BILL ANALYSIS                                                                                                                                                                                                    Ó



          SENATE COMMITTEE ON
          BUSINESS, PROFESSIONS AND ECONOMIC DEVELOPMENT
                              Senator Jerry Hill, Chair
                                2015 - 2016  Regular 

          Bill No:            AB 1941         Hearing Date:    June 13,  
          2016
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          |Author:   |Lopez                                                 |
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          |Version:  |June 6, 2016   Amended                                |
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          |Urgency:  |No                     |Fiscal:    |Yes              |
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          |Consultant|Nicole Billington                                     |
          |:         |                                                      |
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             Subject:  California Film Commission: membership and duties


          SUMMARY:  Requires the Governor to appoint an independent filmmaker and  
          an independent commercial producer as two of her or his  
          appointees to the California Film Commission (Commission).   
          Requires the Commission to post information relating to  
          independent film productions on its website. 

          Existing law: 
          
          1)Establishes the Governor's Office of Business and Economic  
            Development (GO-Biz) to serve as the lead state entity for  
            economic strategy and marketing of California on issues  
            relating to business development, private sector investment,  
            and economic growth.  (Government Code (GC) §§ 12096 -  
            12098.5)

          2)Establishes the Commission to encourage motion picture and  
            television filming in California and make recommendations to  
            the Legislature, the Governor, and GO-Biz to improve the  
            position of the state's motion picture industry in the  
            national and world markets.  (GC §§ 14998 - 14999.55)

          3)Requires Commission membership to conform to a number of  
            requirements including, but not limited to, the following:   
            (GC § 14998.2)

             a)   Commission shall consist of 26 members.  The Governor  







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               shall appoint 
             13 members; the Senate Committee on Rules shall appoint four  
               members; the Speaker of the Assembly shall appoint four  
               members; and five members shall be ex-officio. 

             b)   Members of the Commission appointed by the Governor may  
               include representatives of state and local government,  
               motion picture development companies, employee and  
               professional organizations composed of persons employed in  
               the motion picture industry, and other appropriate members  
               of this or related industries.

             c)   Six of the 13 members appointed by the Governor shall be  
               as follows:

               i)     One shall be a person who is a member or employee of  
                 a union or guild of motion picture artists.

               ii)    One shall be a person who is a member or employee of  
                 a union or guild representing motion picture craftsmen,  
                 technicians, or photographers.

               iii)   Two shall be from major motion picture studios.

               iv)    One shall be a member of the city council or a  
                 member of the county board of supervisors of a city or a  
                 county with a population of at least two million people.

               v)     One shall be a member of the city council or a  
                 member of the county board of supervisors of a city or a  
                 county with a population of less than two million people.

             d)   One of the members appointed by the Senate Committee on  
               Rules shall, and another one may, be a Senator.  One of the  
               members appointed by the Speaker of the Assembly shall, and  
               another one may, be a Member of the Assembly. 

             e)   The five ex-officio members shall include: the Director  
               of Transportation, the Director of Parks and Recreation,  
               the Commissioner of the California Highway Patrol, the  
               State Fire Marshal, and the Director of the CFC.  

             f)   All members of the Commission, except Legislators  
               appointed either by the Senate Committee on Rules or by the  








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               Speaker of the Assembly, shall serve at the pleasure of the  
               appointing authority for a term of two years from the  
               effective date of the appointment.  Legislators appointed  
               by the Senate Committee on Rules or by the Speaker of the  
               Assembly shall be appointed for four year terms.  Whenever  
               a Legislator vacates an office, the appointing power shall  
               appoint another person for a new full term.

             g)   Of the Legislators appointed to the Commission, no more  
               than three Legislators from the same political party may be  
               appointed to or serve on the Commission at the same time.

          This bill:

          1) Requires another appointment to the Commission by the  
             Governor to be an independent filmmaker, where an independent  
             filmmaker is a producer of a film that meets all of the  
             following criteria:

             a)   Has a running time of at least 75 minutes.

             b)   Is intended for commercial distribution to a motion  
               picture theater, directly to the home video market,  
               directly to television, or through the Internet. 

             c)   Is produced by a company that is not publicly traded and  
               publicly traded companies do not own, directly or  
               indirectly, more than 25 percent of the producing company. 

          2) Requires another appointment to the Commission by the  
             Governor to be an independent commercial producer or employee  
             of a trade association representing independent commercial  
             producers, where an independent commercial producer meets all  
             of the following criteria:

             a)   Is a producer who owns or is employed by a company that  
               is principally engaged in the physical or digital  
               production of advertising content for advertisers.

             b)   Has control over the selection of production location,  
               deployment, or management of the production equipment and  
               directly employs the production crew as the person that has  
               control over the hiring and firing of the crew for a  
               commercial production.








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             c)   The company shall not be wholly or partly owned or  
               operated by an advertising agency or an advertiser or be  
               publicly traded and shall not produce any production to  
               which the recordkeeping requirements of Section 2257 of  
               Title 18 of the United States Code apply. 

          3) Requires the Commission to create a navigational link on its  
             website labeled "Independent Films" that includes information  
             explaining the qualified motion picture tax credits available  
             to independent films, outlining the application process, and  
             highlighting that the Commission is required to allocate five  
             percent of the aggregate amount of credits to independent  
             films. 


          
          FISCAL  
          EFFECT:  According to an analysis by the Assembly Appropriations  
          Committee dated April 27, 2016, any costs to the Commission  
          resulting from this measure would be minor and absorbable. 

          
          COMMENTS:
          
          1. Purpose.  The  Sponsor  of this bill is  Groat Family  
             Productions  .  According to the Author, independent filmmakers  
             have smaller budgets and face many unique challenges during  
             the film production process including logistics of  
             production, smaller crew sizes, less recognizable talent, and  
             longer timeframes to complete production.  The greatest  
             challenges, according to the Author, arise with funding and  
             distribution of a project.  Due to these challenges, the  
             Author writes, independent filmmakers "bring with them a  
             special set of learned skills and experiences."  In  
             2012-2013, California produced 177 independent films, which  
             is the greatest number of any state.  New York produced the  
             next greatest number with 96 independent productions.  The  
             Author argues, "At such a high number of productions, we  
             should ensure that the unique needs of independent filmmakers  
             are heard [?] so that California can remain first in the  
             United States in producing independent films. [?]  Since more  
             independent film productions are made [each] year than large  
             studio productions, it is critical that an independent  








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             filmmaker be added to the [Commission]."

          2. Independent Film Production.  An independent film is any  
             motion picture produced with a majority of funds from sources  
             other than the six major Hollywood studios.  Independent  
             films range from small alternative films to big-budget  
             features such as The Hunger Games and Million Dollar Baby.   
             Since 1980, Independent Film & Television Alliance (IFTA)  
             members have produced and distributed more than half of the  
             films that have won the "Best Picture" Academy Award  
             including: Braveheart, No Country for Old Men, and Slumdog  
             Millionaire.  According to IFTA, the major Hollywood studios  
             are increasingly reducing the number of films they produce  
             in-house and are relying more on independents to deliver  
             completed pictures to feed their domestic distribution  
             pipelines.  The major studios have gradually become more  
             marketing and distribution specialists in the U.S.  
             marketplace than production entities.
          
          3. Prior Related Legislation.   AB 1839  (Gatto and Bocanegra,  
             Chapter 413, Statutes of 2014) extended, for five years, the  
             requirement that the California Film Commission (CFC)  
             annually allocates tax credits to qualified motion pictures,  
             as specified, continuing through the 2021-22 fiscal year.

              AB 2026  (Fuentes, Chapter 841, Statutes of 2012) extended the  
             film production tax credit program for two years, until 2017.

              AB 29  (John A. Pérez, Chapter 475, Statutes of 2011)  
             establishes GO-Biz within the Governor's Office for the  
             purpose of serving as the lead entity for economic strategy  
             and marketing of California on issues relating to business  
             development, private sector investment and economic growth.  

              AB 1069  (Fuentes, Chapter 731, Statutes of 2011) extended the  
             film production tax credit program for one year, until 2015.

              ABX3 15  (Krekorian, Chapter 10, Statutes of the 2009-10 Third  
             Extraordinary Session) established a five year, $500 million  
             tax credit for qualified expenditures on qualified  
             productions and limited allocations to $100 million per year.  
              

              AB 1277  (Cohn, Chapter 662, Statutes of 2003) transferred  








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             administrative authority over the Commission to the Business,  
             Transportation & Housing Agency and created the Film  
             California First Fund, administered by the Commission, which  
             provided for reimbursements to local governments for their  
             costs in issuing permits for local filming of motion  
             pictures. 

              AB 2410  (Frommer, Chapter 1042, Statutes of 2002) required  
             the Commission to report annually the number of motion  
             picture starts that occurred within California and required  
             Employment Development Department to research and maintain  
             data on film industry employment to determine the economic  
             impact of the film industry, monitor film industry employment  
             and activity in competing states and countries, and examine  
             the ethnic diversity and representation of minorities in the  
             entertainment industry.

              AB 484  (Kuehl, Chapter 699, Statutes of 1999) created the  
             Film California First program, housed at the California Film  
             Commission to reimburse certain film costs incurred by a  
             qualified production company when filming on public property.
          


          SUPPORT AND OPPOSITION:
          
           Support:  

          None on file as of June 7, 2016.

           Opposition:  

          None on file as of June 7, 2016.
                                      -- END --