Only 28 projects are picked from lottery to get funding. Meanwhile, an effort to extend the program is slowly working its way through the legislature in Sacramento.
The California Film Commission received a record 322 applications Friday for a share of the $100 million or more in funding available annually through the state's Film & Television Tax Credit Program, of which 28 have been selected to receive tax credits.
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Last year the commission received 176, of which 27 received funding. Ultimately, 74 projects received credits from last year's allocation.
"The increase was due to the large number of smaller independent projects that moved form the waiting list to receive credits as larger projects withdrew form the program," says Amy Lemisch, executive director of the California Film Commission.
In June 2010, there were 70 applications, of which 43 eventually received funding valued at $121 million. That means the number of applicants has nearly doubled each year.
The program allows money to be rolled over from one year to another year so it can exceed $100 million available.
There was a line of people at the Commission offices on Hollywood Boulevard Friday, even before the doors opened at 9 a.m., to drop off applications .
They were in a rush because all those tax credits were committed by the time the doors closed at 3 p.m. as has been the case every year since the program was initiated in 2009 in an effort to stem runaway production – the making of movies and TV shows in places other than California.
The efforts to attract movie and TV production have become serious business for more than 40 U.S. states and a large number of foreign countries. They like the industry because it is seen as somewhat glamorous, non-polluting and, in some cases, a boon to tourism after the movie or TV show appears.
There have been a number of studies that indicate movie and TV production can contribute to a states economy, but there have also been studies which question its value. It seems that in states like Louisiana, North Carolina and New Mexico, where a based of facilities and a trained work force has developed, there is real benefit. It is harder to find the value for cities, states and countries who give tax breaks but have little to show after the production and its cast and crew have left the area.
Among productions in California in the past year that benefited from the state tax credit program were HBO's Hemmingway and Gellhorn, the feature films Argo, Dunderheads, Nina, and the independently financed features Bachelorette Party, Decoding Annie Parker, Lovelace, Lowdown, Suicide Kings 2, Trust Me and Vocal Chords of Freedom. Cable TV series include Franklin and Bash, Justified, Men of a Certain Age, the Nine Lives of Chloe King, Pretty Little Liars, Rizzoli & Isles, The Protector, and Perception. The two TV series returning to California are Body of Proof and Torchwood.
The breakdown of approved projects (and percentage of the total it represents) for 2011 was studio features 4 (14.8 percent), independent features 10 (37 percent), (cable) TV series 10 (37 percent), independent movies of the week 1 (3.7 percent) and TV series that relocated to California from other states 2 (7.4 percent).
On movie credit lottery day in California, each application is assigned a lottery number. At the end of the day, a member of the California Highway Patrol pulled out the winning numbers. Those are the projects that will be funded in the coming fiscal year, as long as they meet all criteria and actually get made as promised.
Those who applied and qualify but were not chosen go on a waiting list. Based on past history, some of them will eventually get funding. New applications are still accepted after the June 1 deadline, but they start at the bottom of the list and chances of ever actually getting credits are not very good.
The rules provide for a 20 percent tax credit for feature films with budgets between $1 million and $75 million; movies of the week and cable TV series.
There is a 25 percent credit for independent films, with a budget over $1 million and under $10 million. Of the $100 million authorized each year, $10 million is reserved to fund independently produced movies.
Notably most TV series are not covered, as the legislators believe that they will probably shoot in California in any case since it makes economic sense to produce them on existing studio lots. The exception is that a series which has been shot out of state can get a 25 percent tax credit if it returns to California.
The current tax credit program has government approval through July 2013. California Assemblyman Filipe Fuentes (D-San Fernando Valley) has introduced a bill in Sacramento to extend the program for an additional five years. It is currently before the Assembly Appropriations Committee, which in May delayed a hearing due to the heavy volume of other bills that needed to be heard more quickly.
It now appears the committee will hear the bill and probably vote on it by late June.
There is a similar but not identical bill in the California state Senate introduced by Ron S. Calderon (D- Montebello) earlier this year. That bill is awaiting action before the Senate governance committee.
The two bills must pass by the end of the current legislative session, which means by September 1, to go to the governor's desk. Gov. Brown signed a bill last year that extended the tax credit program for one year but has not said whether or not he will sign the five-year extension if it passes.
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