Income and corporate taxes: tax credits: motion pictures.

Assembly Member Zbur and Senator Allen have put forward comprehensive legislation to modernize California's film and television production tax credit program, expanding incentives while strengthening diversity and workforce development requirements. The bill increases the annual tax credit allocation from $330 million to $750 million and raises credit percentages to 35-40% for qualifying productions.

The legislation broadens eligibility to include animated films and series averaging 20 minutes or more per episode, as well as large-scale competition shows. Productions must now submit diversity workplans reflecting California's demographic makeup across race, ethnicity, gender, disability status, and veteran status. Those meeting diversity goals can receive up to 4% in additional credits.

To build industry workforce capacity, the bill expands the Career Pathways Program providing technical skills training for underserved communities. The program receives funding through a 0.5% fee on approved credits, with authority to increase to 1% based on outcomes. The California Film Commission must partner with nonprofit organizations demonstrating successful entertainment industry training and job placement.

The measure introduces new flexibility for tax credit assignment, allowing single-member LLCs to transfer credits to affiliated corporations. Independent film producers can sell credits to unrelated parties, subject to strict reporting requirements. The Commission gains authority to reallocate unused credits between categories to maximize utilization.

Productions filming at certified studio construction projects must ensure facilities are operated by workers receiving prevailing wages or utilizing skilled and trained workforces. The bill mandates annual reporting on diversity metrics and program effectiveness while maintaining confidentiality of taxpayer information.

Taking effect immediately as an urgency measure, the legislation aims to enhance California's competitiveness in attracting and retaining film and television production through expanded incentives while advancing workforce diversity and development goals.