Politics & Government

Deals emerge on California film tax credit, ridesharing regulations

Gov. Jerry Brown and lawmakers on Wednesday touted deals on tax credits for films produced in California and new restrictions on ride-sharing companies, compromising on two prominent remaining issues as the legislative session hurtled to a close.

While both bills attracted debate about California’s economic competitiveness and spurred lobbying from powerful interests, they also centered on two markedly different industries: one old, one new.

Assembly Bill 1839 seeks to protect California’s film industry, dangling tax breaks to stanch the slow exodus of films to states that offer their own incentives. Assembly Bill 2293 would impose new controls on an ascendant business model that has displaced taxis by allowing people to transport people in their own cars, with the help of a Web app, for a fee.

The film tax credit bill was shaped by intense lobbying from the state’s TV and movie industries, with Los Angeles lawmakers in particular declaring the measure a priority. The agreement announced on Wednesday would expand to $330 million annually the state’s existing $100 million tax credit. The version working its way through the Legislature aimed higher, seeking to expand the tax credit to $400 million.

“This law will make key improvements in our Film and Television Tax Credit Program and put thousands of Californians to work,” Brown said in a statement.

Labor unions and lawmakers promoting the film tax credit said it could bring back to California productions that have left the state for more lucrative tax incentives elsewhere. Assembly Speaker Toni Atkins, D-San Diego, said in a prepared statement that the agreement is “just common sense – when California hosts more production, we get more jobs and more revenue – two things our state can always use.”

Recently launched businesses like Uber and Lyft had mounted a strenuous opposition campaign against legislation upping insurance requirements for the ride-sharing companies, warning that Sacramento was stifling innovation. Backed by insurance companies, Assembly Bill 2293 would have the transportation firms carry more comprehensive – and more expensive – insurance.

Both Uber and Lyft reversed to support the bill on Wednesday, heralding negotiations that lowered the cost of insurance they would be required to carry. When drivers are cruising in search of passengers but have not yet accepted ride requests, they would need to carry liability insurance worth at least $200,000, far lower than the $750,000 initially sought. The minimum rises to $1 million when a driver has accepted a request or picked up a passenger.

“We have agreed to a compromise that provides clarity for the ride-sharing community in California,” Lyft said in a statement.

The Senate passed AB 2293 30-4 later in the day. It now heads back to the Assembly for a final vote before steering toward Brown’s desk.

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