California films that want tax credit must meet new diversity requirement

August 19, 2022

An amendment to include a diversity requirement to California’s $330 million tax incentive for film and TV production is now awaiting Gov. Gavin Newsom’s signature.

SB 485, which will extend the tax credit through 2030, was amended on Wednesday for tax credit beneficiaries to set hiring goals that are “broadly reflective of California’s population, in terms of race, ethnicity, and gender.”

The inclusion of diversity criteria in film credit programs is not a new concept, as a few other states, such as Illinois and New Jersey, have already implemented similar provisions.

Based on the most recent Census Bureau estimates, California’s population is 40% Latino, 35% white, 16% Asian American and 6.5% Black.

According to a report from the California Film Commission, the state’s film and TV workforce from projects that received a tax credit from 2015 to 202c0 were 70% white, 17% Latino, 7% Black and 4% Asian American.

Another inequality highlighted in the report was between genders, with 75% of film and TV jobs held by men and 25% held by women in the same period.

“The California Film Tax Credit has been incredibly successful as an economic driver for the state, however, there is a lot more to be done and it is long overdue in the investment of public dollars to create diversity and equity opportunities for both below and above the line workforce,” Assemblywoman Wendy Carrillo (D-Los Angeles) was quoted as saying.

“As we move forward, with support from Governor Gavin Newsom and the legislature, we expect the motion picture, television and streaming industry to embrace California’s broad and diverse population, in the stories they tell and in the people who work – in front and behind the camera – to bring those stories to audiences across the globe.”

The bill, which is set to take effect on July 1, 2023, would require productions availing the state’s film tax credit to submit a diversity work plan.

While the goals of the plan are not specifically enumerated, the hiring of productions wishing to benefit from the tax credit must be “broadly reflective” of the state’s diverse population. Productions are also required to submit a final diversity report that shows whether the hiring goals were met.

Productions that are able to meet their goals or show a “good faith effort” will be eligible for an additional 4% tax credit on top of the 20% or 25% credit that the current law prescribes.

The $150 million California incentive for the construction of new production soundstages, a separate incentive approved last year, also has the same diversity work plan requirement and the 4% bonus.

Featured Image via State of Reform

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