AB-1377
Budget & Economy

Income taxes: credits: motion picture credit.

Engrossed
CA
2025-2026 Regular Session
0
0
Track

Key Takeaways

  • Eliminates the 'good faith effort' standard for film tax credits, requiring production companies to meet diversity goals.
  • Maintains the existing $330 million annual tax credit cap for qualified film and TV productions through 2029-30.
  • Requires productions to submit and achieve diversity workplan goals to receive an additional 4% tax credit.
  • Establishes a Career Pathways Training program funded by 0.5% of approved tax credits to train underserved communities.

Summary

Assembly Member McKinnor, alongside a bipartisan group of co-authors, proposes significant changes to California's motion picture tax credit program that would strengthen diversity requirements for film and television productions seeking state tax incentives. The legislation modifies how production companies qualify for additional tax credits by eliminating the current "good faith effort" standard for meeting diversity goals.

Under the proposed changes, production companies must demonstrate actual achievement of their stated diversity objectives to receive the full tax credit allocation. The California Film Commission would evaluate whether productions have met specific diversity targets in their workforce composition and creative roles, rather than accepting evidence of attempted compliance. This represents a shift from the existing framework, which allows productions to qualify for additional credits by showing they made reasonable attempts to achieve diversity goals.

The bill maintains the program's core structure of providing tax credits worth up to 25% of qualified production expenses, with the base credit rate at 20% for most productions. Productions can still earn an additional 4% credit by meeting diversity targets, but would need to show concrete results rather than just documented efforts. The legislation preserves other existing incentives, including bonuses for filming outside the Los Angeles area and for visual effects work performed in California.

To support industry-wide diversity initiatives, the bill continues requiring productions to pay into a Career Pathways Training Program, with fees set at 0.5% of the approved credit amount for standard productions and 0.25% for independent films. This program provides technical skills training to individuals from underserved communities seeking to enter the film and television industry.

The changes would take effect for taxable years beginning on or after January 1, 2025, giving the industry time to adjust hiring and recruitment practices to meet the new standards. The California Film Commission would maintain oversight of the program, with expanded responsibilities for verifying diversity compliance and reporting outcomes to the Legislature.

Key Dates

Next Step
Referred to the Senate Standing Committee on Appropriations
Next Step
Senate Committee
Referred to the Senate Standing Committee on Appropriations
Hearing has not been scheduled yet
Senate Revenue and Taxation Hearing
Senate Committee
Senate Revenue and Taxation Hearing
Do pass, but first be re-referred to the Committee on [Appropriations]
Vote on Assembly Floor
Assembly Floor
Vote on Assembly Floor
AB 1377 McKinnor Assembly Third Reading
Assembly Appropriations Hearing
Assembly Committee
Assembly Appropriations Hearing
Do pass
Assembly Revenue And Taxation Hearing
Assembly Committee
Assembly Revenue And Taxation Hearing
Do pass and be re-referred to the Committee on [Appropriations]
Assembly Arts, Entertainment, Sports, And Tourism Hearing
Assembly Committee
Assembly Arts, Entertainment, Sports, And Tourism Hearing
Do pass and be re-referred to the Committee on [Revenue and Taxation]
Introduced
Assembly Floor
Introduced
Introduced. To print.

Contacts

Profile
Anna CaballeroD
Senator
Committee Member
Not Contacted
Not Contacted
Profile
Heath FloraR
Assemblymember
Bill Author
Not Contacted
Not Contacted
Profile
Tim GraysonD
Senator
Committee Member
Not Contacted
Not Contacted
Profile
Megan DahleR
Senator
Committee Member
Not Contacted
Not Contacted
Profile
Kelly SeyartoR
Senator
Committee Member
Not Contacted
Not Contacted
0 of 12 row(s) selected.
Page 1 of 3
Select All Legislators
Profile
Anna CaballeroD
Senator
Committee Member
Profile
Heath FloraR
Assemblymember
Bill Author
Profile
Tim GraysonD
Senator
Committee Member
Profile
Megan DahleR
Senator
Committee Member
Profile
Kelly SeyartoR
Senator
Committee Member
Profile
Tina McKinnorD
Assemblymember
Bill Author
Profile
Liz OrtegaD
Assemblymember
Bill Author
Profile
Lola Smallwood-CuevasD
Senator
Bill Author
Profile
Aisha WahabD
Senator
Committee Member
Profile
Celeste RodriguezD
Assemblymember
Bill Author
Profile
Christopher CabaldonD
Senator
Committee Member
Profile
Laura RichardsonD
Senator
Committee Member

Similar Past Legislation

Bill NumberTitleIntroduced DateStatusLink to Bill
SB-756
Corporation Tax Law: credit: motion picture.
February 2025
Engrossed
SB-630
Income and corporate taxes: tax credits: motion pictures.
February 2025
Engrossed
AB-1138
Income and corporate taxes: tax credits: motion pictures.
February 2025
Passed
SB-132
Income taxes: tax credits: motion pictures: occupational safety: California Film Commission.
January 2023
Passed
Income taxes: credits: motion pictures.
February 2021
Failed
Personal income tax and corporation tax: Equitable Opportunities Film Credit.
February 2021
Failed
Income taxes: tax credits: motion picture credit: extension: diversity workplan.
February 2021
Failed
Taxes: credits: qualified motion pictures: certified studio construction projects: reports.
January 2021
Passed
Income taxes: credits: motion pictures.
February 2018
Failed
Taxes: credits: motion pictures: Legislative Analyst’s Office report.
January 2018
Failed
Showing 10 of 27 items
Page 1 of 3

Get Involved

Act Now!

Email the authors or create an email template to send to all relevant legislators.

Introduced By

Tina McKinnor
Tina McKinnorD
California State Assembly Member
Co-Authors
Lola Smallwood-Cuevas
Lola Smallwood-CuevasD
California State Senator
Liz Ortega
Liz OrtegaD
California State Assembly Member
Heath Flora
Heath FloraR
California State Assembly Member
Celeste Rodriguez
Celeste RodriguezD
California State Assembly Member
40% progression
Bill has passed all readings in its first house and is ready to move to the other house (6/2/2025)

Latest Voting History

July 9, 2025
PASS
Senate Committee
Senate Revenue and Taxation Hearing
AyesNoesNVRTotalResult
4015PASS

Key Takeaways

  • Eliminates the 'good faith effort' standard for film tax credits, requiring production companies to meet diversity goals.
  • Maintains the existing $330 million annual tax credit cap for qualified film and TV productions through 2029-30.
  • Requires productions to submit and achieve diversity workplan goals to receive an additional 4% tax credit.
  • Establishes a Career Pathways Training program funded by 0.5% of approved tax credits to train underserved communities.

Get Involved

Act Now!

Email the authors or create an email template to send to all relevant legislators.

Introduced By

Tina McKinnor
Tina McKinnorD
California State Assembly Member
Co-Authors
Lola Smallwood-Cuevas
Lola Smallwood-CuevasD
California State Senator
Liz Ortega
Liz OrtegaD
California State Assembly Member
Heath Flora
Heath FloraR
California State Assembly Member
Celeste Rodriguez
Celeste RodriguezD
California State Assembly Member

Summary

Assembly Member McKinnor, alongside a bipartisan group of co-authors, proposes significant changes to California's motion picture tax credit program that would strengthen diversity requirements for film and television productions seeking state tax incentives. The legislation modifies how production companies qualify for additional tax credits by eliminating the current "good faith effort" standard for meeting diversity goals.

Under the proposed changes, production companies must demonstrate actual achievement of their stated diversity objectives to receive the full tax credit allocation. The California Film Commission would evaluate whether productions have met specific diversity targets in their workforce composition and creative roles, rather than accepting evidence of attempted compliance. This represents a shift from the existing framework, which allows productions to qualify for additional credits by showing they made reasonable attempts to achieve diversity goals.

The bill maintains the program's core structure of providing tax credits worth up to 25% of qualified production expenses, with the base credit rate at 20% for most productions. Productions can still earn an additional 4% credit by meeting diversity targets, but would need to show concrete results rather than just documented efforts. The legislation preserves other existing incentives, including bonuses for filming outside the Los Angeles area and for visual effects work performed in California.

To support industry-wide diversity initiatives, the bill continues requiring productions to pay into a Career Pathways Training Program, with fees set at 0.5% of the approved credit amount for standard productions and 0.25% for independent films. This program provides technical skills training to individuals from underserved communities seeking to enter the film and television industry.

The changes would take effect for taxable years beginning on or after January 1, 2025, giving the industry time to adjust hiring and recruitment practices to meet the new standards. The California Film Commission would maintain oversight of the program, with expanded responsibilities for verifying diversity compliance and reporting outcomes to the Legislature.

40% progression
Bill has passed all readings in its first house and is ready to move to the other house (6/2/2025)

Key Dates

Next Step
Referred to the Senate Standing Committee on Appropriations
Next Step
Senate Committee
Referred to the Senate Standing Committee on Appropriations
Hearing has not been scheduled yet
Senate Revenue and Taxation Hearing
Senate Committee
Senate Revenue and Taxation Hearing
Do pass, but first be re-referred to the Committee on [Appropriations]
Vote on Assembly Floor
Assembly Floor
Vote on Assembly Floor
AB 1377 McKinnor Assembly Third Reading
Assembly Appropriations Hearing
Assembly Committee
Assembly Appropriations Hearing
Do pass
Assembly Revenue And Taxation Hearing
Assembly Committee
Assembly Revenue And Taxation Hearing
Do pass and be re-referred to the Committee on [Appropriations]
Assembly Arts, Entertainment, Sports, And Tourism Hearing
Assembly Committee
Assembly Arts, Entertainment, Sports, And Tourism Hearing
Do pass and be re-referred to the Committee on [Revenue and Taxation]
Introduced
Assembly Floor
Introduced
Introduced. To print.

Latest Voting History

July 9, 2025
PASS
Senate Committee
Senate Revenue and Taxation Hearing
AyesNoesNVRTotalResult
4015PASS

Contacts

Profile
Anna CaballeroD
Senator
Committee Member
Not Contacted
Not Contacted
Profile
Heath FloraR
Assemblymember
Bill Author
Not Contacted
Not Contacted
Profile
Tim GraysonD
Senator
Committee Member
Not Contacted
Not Contacted
Profile
Megan DahleR
Senator
Committee Member
Not Contacted
Not Contacted
Profile
Kelly SeyartoR
Senator
Committee Member
Not Contacted
Not Contacted
0 of 12 row(s) selected.
Page 1 of 3
Select All Legislators
Profile
Anna CaballeroD
Senator
Committee Member
Profile
Heath FloraR
Assemblymember
Bill Author
Profile
Tim GraysonD
Senator
Committee Member
Profile
Megan DahleR
Senator
Committee Member
Profile
Kelly SeyartoR
Senator
Committee Member
Profile
Tina McKinnorD
Assemblymember
Bill Author
Profile
Liz OrtegaD
Assemblymember
Bill Author
Profile
Lola Smallwood-CuevasD
Senator
Bill Author
Profile
Aisha WahabD
Senator
Committee Member
Profile
Celeste RodriguezD
Assemblymember
Bill Author
Profile
Christopher CabaldonD
Senator
Committee Member
Profile
Laura RichardsonD
Senator
Committee Member

Similar Past Legislation

Bill NumberTitleIntroduced DateStatusLink to Bill
SB-756
Corporation Tax Law: credit: motion picture.
February 2025
Engrossed
SB-630
Income and corporate taxes: tax credits: motion pictures.
February 2025
Engrossed
AB-1138
Income and corporate taxes: tax credits: motion pictures.
February 2025
Passed
SB-132
Income taxes: tax credits: motion pictures: occupational safety: California Film Commission.
January 2023
Passed
Income taxes: credits: motion pictures.
February 2021
Failed
Personal income tax and corporation tax: Equitable Opportunities Film Credit.
February 2021
Failed
Income taxes: tax credits: motion picture credit: extension: diversity workplan.
February 2021
Failed
Taxes: credits: qualified motion pictures: certified studio construction projects: reports.
January 2021
Passed
Income taxes: credits: motion pictures.
February 2018
Failed
Taxes: credits: motion pictures: Legislative Analyst’s Office report.
January 2018
Failed
Showing 10 of 27 items
Page 1 of 3