Income and corporate taxes: tax credits: motion pictures.

Senators Allen, Menjivar, Pérez, and Stern have proposed sweeping changes to California's motion picture tax credit program that would increase available credits to $750 million annually and expand eligibility to new production categories starting in 2025.

The legislation modifies the existing program by raising credit percentages to 35-40% of qualified expenditures, up from the current 20-25%. It extends eligibility to live action and animated series with episodes averaging 20 minutes or more, animated films, and large-scale competition shows, provided they meet minimum budget requirements. The bill also revises how credits are allocated to recurring television series by implementing a new calculation method based on base year allocations plus annual adjustments.

To promote industry diversity, productions must submit detailed workforce diversity plans and interim assessments to receive the full credit amount. The bill maintains the Career Pathways Training program funded by a 0.5% fee on approved credits, with authority to increase the fee up to 1% by 2028 based on program outcomes. Independent films with budgets under $10 million would continue paying a reduced 0.25% fee.

The legislation requires productions to reapply for credits if they do not request allocations within 18 months of completing their previous season's principal photography. It also modifies studio construction project credits by removing certain ownership requirements while maintaining prevailing wage standards for ongoing facility operations and maintenance.

The California Film Commission would oversee implementation through regulations, with expanded reporting requirements on diversity outcomes and career training program effectiveness. The changes require two-thirds approval from both legislative chambers due to their impact on state tax revenues.