The California State Assembly has overwhelmingly passed the Hollywood Tax Incentives Bill, a measure aimed at reinvigorating the state’s beleaguered film and television production sector.
Despite a glaring omission of Governor Gavin Newsom’s proposed $750 million program cap, the bill cleared the Assembly with a 73-to-1 vote on Tuesday, signaling strong bipartisan support.
Broad Support for Film and Television Incentives
AB 1138, known formally as the Hollywood Tax Incentives Bill, now heads to the state Senate after gaining near-unanimous approval.
Assembly member Carl DeMaio of San Diego cast the lone dissenting vote.
The legislation follows the passage of a similar bill in the Senate earlier the same day.
Both measures are designed to expand California’s entertainment tax credit program without yet incorporating the governor’s promised financial ceiling.
A Bid to Counter Production Flight
Supporters of the Hollywood Tax Incentives Bill argue that California’s once-dominant film industry is in crisis, suffering from historic levels of unemployment and business losses.
“California’s iconic film and television industry is in crisis,” said Assemblymember Rick Zbur, co-author of the bill, who represents parts of Los Angeles including Hollywood and Santa Monica.
“The hardworking men and women…are experiencing depression-level-eras of unemployment as our iconic business is being lured away to other states and countries.”
Assemblymembers Tom Lackey, Mike Gibson, and Sharon Quirk-Silva echoed Zbur’s sentiments, positioning the bill as a crucial step in a broader strategy to retain middle-class jobs in California.
“This legislation won’t save Hollywood, but it gives us a chance to compete,” said Lackey, who represents the High Desert region.
Political Friction Over Incentive Strategy
Assemblymember Carl DeMaio sharply criticized the Hollywood Tax Incentives Bill, describing it as an ineffective and politically motivated handout. “We should make California prosperous for all,” DeMaio said, accusing the bill of rewarding powerful Hollywood interests. “Nothing in this bill deals with labor costs, nothing deals with the regulatory burden,” he added.
DeMaio contended that unionization and regulatory hurdles, not insufficient tax credits, are driving productions out of state. He characterized the measure as a political gesture rather than a meaningful economic reform.
Governor’s Budget and the Missing $750 Million Cap
The bill notably omits any reference to the $750 million annual program cap championed by Governor Newsom. That figure remains intact in the governor’s revised May budget, which proposes expanded incentives even as other services—such as Medi-Cal benefits for undocumented immigrants and coverage for weight-loss medications—face potential cuts.
Despite its absence from the legislative text, bill advocates insist the cap does not need to be codified within the bill itself, provided it survives the budget approval process.
Expanded Workforce Training Provisions
One component of the Hollywood Tax Incentives Bill includes an expansion of training programs aimed at historically underrepresented communities. The amended legislation allows additional nonprofits to participate, potentially widening access to behind-the-camera careers in film and television.
Continued Advocacy from Unions and Industry Groups
Entertainment industry unions and advocacy groups such as Stay in L.A. are actively lobbying for the bill’s passage in the Senate and final budget reconciliation. Members have been urged to contact their representatives, underscoring that Tuesday’s Assembly vote is only one step in a longer legislative journey.
“This is one of the many steps we have ahead of us,” a coalition of entertainment unions said in a joint statement. The final form of the Hollywood Tax Incentives Bill—and whether it includes Newsom’s full funding proposal—will likely depend on upcoming negotiations over the state budget.
