Cal­i­for­nia holds its fi­nal film tax credit lot­tery

The old pro­gram is be­ing re­placed with a new ef­fort in­tended to keep more TV, film pro­duc­tion in state.

Los Angeles Times - - BUSINESS - By Richard Ver­rier richard.ver­rier@la­times.com

The Cal­i­for­nia Film Com­mis­sion held its fi­nal film tax credit lot­tery this week, closing the chap­ter on a con­tro­ver­sial pro­gram that frus­trated many film pro­duc­ers.

On Wed­nes­day, the com­mis­sion held its sev­enth and fi­nal lot­tery as it phased out the old film in­cen­tives pro­gram with a new and ex­panded ver­sion in­tended to keep more pro­duc­tion from flee­ing Cal­i­for­nia.

The lot­tery was typ­i­cally over­sub­scribed: The com­mis­sion said 18 in­de­pen­dent movies were se­lected at ran­dom from 246 ap­pli­ca­tions for tax cred­its to­tal­ing $10 mil­lion for that cat­e­gory.

The com­mis­sion did not iden­tify the projects, say­ing their ap­pli­ca­tions were sub­ject to fur­ther re­view. An ad­di­tional 228 ap­pli­ca­tions were put on a wait­ing list.

Com­par­isons with last year are dif­fi­cult be­cause this year’s lot­tery was limited to in­de­pen­dent films. Most of the in­cen­tive money was gob­bled up by ex­ist­ing tele­vi­sion shows, such as “Teen Wolf ” and “Pretty Lit­tle Liars,” that re­ceived $90 mil­lion un­der the old pro­gram.

In­de­pen­dent film pro­duc­ers who didn’t make the cut will have other op­por­tu­ni­ties later this year to ap­ply for in­cen­tives, which al­low film­mak­ers to re­coup up to 25% of ex­pen­di­tures on crew mem­ber wages and other qual­i­fied pro­duc­tion costs.

“The good news is that all of th­ese pro­duc­tions will get a sec­ond chance to ap­ply for the money,” said Amy Lemisch, ex­ec­u­tive direc­tor of the Cal­i­for­nia Film Com­mis­sion.

Last year, the Leg­is­la­ture passed a bill to re­place the lot­tery with an ex­panded pro­gram that triples fund­ing to $330 mil­lion an­nu­ally and al­lows more projects to qual­ify, such as big-bud­get fea­tures and TV pi­lots.

In­stead of us­ing a lot­tery, the new sys­tem will award cred­its based on a so-called jobs ra­tio that takes into ac­count how many peo­ple pro­duc­tions em­ploy rel­a­tive to the size of their credit.

Ap­pli­cants can boost their ra­tio if they do vis­ual ef­fects work in Cal­i­for­nia or film out­side the Los An­ge­les zone.

The Leg­is­la­ture also es­tab­lished sep­a­rate pools of funds: 40% for new dra­mas, movies of the week, minis­eries and re­cur­ring TV se­ries; 35% for fea­tures; 20% for re­lo­cat­ing TV se­ries and 5% for in­de­pen­dent fea­tures.

The com­mis­sion will take ap­pli­ca­tions May 11-17 for stu­dio TV projects and July 13-25 for in­de­pen­dent and fea­ture films.

A third al­lo­ca­tion will oc­cur some­time next win­ter.

“We are re­ceiv­ing lots of in­quiries from the stu­dios about the pro­gram and we very much an­tic­i­pate they are look­ing to sub­mit for a va­ri­ety of projects,” Lemisch said.

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