In a major win for Hollywood and Governor Gavin Newsom, California lawmakers have reached a deal to more than double the state’s annual film and television tax credit program—boosting the current $330 million cap to a game-changing $750 million.

The expansion comes amid mounting concern over dwindling in-state production levels and increased pressure to keep film and TV jobs from fleeing to states like Georgia or countries with more aggressive national incentives. The deal, reached between Newsom’s office and legislative leadership in both chambers, is expected to be finalized in a budget trailer bill up for vote this Friday, according to sources familiar with the negotiations.

Newsom first proposed the increase last fall during a press conference at Raleigh Studios, calling it a top priority for the 2024–2025 budget cycle. The California Film Commission estimates that the boost could result in a 40–50% jump in jobs supported by the program, equating to roughly 4,400 to 5,500 new industry jobs.

But it’s not just about bigger numbers—the newly negotiated companion bill, AB 1138, adds depth and reach to the credit itself.

Raising the Stakes for California Production

The bill will raise the base credit from 20% to 35%, with a potential uplift to 40% for projects that film outside Los Angeles County—an effort to spread production across the state and revitalize overlooked markets. It also expands eligibility to include animated series, multi-camera sitcoms, and large-scale competition shows, signaling a more inclusive definition of “qualified production.”

Workforce & Equity Enhancements

In response to union and community advocacy, the legislation also introduces new provisions aimed at promoting workforce diversity. Productions will be eligible for a 2% bonus if they hire one to four trainees from targeted job programs serving historically underserved communities. To protect union jobs, those trainees must be placed in addition to, not in place of, experienced crew.

The reporting requirements have also been expanded. In addition to race, ethnicity, and gender, productions must now report ZIP codes and veteran status—measures designed to help foster both demographic and geographic inclusion across California’s production workforce.

A Win, With Some Tensions

Not everyone got everything they wanted. The Out of Zone Coalition—a group of independent filmmakers and regional advocates outside Los Angeles—lobbied for a 10% bonus for non-L.A. productions, arguing the current program disproportionately benefits Hollywood. Lawmakers denied the request but kept the existing 5% uplift for shoots in designated areas.

A previous version of the bill included language around economically depressed zones, but that was scrapped after lawmakers deemed it too difficult to implement.

Fast Track to Enactment

AB 1138 is expected to pass before the July 4 holiday and will take effect immediately.

For California’s production sector, the move sends a clear message: The Golden State is doubling down on keeping cameras rolling at home.