California Legislature Approves Bill Extending Film and TV Tax Credit Program and Introducing Set Safety Advisors Program
The California Legislature has recently passed a bill that significantly changes the compensation structure for studios and production companies filming in the state. The bill also introduces a groundbreaking set safety pilot program with the support of industry unions.
Now awaiting Governor Gavin Newsom’s approval, the bill extends the state’s $330 million incentive program for film and TV production for five years. Notably, it makes the tax credits refundable, allowing companies to receive a refund for a portion of their recognition that exceeds their tax liability. Previously, only Disney and NBCUniversal could fully benefit from the program due to their tax liabilities in California. The bill also incorporates provisions from a separate statement, SB 735, authored by State Senator Dave Cortese. Inspired by the tragic shooting incident on the set of Rust in 2021, this bill seeks to regulate firearms usage on film and television sets. It establishes a pilot program introducing dedicated “safety advisors” during productions.
This legislation aims to prevent productions from relocating to other states offering more generous tax incentives while addressing concerns regarding set safety following the tragic shooting incident involving cinematographer Halyna Hutchins on the Rust set in New Mexico.
Assemblymember Wendy Carrillo, D-Los Angeles, one of the bill’s authors, stated, “It’s a great compromise that addresses the three main issues of set safety supervision, refundability, and diversity. California needs to remain competitive, and the initial purpose of this program was to prevent productions from leaving the state.”
Regarding set safety, the bill codifies existing safety practices on major productions into law, to be enforced by the Division of Occupational Safety and Health (Cal/OSHA). According to the bill, crew members responsible for handling firearms, such as armorers, property masters, or assistant property masters, must possess a state permit and federal documentation. They are also required to complete designated safety training. Furthermore, individuals working with firearms or near them must undergo safety training. The bill also prohibits ammunition on entertainment sets, except under specific prescribed conditions.
The bill proposes a five-year pilot set safety program. It will apply to all productions participating in the California Film & TV tax credit program. It will require a dedicated “safety advisor” on each set. The advisor will conduct an initial risk assessment and remain involved throughout the production. The pilot program is scheduled from July 1, 2025, to June 30, 2030.
State Senator Dave Cortese stated, “Discussions surrounding this legislation began shortly after the tragic loss of a cinematographer. These negotiations have resulted in the nation’s first and best safety practices for California workers in the vital motion picture industry.”
Rebecca Rhine, Executive Director of the Directors Guild of America Western, expressed her support for the safety provisions, stating, “While this model begins with the film tax incentive in California, we hope to see it become the standard nationwide.”
The legislation also includes diversity requirements for studios to receive full tax benefits when shooting in the state. Participating productions will automatically receive 96 percent of the use, with the opportunity to earn an additional 2 percent by meeting diversity quotas for below-the-line and above-the-line crew. These requirements will not apply to independent films with qualified expenditures below $10 million. At the end of each year, the California Film Commission will produce a report on the diversity of selected crew members eligible for tax credits.
Assembly member Carrillo emphasized the importance of this aspect, stating, “It’s a reputational check in many ways. The studios have committed to improving diversity, and this will allow us to assess whether they have fulfilled their requirements.”
Refundability of tax incentives, which will commence in 2025, was a key demand from studios. Under the new system, selected companies will receive a refund equal to the lesser of 18 percent of the credit or 90 percent of the portion of the credit exceeding their tax liability. However, companies opting for a refund will forfeit a part of their credit equal to the lesser of 2 percent of the credit or 10 percent of the portion exceeding their tax liability.
The bill also increases funding for the Career Pathways Training program, administered by the International Alliance of Theatrical Stage Employees (IATSE), from 0.25 percent to 0.5 percent of the credit allocation received by productions.
Industry unions, including the Directors Guild of America and the California IATSE Council, have supported these set safety provisions since State Senator Dave Cortese introduced the separate set safety bill in 2022. The current set of safety language reflects a consensus between major industry unions and the Motion Picture Association, a trade group. The 2022 bill failed due to a lack of agreement among stakeholders, but this year, they came together to find a solution. (However, the Alliance of Special Effects & Pyrotechnic Operators has publicly opposed this solution.)
In a statement, Motion Picture Association Chairman Charles Rivkin remarked, “With the passage of the California Film & Television Tax Credit 4.0 program, the state has ensured that the film, television, and streaming industry will continue to thrive and contribute to California’s economic landscape in the future.”
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