BILL ANALYSIS
Bill No: AB
1778
SENATE COMMITTEE ON GOVERNMENTAL ORGANIZATION
Senator Roderick D. Wright, Chair
2009-2010 Regular Session
Staff Analysis
AB 1778 Author: Lieu
As Amended: May 13, 2010
Hearing Date: June 22, 2010
Consultant: Art Terzakis
SUBJECT
State Agency Promotions: commercials
DESCRIPTION
AB 1778 requires promotional activities conducted by state
entities to be filmed in California, except as specified.
Specifically this measure:
1. Stipulates that any department, commission, office,
agency, or other administrative entity of the state that
produces, or contracts for the production of, a
promotional commercial for the state or a product of the
state, and finances that commercial in whole or in part
with public funds, must require that commercial to be
filmed in California.
2. Provides an exception for any agreement between a state
entity and a private entity to feature or otherwise
promote a California product in a program that is made by
a private entity and featuring or promoting the product
is not the primary purpose of the program.
EXISTING LAW
Existing law provides for the California Film Commission
which offers free on-line permitting for all state property
including state parks and beaches, freeways, roads, and
government buildings. California has a network of over 50
Regional Film Offices across the state to provide localized
support, detailed location information and facilitate the
AB 1778 (Lieu) continued
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permit process. Existing law also provides various
incentives, including tax incentives, to specified entities
that undertake film production in California.
BACKGROUND
Purpose of AB 1778: According to the author, "This bill is
intended to ensure that all commercials made on behalf of
the State of California, and paid for with state funds, are
actually filmed in California. When California taxpayers
finance the filming of a commercial that promotes
California or its products, they expect the money will be
spent in California, using the talents of California
workers to support our economy. This is particularly
important because California is in the midst of the worst
recession since the Great Depression."
Happy Cows Come From New Zealand: According to the author,
one of the reasons for this bill is that the California
Milk Advisory Board recently brought a production crew to
Auckland, New Zealand to shoot a series of 10 commercials
claiming that California cows are happier. "The Board
stated that this particular filming was a 'minor portion of
production' and that any cows identified as Californian in
the ads will be actual California cows." The Board further
said that in this particular case, "They were not actually
shooting Happy California Cows commercials in New Zealand;
they were shooting unhappy cows from all over the world
auditioning to become California cows. Regardless, it
makes sense to clarify in the law that an ad promoting a
California product should actually be filmed in the State
of California." In a recent LA Times article, the Milk
Board defended its actions based upon the economics of
filming in New Zealand, saying, "We have a fiduciary
responsibility to spend their (the dairy industry) hard
earned dollars as efficiently as we can. In this particular
case, we found significant cost savings by shooting a
portion of this product overseas."
Arguments in Support: Writing in support of this measure,
the California Labor Federation states, "At a time of
budget shortfall, there is little the state can do directly
to create jobs. One important tool we have is the use of
public dollars. Taxpayer funds can and should be directed
to creating jobs here in California." Furthermore, the
AB 1778 (Lieu) continued
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California Labor Federation contends that "Investing in
jobs here does more than just reduce unemployment. For
every good job created, there is a multiplier effect, as
another family is able to put money back into the economy
again. In addition, there is a general fund savings as
fewer working families are forced to rely on the safety
net."
Also writing in support, the California Teamsters Public
Affairs Council states, "We think it only makes sense that,
when California taxpayers finance the filming of a
commercial promoting California or its products those
monies should be spent in California, using the talents of
California workers to support our economy."
Arguments in Opposition: The California Cut Flower
Commission and the California Pear Growers claim that
enactment of AB 1778 will negatively impact the ability of
industry funded programs, such as agricultural commissions
and marketing orders, to promote California products.
These opponents argue that agricultural commissions and
marketing orders are funded entirely through assessments on
California farmers and food processors. Such funds are
held in trust at the California Department of Food and
Agriculture and can only be used for specific statutorily
prescribed programs and activities. Additionally, these
opponents emphasize that "no public or general funds are
used by these entities. However, AB 1778 treats these
industry funded programs as if general funds were being
used."
The Alliance of Western Milk Producers, points out that the
most promising market for the future of the California
dairy industry consists of Pacific Rim countries. The
Alliance believes that AB 1778 would prohibit the use of
film crews in Asia to prepare promotional pieces that would
effectively appeal to audiences in that region of the
world, thus hampering promotional efforts and campaigns to
increase demand for California products overseas. Another
example provided by the Alliance involves the Food Network
which is based in New York City. The Alliance believes
that any interest in partnering with this network or its
celebrity chefs would be severely hampered or simply not
allowed by AB 1778 because under the provisions of AB 1778
such filming would be restricted to California.
AB 1778 (Lieu) continued
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Also writing in opposition, the Western United Dairymen
contend that AB 1778 raises serious legal issues that
include questions of federal preemption and an illegal
trade barrier under the Commerce Clause of the U.S.
Constitution.
PRIOR/RELATED LEGISLATION
SB 1131 (Calderon) 2009-10 Session. Would prohibit the
state from expending any state funds for the purpose of
filming or producing commercials or other filmed materials,
for commercial use, outside of California. (Pending in
Assembly Policy Committee)
SB 15XXX (Calderon) Chapter 17, Statutes of 2009. Among
other things, established a motion picture production tax
credit, as specified, to be administered by the California
Film Commission.
SB 1356 (Murray) Chapter 715, Statutes of 2002. Expanded
eligible costs for which film production can receive
reimbursements under the Film California First Program
administered by the California Film Commission.
SJR 28 (Murray) Resolution Chapter 80 of 2002. Urged
Congress to enact the Independent Film and Television
Production Incentive Act of 2001 which would grant tax
credits of 25% for certain wages in the production of films
and television programs in the U.S., and 35% of wages that
are paid in low income areas.
AB 484 (Kuehl) Chapter 699, Statutes of 2000. Established
the California First Program, administered by the
Technology, Trade and Commerce Agency, to assist production
companies by providing various incentives and assistance in
using state leased property.
SUPPORT: As of June 18, 2010:
California Teamsters Public Affairs Council
California Labor Federation
Edward Gutentag, cinematographer & founder of
Shootmoviesincalifornia.com
California Conference Board of the Amalgamated Transit
Union
California Conference of Machinists
AB 1778 (Lieu) continued
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United Food and Commercial Workers Region 8 States Council
UNITE-HERE!
Engineers and Scientists of California IFPTE Local 20
Professional and Technical Engineers, IFPTE Local 21
International Longshore and Warehouse Union
Jockeys' Guild
OPPOSE: As of June 18, 2010:
Agricultural Council of California
Alliance of Western Milk Producers
California Cut Flower Commission
California Pear Growers
Dairy Institute of California
Milk Producers Council
Western United Dairymen
FISCAL COMMITTEE: Senate Committee on Appropriations
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