of local crew employment and mounting concern from entertainment unions and guilds.

Backers of the legislation say it’s a long-term investment in California’s creative workforce.

“This is about more than incentives — it’s about preserving the infrastructure and identity of the entertainment capital of the world,” one legislative staffer familiar with the bill told StageRunner.

With competing markets only becoming more aggressive, the next few weeks could prove pivotal in determining whether California chooses to remain competitive — or risks further marginalization in an industry it helped build.