BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                  AB 1069
                                                                  Page  1

          Date of Hearing:   May 27, 2011

                        ASSEMBLY COMMITTEE ON APPROPRIATIONS
                                Felipe Fuentes, Chair

                    AB 1069 (Fuentes) - As Amended:  May 18, 2011 

          Policy Committee:                              Arts Vote:9-0
                        Revenue and Taxation                  

          Urgency:     No                   State Mandated Local Program: 
          No     Reimbursable:               

           SUMMARY  

          This bill:

          1)Extends operation of the California Motion Picture Tax Credit, 
            which is allocated by the California Film Commission (CFC), 
            for five additional years, from July 1, 2014 until July 1, 
            2019. 

          2)Specifies that the aggregate amount of motion picture tax 
            credits that may be allocated in any fiscal year shall not 
            exceed $100 million through 2018-19.

           FISCAL EFFECT  

          The Franchise Tax Board (FTB) staff estimates that this bill 
          will result in an annual revenue loss of $11 million in 2013-14, 
          $49 million in 2014-2015, and $83 million in 2015-16, with the 
          additional revenue loss totaling $357 million through 2018-19. 

           COMMENTS  

           Background and Purpose  . ABX3 15 (Krekorian), Chapter 10 of 2009 
          established a five-year, $500 million tax credit for qualified 
          expenditures on qualified productions.  Allocations of this 
          credit are limited to $100 million per year.  

          According to the author, "California suffered both job and 
          financial losses as hundreds of productions have left the state 
          to seek incentives offered elsewhere.  A phenomenon commonly 
          referred to 'run-away production.'  In addition to the 
          international competition from Canada, Australia and most EU 








                                                                  AB 1069
                                                                  Page  2

          nations, over 40 U.S. states offer meaningful financial 
          incentives to the film industry successfully luring production 
          and post-production jobs and spending away from California.

          "In February 2009, the California Film & Television Tax Credit 
          Program was enacted as part of a targeted economic stimulus 
          package to increase production spending, jobs and tax revenues 
          in California.  AB 1069, in seeking a five-year extension to the 
          existing law, acknowledges that the Program has been successful 
          in its goal to retain and increase film and television 
          production occurring in California."

           Analysis Prepared by  :    Chuck Nicol / APPR. / (916) 319-2081