California lawmakers are pushing forward with a major expansion of the state’s film and television tax credit program, aiming to make it more competitive with states like Georgia and countries that have been drawing productions away. Two new bills, introduced Wednesday, propose broadening the scope of qualifying productions and increasing financial incentives to lure back major film and television projects.

Assemblymember Rick Chavez Zbur, who co-introduced SB 630 and AB 1138 alongside Senator Ben Allen and Assemblymember Isaac Bryan, emphasized that the initiative is a direct response to California’s declining production levels and widespread industry job losses. “This is about jobs, high-quality, largely union jobs, and ensuring that California remains the center of global entertainment,” Zbur said during a press conference at SAG-AFTRA headquarters.

The proposed changes come at a critical time for Hollywood. In 2023, Governor Gavin Newsom announced plans to increase the state’s annual film and TV tax incentive cap to $750 million, a significant jump from its current level. If fully implemented, the new incentives would inject as much as $3.75 billion into the industry over five years—making it the second-largest tax incentive program in the U.S., trailing only Georgia, which has no cap.

Industry at a Crossroads

The urgency to expand California’s incentives has grown as production in Los Angeles has hit its second-lowest level since the pandemic, according to FilmLA. A combination of the 2023 strikes, economic uncertainty, and increasing out-of-state competition has left thousands of industry workers unemployed or underemployed.

Tom Davis, president of the California IATSE Council, underscored the impact, noting that more than 17,000 full-time jobs have been lost in recent years due to productions moving elsewhere. Meanwhile, Teamsters Local 399 leader Lindsay Dougherty called on studios to reinvest in the state: “We, the unions and the guilds, support this, but we urge executives to commit to California and the workforce that built this industry.”

Even prop houses are feeling the squeeze. Pam Elyea, owner of North Hollywood’s History for Hire, painted a stark picture, explaining that rent now consumes 60% of her income, up from 20% five years ago. “I have six months left on my lease. If California is committed to leveling the playing field, I can keep going,” she said.

A New Tax Credit Formula

One of the key aspects of the legislation is modernizing the tax credit structure to align with other competitive regions. While details are still being negotiated, SB 630 and AB 1138 aim to expand eligibility criteria, potentially allowing more types of productions—such as streaming series, independent films, and post-production services—to benefit from the program.

Senator Ben Allen stressed that 77% of productions that don’t receive a California tax credit end up filming in other states or countries, underscoring the need to rethink the way tax breaks are distributed.

The legislation also coincides with a larger shift in state priorities under Governor Newsom’s administration, which is looking to boost economic growth through entertainment and technology investments.

The Road Ahead

With the bills now introduced, negotiations with industry stakeholders will determine the final structure of the incentive program. If passed, the expansion could help stem the exodus of productions from California, ensuring that studios, streaming platforms, and independent filmmakers continue to call the state home.

However, questions remain:

• Will the expanded incentives be enough to counteract competition from Georgia, New York, and the UK?

• How will studios respond to the new tax credit structure?

• Can California’s infrastructure support a resurgence in production, given the recent decline in available crews and facilities?

For now, industry leaders, lawmakers, and production companies are watching closely as California fights to reclaim its place at the top of the global production landscape.