Legislative Committee – March 8, 2022
Assembly Bill 2097 – Residential and Commercial Development: Remodeling, Renovations, and Additions: Parking Requirements
1 Recommendation
Legislative Committee recommend the City Council adopt an “oppose” position regarding Assembly Bill 2097.
Summary
Authored by Assembly Member Laura Friedman (D-43-Glendale), Assembly Bill 2097 prohibits a local government from imposing a minimum parking requirement on residential, commercial, or other development if the development is located within a one-half mile walking distance of public transit.
Background
Under current law, local governments have the authority to adopt minimum parking standards and impose those standards on developments built within their jurisdiction, as long as they are consistent with state law standards. Chapter 17.42, Residential Use Types, of the City’s Municipal Code, includes the following parking standards:
a. Single family unit – two enclosed parking spaces
b. Two family units – two enclosed parking spaces per unit c. Studio units – one enclosed parking space per unit
d. One-bedroom units – two enclosed parking spaces per unit e. Two-bedroom units – two enclosed parking spaces per unit f. Guest parking – one parking space per each two units g. Mobile home park – two spaces per unit, plus one guest per two units This bill would preempt the aforementioned parking standards for any development that is located within a one-half mile walking distance of public transit or located within a low-vehicle miles traveled area. As prescribed in this bill, public transit includes high-quality transit corridors and major transit stops, as defined by state law.
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Communication: Assembly Bill 2097 - Staff Report (ITEM 1 ASSEMBLY BILL 2097: RESIDENTIAL AND COMMERCIAL DEVELOPMENT:
2 State law defines a “high-quality transit corridor” as a corridor with fixed route bus service with service intervals no longer than 15 minutes during peak commute hours.
State law defines a “major transit stop” as an existing rail or bus rapid transit station or the intersection of two or more bus routes with a frequency of service interval of 15 minutes or less during peak commute hours.
Analysis
The City’s three existing Metrolink stations (Via Princessa, Santa Clarita, and Newhall) and one future station (Vista Canyon) are all “major transit stops,” as defined by state law. The City would be restricted from imposing minimum parking requirements to developments within one-half mile of the four Metrolink stations and the following three corridors:
1. Soledad Canyon Road/Valencia Boulevard (beginning at the Santa Clarita Metrolink station and ending at McBean Parkway.)
2. Lyons Avenue (beginning at Railroad Avenue and ending at Wiley Canyon Road)
3. Newhall Avenue (beginning at Lyons Avenue and ending at Sierra Highway) The City imposes minimum on-site parking requirements to ensure that residents and customers have adequate and reasonable access to homes and businesses. Additionally, the standards serve as a safeguard to prevent congestion of vehicle parking that may cause unsafe conditions for surrounding residents and businesses and access challenges for emergency personnel, especially in the event of an emergency evacuation.
The City Council, upon the recommendation of the Legislative Committee, opposed a similar bill, Assembly Bill 1401 (Friedman), at the April 27, 2021, regular City Council meeting.
Additionally, the recommendation to oppose Assembly Bill 2097 is consistent with the City of Santa Clarita 2022 Executive and Legislative Platform. Specifically, Component 1 under the “State” section advises that the City Council, “Oppose legislation that would interfere with, limit or eliminate the decision-making authority of municipalities in the area of local land use.” Supporters
Unknown at this time.
Opponents
Unknown at this time.
Bill Status
Assembly Bill 2097 was introduced on February 14, 2022, and may be heard in committee beginning on March 17, 2022.
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Communication: Assembly Bill 2097 - Staff Report (ITEM 1 ASSEMBLY BILL 2097: RESIDENTIAL AND COMMERCIAL DEVELOPMENT:
california legislature—2021–22 regular session
ASSEMBLY BILL No. 2097
Introduced by Assembly Member Friedman
(Coauthor: Assembly Member Lee)
(Coauthors: Senators Skinner and Wiener)
February 14, 2022
An act to add Section 65863.2 to the Go vernment Code, relating to land use.
legislative counsel’s digest
AB 2097, as introduced, Friedman. Residential and commercial development: remodeling, reno vations, and additions: parking requirements.
The Planning and Zoning Law requires each county and city to adopt a comprehensive, long-term general plan for its physical development, and the de velopment of certain lands outside its boundaries, that includes, among other mandatory elements, a land use element and a conservation element. Existing law also permits variances to be granted from the parking requirements of a zoning ordinance for nonresidential development if the v ariance will be an incenti ve to the de velopment and the variance will facilitate access to the development by patrons of public transit facilities.
This bill would prohibit a public agency from imposing a minimum automobile parking requirement, or enforcing a minimum automobile parking requirement, on residential, commercial, or other development if the development is located on a parcel that is within one-half mile of public transit, as defined. When a project provides parking voluntarily, the bill w ould authorize a public agenc y to impose specified requirements on the v oluntary parking. The bill would prohibit these
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Communication: Assembly Bill 2097 - Bill Text (ITEM 1 ASSEMBLY BILL 2097: RESIDENTIAL AND COMMERCIAL DEVELOPMENT:
provisions from reducing, eliminating, or precluding the enforcement of any requirement imposed on a ne w multifamily or nonresidential development to pro vide electric v ehicle supply equipment installed parking spaces or parking spaces that are accessible to persons with disabilities. The bill w ould e xempt certain commercial parking requirements from these provisions if the requirements of the bill conflict with an existing contractual agreement of the public agenc y that was executed before January 1, 2023.
By changing the duties of local planning officials, this bill w ould impose a state-mandated local program.
The bill w ould include findings that changes proposed by this bill address a matter of state wide concern rather than a municipal af fair and, therefore, apply to all cities, including charter cities.
The California Constitution requires the state to reimb urse local agencies and school districts for certain costs mandated by the state.
Statutory provisions establish procedures for making that reimbursement.
This bill would provide that no reimbursement is required by this act for a specified reason.
Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: yes.
The people of the State of California do enact as follows:
line 1 SECTION 1. Section 65863.2 is added to the Government line 2 Code, to read:
line 3 65863.2. (a) A public agenc y shall not impose a minimum line 4 automobile parking requirement, or enforce a minimum automobile line 5 parking requirement, on residential, commercial, or other line 6 development if the parcel is located within one-half mile of public line 7 transit.
line 8 (b) When a project provides parking voluntarily, a public agency line 9 may impose requirements on that v oluntary parking to require line 10 spaces for car share vehicles, require spaces to be shared with the line 11 public, or require parking owners to charge for parking. line 12 (c) Subdivision (a) shall not reduce, eliminate, or preclude the line 13 enforcement of an y requirement imposed on a ne w multifamily line 14 residential or nonresidential development to provide electric vehicle line 15 supply equipment installed parking spaces or parking spaces that line 16 are accessible to persons with disabilities that would have otherwise line 17 applied to the development if this section did not apply. 99 — 2 — AB 2097
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Communication: Assembly Bill 2097 - Bill Text (ITEM 1 ASSEMBLY BILL 2097: RESIDENTIAL AND COMMERCIAL DEVELOPMENT:
line 1 (d) (1) Subdivision (a) shall not apply to commercial parking line 2 requirements if it conflicts with an existing contractual agreement line 3 of the public agenc y that w as executed before January 1, 2023, line 4 provided that all of the required commercial parking is shared with line 5 the public. This subdivision shall apply to an existing contractual line 6 agreement that is amended after January 1, 2023, pro vided that line 7 the amendments do not increase commercial parking requirements. line 8 (2) A project may v oluntarily build additional parking that is line 9 not shared with the public.
line 10 (e) For purposes of this section, “public transit” means an y of line 11 the following:
line 12 (1) A high-quality transit corridor as defined in subdivision (b) line 13 of Section 21155 of the Public Resources Code, except that it also line 14 includes a high-quality transit corridor included in an applicable line 15 regional transportation plan.
line 16 (2) A major transit stop as defined in Section 21064.3 of the line 17 Public Resources Code, except that it also includes a major transit line 18 stop that is included in an applicable regional transportation plan. line 19 (f) The Legislature finds and declares that this section addresses line 20 a matter of statewide concern rather than a municipal affair as that line 21 term is used in Section 5 of Article XI of the California line 22 Constitution. Therefore, this section applies to all cities, including line 23 charter cities.
line 24 SEC. 2. No reimbursement is required by this act pursuant to line 25 Section 6 of Article XIIIB of the California Constitution because line 26 a local agency or school district has the authority to le vy service line 27 charges, fees, or assessments sufficient to pay for the program or line 28 level of service mandated by this act, within the meaning of Section line 29 17556 of the Government Code.
O
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Communication: Assembly Bill 2097 - Bill Text (ITEM 1 ASSEMBLY BILL 2097: RESIDENTIAL AND COMMERCIAL DEVELOPMENT:
Legislative Committee – March 8, 2022
Senate Bill 485 – Income Taxes: Tax Credits: Motion Picture Credit Extension 1 Recommendation
Legislative Committee recommend the City Council adopt a “support” position regarding Senate Bill 485.
Summary
Authored by Senator Anthony Portantino (D-25-La Cañada Flintridge), Senate Bill 485 extends the California Film and Television Tax Credit Program for five additional fiscal years through July 1, 2030.
In 2009, the state legislature passed the California Film and Television Tax Credit Program in an effort to promote film production and create and retain jobs in California. The California Film and Television Tax Credit Program (tax credit program) is scheduled to sunset on July 1, 2025. This bill would extend the tax credit through July 1, 2030.
The tax credit program has played a significant role in incentivizing and retaining film and television production companies in California. At the local level, the City of Santa Clarita (City) has approved 191 tax credit approved featured films and television shows since the implementation of the tax credit program. Additionally, nearly 22 different tax credit approved feature films and television shows have or are currently based at sound stages in the City. To date, on-location filming from tax credit approved projects that have filmed in the City has resulted in an estimated $81,600,000 in economic benefit to the community.
The tax credit program has also created many jobs in the film and production industry in the City. One example of this is the television show “Star Trek Picard,” which was based at Santa Clarita Studios for three seasons and filmed on location all around Santa Clarita Valley. According to the California Film Commission, production of tax credit approved shows, like “Star Trek Picard,” resulted in creation of over 161,000 jobs throughout California, as result of the program to date.
Moreover, many motion picture and television production companies make decisions regarding the location of their film project a year or more in advance. This bill would establish the certainty of the tax credit program for the next eight fiscal years and allow for film and television production companies to remain in California.
The recommendation to support Senate Bill 485 is consistent with the City of Santa Clarita 2022 Executive and Legislative Platform. Specifically, Component 37 under the “State” section of the Packet Pg. 9
Communication: Senate Bill 485 - Staff Report (ITEM 2 SENATE BILL 485: INCOME TAXES: TAX CREDITS: MOTION PICTURE CREDIT 2 Legislative Platform advises that the City Council, “Support legislation that will preserve or enhance the tools, incentives, and programs utilized by local governments and the state that will keep filming in California.”
Notable Supporters
California Labor Federation, AFL-CIO; Entertainment Union Coalition; Motion Picture Association; Writers Guild of America West
Notable Opponents
None on File
Bill Status
Senate Bill 485 was introduced on February 17, 2021, and passed the Senate Floor (36-0-4) on January 24, 2022. Senator Scott Wilk (R-21-Santa Clarita) and Senator Henry Stern (D-27-Los Angeles) voted in support of Senate Bill 485 on the Senate Floor. As of the development of this report, Senate Bill 485 was pending committee assignment in the Assembly.
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Communication: Senate Bill 485 - Staff Report (ITEM 2 SENATE BILL 485: INCOME TAXES: TAX CREDITS: MOTION PICTURE CREDIT AMENDED IN SENATE JANUARY 3, 2022
AMENDED IN SENATE MAY 20, 2021
AMENDED IN SENATE MAY 11, 2021
AMENDED IN SENATE APRIL 29, 2021
AMENDED IN SENATE MARCH 10, 2021
SENATE BILL No. 485
Introduced by Senator Portantino
(Principal coauthor: Senator Stern)
(Principal coauthors: Senators Stern and Wilk)
(Principal coauthors: Assembly Members Burke and Carrillo) (Coauthor: Senator Durazo)
(Coauthor: Assembly Member Villapudua)
February 17, 2021
An act to amend Sections 17053.98 and 23698 of, and to add Section 17053.99 to, of the Revenue and Taxation Code, relating to taxation, to take effect immediately, tax levy.
legislative counsel’s digest
SB 485, as amended, Portantino. Income taxes: tax credits: certified studio construction project. motion picture credit extension.
The Personal Income Tax Law and the Corporation Tax Law allow various credits ag ainst the tax es imposed by those la ws, including a motion picture credit for taxable years beginning on or after January 1, 2020, to be allocated by the California Film Commission on or after July 1, 2020, and before July 1, 2025, in an amount equal to 20% or 25% of qualified expenditures for the production of a qualified motion picture in this state, with additional credit amounts allowed, including
Corrected 1-6-22—See last page. 94
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Communication: Senate Bill 485 - Bill Text (ITEM 2 SENATE BILL 485: INCOME TAXES: TAX CREDITS: MOTION PICTURE CREDIT EXTENSION) for amounts equal to specified qualified e xpenditures and qualified wages relating to original photograph y outside the Los Angeles zone, as specified. Existing law limits the a ggregate amount of cr edits that may be allocated to specified amounts per fiscal year , and sets forth allocation percentages for various productions under the motion picture credit.
This bill, for taxable years beginning on or after January 1, 2022, and before January 1, 2032, would allow a tax credit in an amount equal to 20% or 25% of qualified expenditures for the production of a qualified motion picture in this state at a certified studio construction project.
The bill would provide that the credits be allocated by the California Film Commission in the same manner and time period as the e xisting motion picture credit. The bill w ould define a “certified studio construction project” for these purposes as a project that pro vides for the construction or reno vation of one or more soundstages located in the state, as specified, and w ould require a de veloper seeking certification of a studio construction project to mak e v arious certifications to the commission, including that the project is a public work or pays the equivalent of prevailing wages, as provided, and uses a skilled and trained w orkforce, as defined. By requiring a de veloper to make specified certifications to the commission, which expands the scope of the crime of perjury, the bill would impose a state-mandated local program.
The California Constitution requires the state to reimb urse local agencies and school districts for certain costs mandated by the state.
Statutory provisions establish procedures for making that reimbursement.
This bill would provide that no reimbursement is required by this act for a specified reason.
This bill would e xtend the period during whic h the commission allocates the abo ve-described motion pictur e credits through July 1, 2030. The bill would also e xtend the application of the limit on the aggregate amount of credits that may be allocated through the 2029–30 fiscal year and would make conforming changes.
This bill would take effect immediately as a tax levy.
Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: yes no.
94 — 2 — SB 485
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Communication: Senate Bill 485 - Bill Text (ITEM 2 SENATE BILL 485: INCOME TAXES: TAX CREDITS: MOTION PICTURE CREDIT EXTENSION) The people of the State of California do enact as follows:
line 1 SECTION 1. Section 17053.98 of the Revenue and Taxation line 2 Code is amended to read:
line 3 17053.98. (a) (1) For taxable years be ginning on or after line 4 January 1, 2020, there shall be allo wed to a qualified taxpayer a line 5 credit against the “net tax,” as defined in Section 17039, subject line 6 to a computation and ranking by the California Film Commission line 7 in subdivision (g) and the allocation amount categories described line 8 in subdivision (i), in an amount equal to 20 percent or 25 percent, line 9 whichever is the applicable credit percentage described in line 10 paragraph (4), of the qualified expenditures for the production of line 11 a qualified motion picture in California. A credit shall not be line 12 allowed under this section for an y qualified expenditures for the line 13 production of a motion picture in California if a credit has been line 14 claimed for those same e xpenditures under Section 17053.85 or line 15 17053.95.
line 16 (2) Except as otherwise provided in this section, the credit shall line 17 be allo wed for the taxable year in which the California Film line 18 Commission issues the credit certificate pursuant to subdi vision line 19 (g) for the qualified motion picture, but in no instance prior to July line 20 1, 2020, and shall be for the applicable percentage of all qualified line 21 expenditures paid or incurred by the qualified taxpayer in all line 22 taxable years for that qualified motion picture. line 23 (3) (A) The amount of the credit allowed to a qualified taxpayer line 24 shall be limited to the amount specified in the credit certificate line 25 issued to the qualified taxpayer by the California Film Commission line 26 pursuant to subdivision (g).
line 27 (B) In determining the amount specified in the credit certificate line 28 in subparagraph (A), the California Film Commission shall be line 29 limited to the following amounts of qualified expenditures for each line 30 qualified motion picture:
line 31 (i) In the case of a feature, up to one hundred million dollars line 32 ($100,000,000).
line 33 (ii) In the case of a miniseries described in clause (ii) of line 34 subparagraph (A) of paragraph (18) of subdivision (b), up to one line 35 hundred million dollars ($100,000,000).
line 36 (iii) In the case of a television series described in clause (iii) or line 37 clause (v) of subparagraph (A) of paragraph (18) of subdi vision line 38 (b), up to one hundred million dollars ($100,000,000) per season. 94 SB 485 — 3 —
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Communication: Senate Bill 485 - Bill Text (ITEM 2 SENATE BILL 485: INCOME TAXES: TAX CREDITS: MOTION PICTURE CREDIT EXTENSION) line 1 (iv) In the case of an independent film, up to ten million dollars line 2 ($10,000,000).
line 3 (4) For purposes of paragraphs (1) and (2), the applicable credit line 4 percentage shall be:
line 5 (A) Twenty percent of the qualified e xpenditures attributable line 6 to the production of a qualified motion picture in California, line 7 including, but not limited to, a feature or a tele vision series that line 8 relocated to California that is in its second or subsequent years of line 9 receiving a tax credit allocation pursuant to this section, Section line 10 17053.85, or Section 17053.95.
line 11 (B) Twenty-five percent of the qualified e xpenditures line 12 attributable to the production of a qualified motion picture in line 13 California where the qualified motion picture is a television series line 14 that relocated to California in its first year of receiving a tax credit line 15 allocation pursuant to this section.
line 16 (C) Twenty-five percent of the qualified e xpenditures line 17 attributable to the production of a qualified motion picture that is line 18 an independent film.
line 19 (D) Additional credits shall be allowed for the production of a line 20 qualified motion picture whose applicable credit percentage is line 21 determined pursuant to subparagraph (A), in an aggregate amount line 22 not to e xceed 5 percent of the qualified e xpenditures under that line 23 subparagraph, as follows:
line 24 (i) (I) Five percent of qualified expenditures, excluding qualified line 25 wages described in subparagraph (E), relating to original line 26 photography outside the Los Angeles zone.
line 27 (II) For purposes of this clause and subparagraph (E):
line 28 (ia) “Applicable period” means the period that commences with line 29 preproduction and ends when original photography concludes. The line 30 applicable period includes the time necessary to strik e a remote line 31 location and return to the Los Angeles zone.
line 32 (ib) “Los Angeles zone” means the area within a circle 30 miles line 33 in radius from Beverly Boulevard and La Cienega Boulevard, Los line 34 Angeles, California, and includes Agua Dulce, Castaic, including line 35 Castaic Lak e, Leo Carrillo State Beach, Ontario International line 36 Airport, Piru, and Pomona, including the Los Angeles County line 37 Fairgrounds. The Metro-Goldwyn-Mayer , Inc. Conejo Ranch line 38 property is within the Los Angeles zone.
line 39 (ic) “Original photography” includes principal photography and line 40 reshooting original footage.
94 — 4 — SB 485
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Communication: Senate Bill 485 - Bill Text (ITEM 2 SENATE BILL 485: INCOME TAXES: TAX CREDITS: MOTION PICTURE CREDIT EXTENSION) line 1 (id) “Qualified expenditures relating to original photograph y line 2 outside the Los Angeles zone” means amounts paid or incurred line 3 during the applicable period for tangible personal property line 4 purchased or leased and used or consumed outside the Los Angeles line 5 zone and relating to original photography outside the Los Angeles line 6 zone and qualified wages paid for services performed outside the line 7 Los Angeles zone and relating to original photography outside the line 8 Los Angeles zone.
line 9 (ii) Five percent of the qualified e xpenditures relating to line 10 qualified visual effects attributable to the production of a qualified line 11 motion picture in California.
line 12 (E) (i) Notwithstanding subparagraph (D), an amount equal to line 13 10 percent of qualified wages paid for services performed relating line 14 to original photograph y outside of the Los Angeles zone to line 15 qualified individuals who reside in California but outside the Los line 16 Angeles zone shall be allo wed as an additional credit for the line 17 production of a qualified motion picture whose applicable credit line 18 percentage is determined pursuant to subparagraph (A). line 19 (ii) Notwithstanding subparagraph (D), an amount equal to 5 line 20 percent of qualified wages paid for services performed relating to line 21 original photography outside of the Los Angeles zone to qualified line 22 individuals who reside in California b ut outside the Los Angeles line 23 zone shall be allowed as an additional credit for the production of line 24 a qualified motion picture whose applicable credit percentage is line 25 determined pursuant to subparagraph (B) or (C). line 26 (b) For purposes of this section:
line 27 (1) “Ancillary product” means any article for sale to the public line 28 that contains a portion of, or any element of, the qualified motion line 29 picture.
line 30 (2) “Budget” means an estimate of all expenses paid or incurred line 31 during the production period of a qualified motion picture. It shall line 32 be the same budget used by the qualified taxpayer and production line 33 company for all qualified motion picture purposes. line 34 (3) “Clip use” means a use of any portion of a motion picture, line 35 other than the qualified motion picture, used in the qualified motion line 36 picture.
line 37 (4) “Credit certificate” means the certificate issued by the line 38 California Film Commission pursuant to subparagraph (D) of line 39 paragraph (3) of subdivision (g).
94 SB 485 — 5 —
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Communication: Senate Bill 485 - Bill Text (ITEM 2 SENATE BILL 485: INCOME TAXES: TAX CREDITS: MOTION PICTURE CREDIT EXTENSION) line 1 (5) (A) “Employee fringe benefits” means the amount allowable line 2 as a deduction under this part to the qualified taxpayer in volved line 3 in the production of the qualified motion picture, exclusive of any line 4 amounts contrib uted by emplo yees, for an y year during the line 5 production period with respect to any of the following:
line 6 (i) Employer contributions under an y pension, profit-sharing, line 7 annuity, or similar plan.
line 8 (ii) Employer-provided coverage under any accident or health line 9 plan for employees.
line 10 (iii) The employer’s cost of life or disability insurance provided line 11 to employees.
line 12 (B) Any amount treated as w ages under clause (i) of line 13 subparagraph (A) of paragraph (21) shall not be taken into account line 14 under this paragraph.
line 15 (6) “Independent film” means a motion picture with a minimum line 16 budget of one million dollars ($1,000,000) that is produced by a line 17 company that is not publicly traded and publicly traded companies line 18 do not o wn, directly or indirectly , more than 25 percent of the line 19 producing company.
line 20 (7) “Jobs ratio” means the amount of qualified w ages paid to line 21 qualified indi viduals di vided by the amount of tax credit, not line 22 including any additional credit allowed pursuant to subparagraphs line 23 (D) and (E) of paragraph (4) of subdi vision (a), as computed by line 24 the California Film Commission. F or the purposes of the line 25 calculation of the jobs ratio only , 70 percent of qualified line 26 expenditures for visual effects paid to third-party vendors for work line 27 performed in California shall be deemed to be qualified w ages line 28 paid to a qualified individual.
line 29 (8) “Licensing” means an y grant of rights to distrib ute the line 30 qualified motion picture, in whole or in part.
line 31 (9) “New use” means any use of a motion picture in a medium line 32 other than the medium for which it was initially created. line 33 (10) “Pilot for a new television series” means the initial episode line 34 produced for a proposed television series.
line 35 (11) (A) “Postproduction” means the final acti vities in a line 36 qualified motion picture’ s production, including editing, fole y line 37 recording, automatic dialogue replacement, sound editing, scoring, line 38 music track recording by musicians and music editing, beginning line 39 and end credits, ne gative cutting, ne gative processing and 94 — 6 — SB 485
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Communication: Senate Bill 485 - Bill Text (ITEM 2 SENATE BILL 485: INCOME TAXES: TAX CREDITS: MOTION PICTURE CREDIT EXTENSION) line 1 duplication, the addition of sound and visual effects, sound mixing, line 2 film-to-tape transfers, encoding, and color correction. line 3 (B) “Postproduction” does not include the manuf acture or line 4 shipping of release prints or their equivalent.
line 5 (12) “Preproduction” means the process of preparation for actual line 6 physical production which begins after a qualified motion picture line 7 has recei ved a firm agreement of financial commitment, or is line 8 greenlit, with, for e xample, the establishment of a dedicated line 9 production office, the hiring of key crew members, and includes, line 10 but is not limited to, acti vities that include location scouting and line 11 execution of contracts with vendors of equipment and stage space. line 12 (13) “Principal photography” means the phase of production line 13 during which the motion picture is actually shot, as distinguished line 14 from preproduction and postproduction.
line 15 (14) “Production period” means the period be ginning with line 16 preproduction and ending upon completion of postproduction. line 17 (15) “Qualified entity” means a personal service corporation as line 18 defined in Section 269A(b)(1) of the Internal Re venue Code, a line 19 payroll services corporation, or any entity receiving qualified wages line 20 with respect to services performed by a qualified individual. line 21 (16) “Qualified expenditures” means amounts paid or incurred line 22 for tangible personal property purchased or leased, and used, within line 23 this state in the production of a qualified motion picture and line 24 payments, including qualified wages, for services performed within line 25 this state in the production of a qualified motion picture. line 26 (17) (A) “Qualified indi vidual” means an y indi vidual who line 27 performs services during the production period in an activity related line 28 to the production of a qualified motion picture. line 29 (B) “Qualified indi vidual” shall not include either of the line 30 following:
line 31 (i) Any individual related to the qualified taxpayer as described line 32 in subparagraph (A), (B), or (C) of Section 51(i)(1) of the Internal line 33 Revenue Code.
line 34 (ii) Any 5-percent owner, as defined in Section 416(i)(1)(B) of line 35 the Internal Revenue Code, of the qualified taxpayer. line 36 (18) (A) “Qualified motion picture” means a motion picture line 37 that is produced for distrib ution to the general public, re gardless line 38 of medium, that is one of the following:
line 39 (i) A feature with a minimum production budget of one million line 40 dollars ($1,000,000).
94 SB 485 — 7 —
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Communication: Senate Bill 485 - Bill Text (ITEM 2 SENATE BILL 485: INCOME TAXES: TAX CREDITS: MOTION PICTURE CREDIT EXTENSION) line 1 (ii) A miniseries consisting of two or more episodes, each longer line 2 than 40 minutes of running time, e xclusive of commercials, that line 3 is produced in California, with a minimum production b udget of line 4 one million dollars ($1,000,000) per episode.
line 5 (iii) A new television series of episodes longer than 40 minutes line 6 each of running time, exclusive of commercials, that is produced line 7 in California, with a minimum production b udget of one million line 8 dollars ($1,000,000) per episode.
line 9 (iv) An independent film.
line 10 (v) A television series that relocated to California. line 11 (vi) A pilot for a ne w television series that is longer than 40 line 12 minutes of running time, exclusive of commercials, that is produced line 13 in California, and with a minimum production b udget of one line 14 million dollars ($1,000,000).
line 15 (B) To qualify as a “qualified motion picture, ” all of the line 16 following conditions shall be satisfied:
line 17 (i) At least 75 percent of the principal photography days occur line 18 wholly in California or 75 percent of the production b udget is line 19 incurred for payment for services performed within the state and line 20 the purchase or rental of property used within the state. line 21 (ii) Production of the qualified motion picture is completed line 22 within 30 months from the date on which the qualified taxpayer’s line 23 application is approved by the California Film Commission. F or line 24 purposes of this section, a qualified motion picture is “completed” line 25 when the process of postproduction has been finished. line 26 (iii) The copyright for the motion picture is registered with the line 27 United States Copyright Office pursuant to Title 17 of the United line 28 States Code.
line 29 (iv) Principal photograph y of the qualified motion picture line 30 commences after the date on which the application is approved by line 31 the California Film Commission, but no later than 180 days after line 32 the date of that approval if the qualified motion picture has a budget line 33 with qualified expenditures of less than one hundred million dollars line 34 ($100,000,000), and no later than 240 days after the date of that line 35 approval in the case of a qualified motion picture with a b udget line 36 of qualified expenditures with at least one hundred million dollars line 37 ($100,000,000), unless death, disability , or disfigurement of the line 38 director or of a principal cast member; an act of God, including, line 39 but not limited to, fire, flood, earthquake, storm, hurricane, or other line 40 natural disaster; terrorist acti vities; or go vernment sanction has 94 — 8 — SB 485
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Communication: Senate Bill 485 - Bill Text (ITEM 2 SENATE BILL 485: INCOME TAXES: TAX CREDITS: MOTION PICTURE CREDIT EXTENSION) line 1 directly pre vented a production’ s ability to be gin principal line 2 photography within the prescribed 180- or 240-day commencement line 3 period.
line 4 (C) For the purposes of subparagraph (A), in computing the line 5 total w ages paid or incurred for the production of a qualified line 6 motion picture, all amounts paid or incurred by all persons or line 7 entities that share in the costs of the qualified motion picture shall line 8 be aggregated.
line 9 (D) “Qualified motion picture” shall not include commercial line 10 advertising, music videos, a motion picture produced for pri vate line 11 noncommercial use, such as weddings, graduations, or as part of line 12 an educational course and made by students, a ne ws program, line 13 current events or public e vents program, talk sho w, game show, line 14 sporting e vent or acti vity, a wards sho w, telethon or other line 15 production that solicits funds, reality television program, clip-based line 16 programming if more than 50 percent of the content is comprised line 17 of licensed footage, documentaries, v ariety programs, daytime line 18 dramas, strip shows, one-half hour (air time) episodic tele vision line 19 shows, or an y production that f alls within the recordk eeping line 20 requirements of Section 2257 of Title 18 of the United States Code. line 21 (19) (A) “Qualified taxpayer” means a taxpayer who has paid line 22 or incurred qualified e xpenditures, participated in the Career line 23 Readiness requirement in Section 17053.95, and has been issued line 24 a credit certificate by the California Film Commission pursuant line 25 to subdivision (g).
line 26 (B) In the case of an y pass-thru entity , the determination of line 27 whether a taxpayer is a qualified taxpayer under this section shall line 28 be made at the entity level and any credit under this section is not line 29 allowed to the pass-thru entity, but shall be passed through to the line 30 partners or shareholders in accordance with applicable provisions line 31 of P art 10 (commencing with Section 17001) or P art 11 line 32 (commencing with Section 23001). For purposes of this paragraph, line 33 “pass-thru entity” means any entity taxed as a partnership or “S” line 34 corporation.
line 35 (20) “Qualified visual ef fects” means visual ef fects where at line 36 least 75 percent or a minimum of ten million dollars ($10,000,000) line 37 of the qualified e xpenditures for the visual ef fects is paid or line 38 incurred in California.
line 39 (21) (A) “Qualified wages” means all of the following:
94 SB 485 — 9 —
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Communication: Senate Bill 485 - Bill Text (ITEM 2 SENATE BILL 485: INCOME TAXES: TAX CREDITS: MOTION PICTURE CREDIT EXTENSION) line 1 (i) Any w ages subject to withholding under Di vision 6 line 2 (commencing with Section 13000) of the Unemployment Insurance line 3 Code that were paid or incurred by an y taxpayer involved in the line 4 production of a qualified motion picture with respect to a qualified line 5 individual for services performed on the qualified motion picture line 6 production within this state.
line 7 (ii) The portion of any employee fringe benefits paid or incurred line 8 by any taxpayer involved in the production of the qualified motion line 9 picture that are properly allocable to qualified w age amounts line 10 described in clauses (i), (iii), and (iv).
line 11 (iii) Any payments made to a qualified entity for services line 12 performed in this state by qualified individuals within the meaning line 13 of paragraph (17).
line 14 (iv) Remuneration paid to an independent contractor who is a line 15 qualified individual for services performed within this state by that line 16 qualified individual.
line 17 (B) “Qualified wages” shall not include any of the following:
line 18 (i) Expenses, including w ages, related to ne w use, reuse, clip line 19 use, licensing, secondary mark ets, or residual compensation, or line 20 the creation of any ancillary product, including, but not limited to, line 21 a soundtrack album, toy, game, trailer, or teaser. line 22 (ii) Expenses, including wages, paid or incurred with respect to line 23 acquisition, development, turnaround, or any rights thereto. line 24 (iii) Expenses, including wages, related to financing, overhead, line 25 marketing, promotion, or distribution of a qualified motion picture. line 26 (iv) Expenses, including wages, paid per person per qualified line 27 motion picture for writers, directors, music directors, music line 28 composers, music supervisors, producers, and performers, other line 29 than background actors with no scripted lines.
line 30 (22) “Residual compensation” means supplemental line 31 compensation paid at the time that a motion picture is e xhibited line 32 through ne w use, reuse, clip use, or in secondary mark ets, as line 33 distinguished from payments made during production. line 34 (23) “Reuse” means any use of a qualified motion picture in the line 35 same medium for which it w as created, following the initial use line 36 in that medium.
line 37 (24) “Secondary markets” means media in which a qualified line 38 motion picture is exhibited following the initial media in which it line 39 is exhibited.
94 — 10 — SB 485
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Communication: Senate Bill 485 - Bill Text (ITEM 2 SENATE BILL 485: INCOME TAXES: TAX CREDITS: MOTION PICTURE CREDIT EXTENSION) line 1 (25) “Television series that relocated to California” means a line 2 television series, without regard to episode length or initial media line 3 exhibition, with a minimum production b udget of one million line 4 dollars ($1,000,000) per episode, that filmed at least 75 percent of line 5 principal photography days in its most recent season outside of line 6 California or has filmed all seasons outside of California and for line 7 which the taxpayer certifies that the credit pro vided pursuant to line 8 this section is the primary reason for relocating to California. line 9 (26) “Visual ef fects” means the creation, alteration, or line 10 enhancement of images that cannot be captured on a set or location line 11 during live action photography and therefore is accomplished in line 12 postproduction. It includes, but is not limited to, matte paintings, line 13 animation, set extensions, computer-generated objects, characters line 14 and environments, compositing (combining two or more elements line 15 in a final image), and wire remo vals. “Visual effects” does not line 16 include fully animated projects, whether created by traditional or line 17 digital means.
line 18 (c) (1) Notwithstanding an y other la w, a qualified taxpayer line 19 may sell any credit allowed under this section that is attrib utable line 20 to an independent film, as defined in paragraph (6) of subdivision line 21 (b), to an unrelated party.
line 22 (2) The qualified taxpayer shall report to the Franchise Tax line 23 Board prior to the sale of the credit, in the form and manner line 24 specified by the Franchise Tax Board, all required information line 25 regarding the purchase and sale of the credit, including the social line 26 security or other taxpayer identification number of the unrelated line 27 party to whom the credit has been sold, the f ace amount of the line 28 credit sold, and the amount of consideration recei ved by the line 29 qualified taxpayer for the sale of the credit.
line 30 (3) In the case where the credit allo wed under this section line 31 exceeds the “net tax, ” the e xcess credit may be carried o ver to line 32 reduce the “net tax” in the following taxable year, and succeeding line 33 eight taxable years, if necessary, until the credit has been exhausted. line 34 (4) A credit shall not be sold pursuant to this subdi vision to line 35 more than one taxpayer , nor may the credit be resold by the line 36 unrelated party to another taxpayer or other party. line 37 (5) A party that has acquired tax credits under this subdivision line 38 shall be subject to the requirements of this section. 94 SB 485 — 11 —
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Communication: Senate Bill 485 - Bill Text (ITEM 2 SENATE BILL 485: INCOME TAXES: TAX CREDITS: MOTION PICTURE CREDIT EXTENSION) line 1 (6) In no event may a qualified taxpayer assign or sell an y tax line 2 credit to the extent the tax credit allowed by this section is claimed line 3 on any tax return of the qualified taxpayer.
line 4 (7) In the e vent that both the taxpayer originally allocated a line 5 credit under this section by the California Film Commission and line 6 a taxpayer to whom the credit has been sold both claim the same line 7 amount of credit on their tax returns, the Franchise Tax Board may line 8 disallow the credit of either taxpayer , so long as the statute of line 9 limitations upon assessment remains open.
line 10 (8) Chapter 3.5 (commencing with Section 11340) of Part 1 of line 11 Division 3 of Title 2 of the Go vernment Code does not apply to line 12 any standard, criterion, procedure, determination, rule, notice, or line 13 guideline established or issued by the Franchise Tax Board line 14 pursuant to this subdivision.
line 15 (9) Subdivision (g) of Section 17039 shall not apply to an y line 16 credit sold pursuant to this subdivision.
line 17 (10) For purposes of this subdi vision, the unrelated party or line 18 parties that purchase a credit pursuant to this subdivision shall be line 19 treated as a qualified taxpayer pursuant to paragraph (1) of line 20 subdivision (a).
line 21 (d) (1) No credit shall be allowed pursuant to this section unless line 22 the qualified taxpayer pro vides the follo wing to the California line 23 Film Commission:
line 24 (A) Identification of each qualified individual. line 25 (B) The specific start and end dates of production. line 26 (C) The total wages paid.
line 27 (D) The total amount of qualified w ages paid to qualified line 28 individuals.
line 29 (E) Aggregate data for indi viduals whose wages are excluded line 30 from qualified w ages by clause (i v) of subparagraph (B) of line 31 paragraph (21) of subdivision (b), including their gender, ethnic, line 32 and racial makeup.
line 33 (F) The cop yright re gistration number , as reflected on the line 34 certificate of registration issued under the authority of Section 410 line 35 of Title 17 of the United States Code, relating to re gistration of line 36 claim and issuance of certificate. The registration number shall be line 37 provided on the return claiming the credit.
line 38 (G) The total amounts paid or incurred to purchase or lease line 39 tangible personal property used in the production of a qualified line 40 motion picture.
94 — 12 — SB 485
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Communication: Senate Bill 485 - Bill Text (ITEM 2 SENATE BILL 485: INCOME TAXES: TAX CREDITS: MOTION PICTURE CREDIT EXTENSION) line 1 (H) Information to substantiate its qualified expenditures. line 2 (I) Information required by the California Film Commission line 3 under re gulations promulg ated pursuant to subdi vision (g) line 4 necessary to verify the amount of credit claimed. line 5 (J) Data regarding the diversity of the workforce employed by line 6 the applicant on the qualified motion picture, as described in line 7 subdivision (g).
line 8 (K) Documentation v erifying completion of the Career line 9 Readiness requirement.
line 10 (L) Documentation verifying that the qualified taxpayer paid a line 11 fee as described in subdivision (e).
line 12 (2) (A) Based on the information pro vided in paragraph (1), line 13 the California Film Commission shall recompute the jobs ratio line 14 previously computed in subdi vision (g) and compare this line 15 recomputed jobs ratio to the jobs ratio that the qualified taxpayer line 16 previously listed on the application submitted pursuant to line 17 subdivision (g).
line 18 (B) (i) If the California Film Commission determines that the line 19 jobs ratio has been reduced by more than 10 percent for a qualified line 20 motion picture, the California Film Commission shall reduce the line 21 amount of credit allo wed by an equal percentage, unless the line 22 qualified taxpayer demonstrates, and the California Film line 23 Commission determines, that reasonable cause exists for the jobs line 24 ratio reduction.
line 25 (ii) If the California Film Commission determines that the jobs line 26 ratio has been reduced by more than 20 percent for a qualified line 27 motion picture, the California Film Commission shall not accept line 28 an application described in subdi vision (g) from that qualified line 29 taxpayer or an y member of the qualified taxpayer’ s controlled line 30 group for a period of not less than one year from the date of that line 31 determination, unless the qualified taxpayer demonstrates, and the line 32 California Film Commission determines, that reasonable cause line 33 exists for the jobs ratio reduction.
line 34 (C) For the purposes of this paragraph, “reasonable cause” line 35 means unforeseen circumstances beyond the control of the qualified line 36 taxpayer, such as, but not limited to, the cancellation of a television line 37 series prior to the completion of the scheduled number of episodes line 38 or other similar circumstances as determined by the California line 39 Film Commission in re gulations to be adopted pursuant to line 40 subdivision (e).
94 SB 485 — 13 —
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Communication: Senate Bill 485 - Bill Text (ITEM 2 SENATE BILL 485: INCOME TAXES: TAX CREDITS: MOTION PICTURE CREDIT EXTENSION) line 1 (e) (1) (A) Subject to the Administrative Procedure Act line 2 (Chapter 3.5 (commencing with Section 11340) of P art 1 of line 3 Division 3 of Title 2 of the Government Code), the California Film line 4 Commission shall adopt rules and regulations to implement a pilot line 5 Career Pathways Training program including a fee to be paid by line 6 the qualified taxpayer, if the qualified taxpayer recei ves a credit line 7 under this section, to fund technical skills training to indi viduals line 8 from underserved communities for entry into film and tele vision line 9 industry jobs. The California Film Commission shall (i) identify line 10 a not-for-profit fiscal agent with direct relationships to industry line 11 skills training programs to manage the funds; and (ii) eng age line 12 labor-management jointly administered training programs with line 13 skills training focused on the entertainment industry to implement line 14 the program with California Film Commission appro val and line 15 oversight. With re gard to the Career Readiness requirement in line 16 Section 17053.95, the California Film Commission shall identify line 17 training and public service opportunities that may include, but not line 18 be limited to, hiring interns, public service announcements, and line 19 community outreach shall continue. The California Film line 20 Commission may prescribe rules and regulations to carry out the line 21 purposes of this section, including, subparagraph (D) of paragraph line 22 (4) of subdi vision (a) and clause (i v) of subparagraph (D) of line 23 paragraph (2) of subdi vision (g), and including an y rules and line 24 regulations necessary to establish procedures, processes, line 25 requirements, application fee structure, and rules identified in or line 26 required to implement this section, including credit and logo line 27 requirements and credit allocation procedures over multiple fiscal line 28 years where the qualified taxpayer is producing a series of features line 29 that will be filmed concurrently.
line 30 (B) Notwithstanding any other law, prior to preparing a notice line 31 of proposed action pursuant to Section 11346.4 of the Government line 32 Code and prior to making any revision to the proposed regulation line 33 other than a change that is nonsubstantial or solely grammatical line 34 in nature, the Go vernor’s Office of Business and Economic line 35 Development shall first appro ve the proposed re gulation or line 36 proposed change to a proposed regulation regarding allocating the line 37 credit pursuant to subdi vision (i), computing the jobs ratio as line 38 described in subdi visions (d) and (g), and defining “reasonable line 39 cause” pursuant to subparagraph (C) of paragraph (2) of subdivision line 40 (d).
94 — 14 — SB 485
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Communication: Senate Bill 485 - Bill Text (ITEM 2 SENATE BILL 485: INCOME TAXES: TAX CREDITS: MOTION PICTURE CREDIT EXTENSION) line 1 (2) (A) Implementation of this section for the 2020–21 fiscal line 2 year is deemed an emer gency and necessary for the immediate line 3 preservation of the public peace, health, and safety , or general line 4 welfare and, therefore, the California Film Commission is hereby line 5 authorized to adopt emer gency re gulations to implement this line 6 section during the 2020–21 fiscal year in accordance with the line 7 rulemaking pro visions of the Administrative Procedure Act line 8 (Chapter 3.5 (commencing with Section 11340) of P art 1 of line 9 Division 3 of Title 2 of the Government Code).
line 10 (B) Nothing in this paragraph shall be construed to require the line 11 Governor’s Office of Business and Economic De velopment to line 12 approve emergency regulations adopted pursuant to this paragraph. line 13 (3) The California Film Commission shall not be required to line 14 prepare an economic impact analysis pursuant to the Administrative line 15 Procedure Act (Chapter 3.5 (commencing with Section 11340) of line 16 Part 1 of Division 3 of Title 2 of the Government Code) with regard line 17 to any rules and regulations adopted pursuant to this subdivision. line 18 (f) If the qualified taxpayer f ails to pro vide the cop yright line 19 registration number as required in subparagraph (E) of paragraph line 20 (1) of subdivision (d), the credit shall be disallowed and assessed line 21 and collected under Section 19051 until the procedures are line 22 satisfied.
line 23 (g) For purposes of this section, the California Film Commission line 24 shall do the following:
line 25 (1) Subject to the requirements of subparagraphs (A) to (E), line 26 inclusive, of paragraph (2), on or after July 1, 2020, and before line 27 July 1, 2025, 2030, in tw o or more allocation periods per fiscal line 28 year, allocate tax credits to applicants.
line 29 (2) (A) Establish a procedure for applicants to file with the line 30 California Film Commission a written application, on a form jointly line 31 prescribed by the California Film Commission and the Franchise line 32 Tax Board for the allocation of the tax credit. The application shall line 33 include, but not be limited to, the following information:
line 34 (i) The budget for the motion picture production. line 35 (ii) The number of production days.
line 36 (iii) A financing plan for the production.
line 37 (iv) The diversity of the workforce employed by the applicant, line 38 including, but not limited to, the ethnic and racial mak eup of the line 39 individuals employed by the applicant during the production of line 40 the qualified motion picture, to the extent possible. 94 SB 485 — 15 —
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Communication: Senate Bill 485 - Bill Text (ITEM 2 SENATE BILL 485: INCOME TAXES: TAX CREDITS: MOTION PICTURE CREDIT EXTENSION) line 1 (v) All members of a combined reporting group, if kno wn at line 2 the time of the application.
line 3 (vi) Financial information, if available, including, but not limited line 4 to, the most recently produced balance sheets, annual statements line 5 of profits and losses, audited or unaudited financial statements, line 6 summary budget projections or results, or the functional equivalent line 7 of these documents of a partnership or owner of a single member line 8 limited liability company that is disregarded pursuant to Section line 9 23038. The information provided pursuant to this clause shall be line 10 confidential and shall not be subject to public disclosure. line 11 (vii) The names of all partners in a partnership not publicly line 12 traded or the names of all members of a limited liability company line 13 classified as a partnership not publicly traded for California income line 14 tax purposes that ha ve a financial interest in the applicant’ s line 15 qualified motion picture. The information pro vided pursuant to line 16 this clause shall be confidential and shall not be subject to public line 17 disclosure.
line 18 (viii) The amount of qualified w ages the applicant e xpects to line 19 pay to qualified individuals.
line 20 (ix) The amount of tax credit the applicant computes the line 21 qualified motion picture will receive, applying the applicable credit line 22 percentages described in paragraph (4) of subdivision (a). line 23 (x) A statement establishing that the tax credit described in this line 24 section is a significant factor in the applicant’s choice of location line 25 for the qualified motion picture. The statement shall include line 26 information about whether the qualified motion picture is at risk line 27 of not being filmed or specify the jurisdiction or jurisdictions in line 28 which the qualified motion picture will be located in the absence line 29 of the tax credit. The statement shall be signed by an officer or line 30 executive of the applicant.
line 31 (xi) The applicant’s written policy against unlawful harassment, line 32 including, but not limited to, se xual harassment, which includes line 33 procedures for reporting and in vestigating harassment claims, a line 34 phone number for an indi vidual who will be responsible for line 35 receiving harassment claims, and a statement that the compan y line 36 will not retaliate ag ainst an indi vidual who reports harassment. line 37 The applicant shall also indicate how the policy will be distributed line 38 to emplo yees and include a summary of education training line 39 resources, including the prohibition ag ainst, and pre vention and line 40 correction of, sexual harassment and remedies available. 94 — 16 — SB 485
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Communication: Senate Bill 485 - Bill Text (ITEM 2 SENATE BILL 485: INCOME TAXES: TAX CREDITS: MOTION PICTURE CREDIT EXTENSION) line 1 (xii) The ethnic and racial mak eup and gender of indi viduals line 2 whose wages are e xcluded from qualified w ages as set forth in line 3 clause (iv) of subparagraph (B) of paragraph (21) of subdi vision line 4 (b).
line 5 (xiii) A summary of the applicant’ s v oluntary programs to line 6 increase the representation of minorities and w omen in the job line 7 classifications that are not included in qualified wages as set forth line 8 in clause (iv) of subparagraph (B) of paragraph (21) of subdivision line 9 (b) and information about ho w these programs are publicized to line 10 interested parties. The officer or e xecutive referenced in clause line 11 (x) who is signing the statement shall pro vide additional line 12 information about these programs, if needed and upon request, to line 13 the California Film Commission.
line 14 (xiv) Any other information deemed relevant by the California line 15 Film Commission or the Franchise Tax Board.
line 16 (B) Establish criteria, consistent with the requirements of this line 17 section, for allocating tax credits.
line 18 (C) Determine and designate applicants who meet the line 19 requirements of this section.
line 20 (D) (i) For purposes of allocating the credit amounts subject to line 21 the categories described in subdi vision (i) in an y fiscal year, the line 22 California Film Commission shall do all of the following:
line 23 (ii) For each allocation date and for each cate gory, list each line 24 applicant from highest to lo west according to the jobs ratio as line 25 computed by the California Film Commission.
line 26 (iii) Subject to the applicable credit percentage, allocate the line 27 credit to each applicant according to the highest jobs ratio, working line 28 down the list, until the credit amount is exhausted. line 29 (iv) Pursuant to regulations adopted pursuant to subdivision (e), line 30 the California Film Commission may increase the jobs ratio by up line 31 to 25 percent if a qualified motion picture increases economic line 32 activity in California according to criteria de veloped by the line 33 California Film Commission that would include, but not be limited line 34 to, such factors as, the amount of the production and postproduction line 35 spending in California, the utilization of scoring musicians in line 36 California, and other criteria measuring economic impact in line 37 California as determined by the California Film Commission. line 38 (v) Notwithstanding an y other la w, an y tele vision series, line 39 relocating television series, or any new television series based on line 40 a pilot for a new television series that has been approved and issued 94 SB 485 — 17 —
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Communication: Senate Bill 485 - Bill Text (ITEM 2 SENATE BILL 485: INCOME TAXES: TAX CREDITS: MOTION PICTURE CREDIT EXTENSION) line 1 a credit allocation by the California Film Commission under this line 2 section, Section 23698, 17053.95, 23695, 17053.85, or 23685 shall line 3 be issued a credit for each subsequent season, for the life of that line 4 television series whenever credits are allocated within a fiscal year. line 5 The California Film Commission shall limit the amount of credits line 6 any recurring television series receives in a subsequent season to line 7 no more than the amount reserv ed in its prior fiscal year Credit line 8 Allocation Letter or Letters, or if no amounts were reserved in the line 9 prior fiscal year, the most immediate prior fiscal year in which a line 10 Credit Allocation Letter or Letters were received. In the event that line 11 insufficient tax credits are available to fund all recurring television line 12 series pursuant to this clause for any fiscal year or in the event the line 13 California Film Commission projects, in collaboration with the line 14 Department of Finance, that there will be insufficient tax credits line 15 available to fund all recurring tele vision series in either of the line 16 subsequent two fiscal years, the California Film Commission shall line 17 make the follo wing adjustments in the order gi ven until the line 18 shortfall, or any projected shortfall for the two subsequent fiscal line 19 years, for recurring television series is eliminated:
line 20 (I) Notwithstanding clause (iii) of subparagraph (A) of paragraph line 21 (2) of subdivision (i), the California Film Commission may redirect line 22 up to 100 percent of the credit amounts allocated to the relocating line 23 television series cate gory to recurring tele vision series for that line 24 fiscal year until the shortfall or projected shortfall is eliminated. line 25 (II) Notwithstanding clause (i v) of subparagraph (A) of line 26 paragraph (2) of subdivision (i), the California Film Commission line 27 may redirect up to 100 percent of the credit amounts allocated to line 28 a new television series to recurring television series for that fiscal line 29 year until the shortfall or projected shortfall is eliminated. line 30 (III) Notwithstanding clause (ii) of subparagraph (A) of line 31 paragraph (2) of subdivision (i), the California Film Commission line 32 may redirect up to 100 percent of the credit allocations from the line 33 features category to the recurring tele vision series cate gory for line 34 that fiscal year until the shortfall is eliminated. line 35 (IV) Allocate up to 25 percent of total credit allocations that line 36 would otherwise be allocated in the 2024–25 2029–30 fiscal year line 37 to recurring tele vision series in the current fiscal year until the line 38 shortfall is eliminated. Any amounts transferred for allocation in line 39 the current fiscal year shall be subtracted from the amount allowed line 40 to be allocated in the 2024–25 2029–30 fiscal year as specified in 94 — 18 — SB 485
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Communication: Senate Bill 485 - Bill Text (ITEM 2 SENATE BILL 485: INCOME TAXES: TAX CREDITS: MOTION PICTURE CREDIT EXTENSION) line 1 subdivision (i). Notwithstanding paragraph (3), the credit line 2 allocations that are subtracted from 2024–25 2029–30 shall not be line 3 certified until July 1, 2025 2030, or later.
line 4 (V) The California Film Commission shall consult with the line 5 qualified taxpayers who are producing the recurring tele vision line 6 series for purposes of negotiating a minimally impactful reduction line 7 in the amount of credits awarded to each recurring television series line 8 for that fiscal year until the shortfall is eliminated. line 9 (E) Subject to the annual cap and the allocation credit amounts line 10 based on cate gories described in subdi vision (i), allocate an line 11 aggregate amount of credits under this section and Section 23698, line 12 and allocate any carryover of unallocated or unused credits from line 13 prior years and Sections 17053.85, 17053.95, 23685, and 23695, line 14 and the amount of an y credits reduced pursuant to paragraph (2) line 15 of subdivision (d).
line 16 (3) Certify tax credits allocated to qualified taxpayers. line 17 (A) Establish a verification procedure to update the information line 18 in subparagraph (A) of paragraph (2) of subdivision (g), including, line 19 but not limited to, all of the following:
line 20 (i) The amounts of qualified e xpenditures paid or incurred by line 21 the applicant.
line 22 (ii) The diversity of the workforce employed by the applicant. line 23 (iii) The ethnic and racial mak eup and gender of indi viduals line 24 whose wages are excluded from qualified wages by clause (iv) of line 25 subparagraph (B) of paragraph (21) of subdivision (b). line 26 (B) Establish audit requirements that shall be satisfied before a line 27 credit certificate may be issued by the California Film Commission. line 28 (C) (i) Establish a procedure for a qualified taxpayer to report line 29 to the California Film Commission, prior to the issuance of a credit line 30 certificate, the following information:
line 31 (I) If readily available, a list of the states, pro vinces, or other line 32 jurisdictions in which an y member of the applicant’ s combined line 33 reporting group in the same business unit as the qualified taxpayer line 34 that, in the preceding calendar year , has produced a qualified line 35 motion picture intended for release in the United States mark et. line 36 For purposes of this clause, “qualified motion picture” shall not line 37 include any episodes of a television series that were complete or line 38 in production prior to July 1, 2020.
line 39 (II) Whether a qualified motion picture described in subclause line 40 (I) was awarded any financial incentive by the state, province, or 94 SB 485 — 19 —
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Communication: Senate Bill 485 - Bill Text (ITEM 2 SENATE BILL 485: INCOME TAXES: TAX CREDITS: MOTION PICTURE CREDIT EXTENSION) line 1 other jurisdiction that w as predicated on the performance of line 2 primary principal photography or postproduction in that location. line 3 (ii) The California Film Commission may provide that the report line 4 required by this subparagraph be filed in a single report provided line 5 on a calendar year basis for those qualified taxpayers that receive line 6 multiple credit certificates in a calendar year. line 7 (D) Issue a credit certificate to a qualified taxpayer upon line 8 completion of the qualified motion picture reflecting the credit line 9 amount allocated after qualified e xpenditures have been verified line 10 and the jobs ratio computed under this section. The amount of line 11 credit shown on the credit certificate shall not exceed the amount line 12 of credit allocated to that qualified taxpayer pursuant to this section. line 13 (4) Obtain, when possible, the follo wing information from line 14 applicants that do not receive an allocation of credit:
line 15 (A) Whether the qualified motion picture that w as the subject line 16 of the application was completed.
line 17 (B) If completed, in which state or foreign jurisdiction was the line 18 primary principal photography completed.
line 19 (C) Whether the applicant recei ved an y financial incenti ves line 20 from the state or foreign jurisdiction to make the qualified motion line 21 picture in that location.
line 22 (5) Provide the Legislative Analyst’s Office, upon request, any line 23 or all application materials or an y other materials received from, line 24 or submitted by, the applicants, in electronic format when available, line 25 including, but not limited to, information pro vided pursuant to line 26 clauses (i) to (xi) inclusive, of subparagraph (A) of paragraph (2) line 27 and the di versity workplans provided pursuant to clause (i v) of line 28 subparagraph (B) of paragraph (2) of subdivision (k). line 29 (6) The information provided to the California Film Commission line 30 pursuant to this section shall constitute confidential tax information line 31 for purposes of Article 2 (commencing with Section 19542) of line 32 Chapter 7 of Part 10.2.
line 33 (7) (A) Notwithstanding any other law, on or after July 1, 2025, line 34 2030, the California Film Commission may allocate, pursuant to line 35 this section, any previously allocated credits not certified that have line 36 not previously been added to credit amounts available for allocation line 37 under this section or a successor section or sections. line 38 (B) For purposes of this section, “pre viously allocated credits line 39 not certified” means either:
94 — 20 — SB 485
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Communication: Senate Bill 485 - Bill Text (ITEM 2 SENATE BILL 485: INCOME TAXES: TAX CREDITS: MOTION PICTURE CREDIT EXTENSION) line 1 (i) Credits allocated under paragraph (1) for which the qualified line 2 taxpayer to which the credit amounts were originally allocated has line 3 notified the California Film Commission in writing that the line 4 qualified taxpayer will not request certification for the allocated line 5 credits.
line 6 (ii) The difference between the amount of credits allocated under line 7 paragraph (1) to a qualified taxpayer and the amount of credits the line 8 California Film Commission certified, for that qualified taxpayer. line 9 For purposes of calculating the dif ference, the California Film line 10 Commission shall not consider any credit amounts for which the line 11 qualified taxpayer notifies the California Film Commission under line 12 clause (i).
line 13 (8) Notwithstanding any other la w, on or after July 1, 2025, line 14 2030, the California Film Commission may allocate, pursuant to line 15 this section, an y credit amounts described in subparagraphs (B) line 16 and (E) of paragraph (1) of subdivision (i) that have not previously line 17 been added to credit amounts a vailable for allocation under this line 18 section or a successor section or sections.
line 19 (9) The California Film Commission shall submit a report to line 20 the Legislature, on an annual basis beginning January 1, 2022, on line 21 aggregate diversity information for the productions allocated tax line 22 credits allo wed in this section and the di versity of the motion line 23 picture production industry in California more generally. line 24 (h) (1) The California Film Commission shall annually provide line 25 the Legislative Analyst’s Office, the Franchise Tax Board, and the line 26 California Department of Tax and Fee Administration with a list line 27 of qualified taxpayers and the tax credit amounts allocated to each line 28 qualified taxpayer by the California Film Commission. The list line 29 shall include the names and taxpayer identification numbers, line 30 including taxpayer identification numbers of each partner or line 31 shareholder, as applicable, of the qualified taxpayer. line 32 (2) (A) Notwithstanding paragraph (6) of subdivision (g), the line 33 California Film Commission shall annually post on its internet line 34 website and make available for public release the following:
line 35 (i) A table which includes all of the follo wing information: a line 36 list of qualified taxpayers and the tax credit amounts allocated to line 37 each qualified taxpayer by the California Film Commission, the line 38 number of production days in California the qualified taxpayer line 39 represented in its application would occur, the number of California line 40 jobs that the qualified taxpayer represented in its application would 94 SB 485 — 21 —
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Communication: Senate Bill 485 - Bill Text (ITEM 2 SENATE BILL 485: INCOME TAXES: TAX CREDITS: MOTION PICTURE CREDIT EXTENSION) line 1 be directly created by the production, and the total amount of line 2 qualified expenditures expected to be spent by the production. line 3 (ii) A narrative staff summary describing the production of the line 4 qualified taxpayer as well as background information re garding line 5 the qualified taxpayer contained in the qualified taxpayer’ s line 6 application for the credit.
line 7 (iii) For qualified taxpayers allocated a credit, the aggre gate line 8 diversity information collected pursuant to clauses (i v) and (xii) line 9 of subparagraph (A) of paragraph (2) of subdivision (g) organized line 10 per production and an aggre gate compilation describing the line 11 voluntary programs collected pursuant to clause (xiii) of line 12 subparagraph (A) of paragraph (2) of subdivision (g). line 13 (B) Nothing in this subdivision shall be construed to make the line 14 information submitted by an applicant for a tax credit under this line 15 section a public record.
line 16 (3) The California Film Commission shall pro vide each city line 17 and county in California with an instructional guide that includes, line 18 but is not limited to, a re view of best practices for f acilitating line 19 motion picture production in local jurisdictions, resources on line 20 hosting and encouraging motion picture production, and the line 21 California Film Commission’ s Model Filming Ordinance. The line 22 California Film Commission shall maintain on its internet website line 23 a list of initiati ves by locality that encourage motion picture line 24 production in regions across the state. The list shall be distributed line 25 to each appro ved applicant for the program to highlight local line 26 jurisdictions that offer incentives to facilitate film production. line 27 (i) (1) (A) The aggre gate amount of credits that may be line 28 allocated for a fiscal year pursuant to this section and Section line 29 23698, except as provided in subdivision (k) of this section and line 30 subdivision (k) of Section 23698, is three hundred thirty million line 31 dollars ($330,000,000), plus any amount described in subparagraph line 32 (B), (C), (D), or (E) in credits for the 2020–21 fiscal year and each line 33 fiscal year thereafter, through and including the 2024–25 2029–30 line 34 fiscal year, except as provided in paragraph (7) of subdivision (g), line 35 plus the amount described in subparagraph (F) in credits for the line 36 2021–22 and 2022–23 fiscal years.
line 37 (B) (i) Subject to clauses (ii) and (iii), the unused allocation line 38 credit amount, if any, for the preceding fiscal year. 94 — 22 — SB 485
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Communication: Senate Bill 485 - Bill Text (ITEM 2 SENATE BILL 485: INCOME TAXES: TAX CREDITS: MOTION PICTURE CREDIT EXTENSION) line 1 (ii) The amount of unused credit allocation attrib utable to line 2 independent films shall only be allocated according to clause (i) line 3 of subparagraph (A) of paragraph (2).
line 4 (iii) The total amount of an y unused credit allocation amount line 5 that is remaining shall only be allocated pursuant to clause (iv) of line 6 subparagraph (A) of paragraph (2).
line 7 (C) The amount of previously allocated credits not certified. line 8 (D) The amount of an y credits reduced pursuant to paragraph line 9 (2) of subdivision (d).
line 10 (E) That portion of any unused allocation credit amount, if any, line 11 attributable to Section 17053.85, 17053.95, 23685, or 23695 line 12 available for that fiscal year in a manner as determined by line 13 regulations promulgated by the California Film Commission. line 14 (F) (i) For fiscal years 2021–22 and 2022–23, the California line 15 Film Commission shall allocate an additional fifteen million dollars line 16 ($15,000,000) in credits to be granted e xclusively to tele vision line 17 series that relocate to California.
line 18 (I) Notwithstanding subparagraph (A) of paragraph (2) of this line 19 subdivision and clause (v) of subparagraph (D) of paragraph (2) line 20 of subdi vision (g), the mone ys allocated pursuant to this line 21 subparagraph shall not be redirected or reallocated. line 22 (II) Notwithstanding paragraph (25) of subdi vision (b), for line 23 purposes of this subparagraph, a “tele vision series that relocated line 24 to California” means a television series, without regard to episode line 25 length or initial media e xhibition, with a minimum production line 26 budget of one million dollars ($1,000,000) per episode that both line 27 filmed at least 75 percent of principal photography days for at least line 28 one episode outside of California and has not filmed more than 25 line 29 percent of principal photograph y days for an y episode inside of line 30 California.
line 31 (ii) For fiscal years 2021–22 and 2022–23, the California Film line 32 Commission shall allocate an additional se venty-five million line 33 dollars ($75,000,000) in credits to be granted e xclusively to line 34 recurring television series.
line 35 (2) (A) Notwithstanding the foregoing, and subject to paragraph line 36 (4) of this subdivision and changes in allocations pursuant to clause line 37 (v) of subparagraph (D) of paragraph (2) of subdi vision (g), the line 38 California Film Commission shall allocate the credit amounts line 39 subject to the following categories:
94 SB 485 — 23 —
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Communication: Senate Bill 485 - Bill Text (ITEM 2 SENATE BILL 485: INCOME TAXES: TAX CREDITS: MOTION PICTURE CREDIT EXTENSION) line 1 (i) Independent films with qualified expenditures of ten million line 2 dollars ($10,000,000) or less shall be allocated 4.8 percent of the line 3 amount specified in paragraph (1). Independent films with qualified line 4 expenditures in excess of ten million dollars ($10,000,000) shall line 5 be allocated 3.2 percent of the amount specified in paragraph (1). line 6 These amounts shall be in addition to any unused allocation credit line 7 amount, if an y, for the preceding fiscal year as described in line 8 subparagraph (B) of paragraph (1).
line 9 (ii) Features shall be allocated 35 percent of the amount specified line 10 in paragraph (1).
line 11 (iii) A relocating television series shall be allocated 17 percent line 12 of the amount specified in paragraph (1).
line 13 (iv) A new television series, pilots for a ne w television series, line 14 miniseries, and recurring tele vision series shall be allocated 40 line 15 percent of the amount specified in paragraph (1), plus any unused line 16 allocation credit amount, if an y, for the preceding fiscal year as line 17 described in subparagraph (B) of paragraph (1). line 18 (B) Within an y allocation period for credits to a relocating line 19 television series, an y unused amount shall be reallocated to the line 20 category described in clause (iv) of subparagraph (A) and, if any line 21 unused amount remains, reallocated in the next allocation period line 22 for credits to a relocating television series.
line 23 (C) With respect to a relocating television series issued a credit line 24 in a subsequent year pursuant to clause (v) of subparagraph (D) line 25 of paragraph (2) of subdivision (g), that subsequent credit amount line 26 shall be allowed from the allocation amount described in clause line 27 (iv) of subparagraph (A).
line 28 (3) Any act that reduces the amount that may be allocated line 29 pursuant to paragraph (1) constitutes a change in state tax es for line 30 the purpose of increasing revenues within the meaning of Section line 31 3 of Article XIIIA of the California Constitution and may be passed line 32 by not less than two-thirds of all Members elected to each of the line 33 two houses of the Legislature.
line 34 (4) (A) Except as pro vided in subparagraph (B), a qualified line 35 motion picture, as defined in subdivision (k), shall not be eligible line 36 for an allocation under subdi visions (a) to (j), inclusi ve, if it line 37 receives a credit under subdivision (k) during that fiscal year. line 38 (B) Notwithstanding an y other pro vision in this section, a line 39 recurring television series, as that term is used under subdivision line 40 (k), that is no longer eligible for the credit in paragraph (9) of 94 — 24 — SB 485
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Communication: Senate Bill 485 - Bill Text (ITEM 2 SENATE BILL 485: INCOME TAXES: TAX CREDITS: MOTION PICTURE CREDIT EXTENSION) line 1 subdivision (k) shall be eligible to apply for an allocation of credits line 2 under subdivisions (a) to (j), inclusive.
line 3 (j) The California Film Commission shall have the authority to line 4 allocate tax credits in accordance with this section and in line 5 accordance with any regulations prescribed pursuant to subdivision line 6 (e) upon adoption.
line 7 (k) (1) For taxable years beginning on or after January 1, 2022, line 8 and before January 1, 2032, there shall be allo wed to a qualified line 9 taxpayer a credit against the “net tax,” as defined in Section 17039, line 10 subject to allocation by the California Film Commission, in an line 11 amount equal to 20 percent or 25 percent, whiche ver is the line 12 applicable credit percentage described in paragraph (4) of line 13 subdivision (a), as modified by paragraph (3) of this subdivision, line 14 of the qualified e xpenditures paid or incurred during the taxable line 15 year by a qualified motion picture produced in the state at a line 16 certified studio construction project.
line 17 (2) For purposes of this subdi vision, the definitions in line 18 subdivision (b) shall apply e xcept as otherwise pro vided in this line 19 subdivision.
line 20 (A) “Certified studio construction project” means a construction line 21 or renovation project certified by the California Film Commission line 22 as having met all of the following criteria:
line 23 (i) The project pro vides for the construction or reno vation of line 24 one or more soundstages located in the state.
line 25 (ii) Actual construction or renovation expenditures are not less line 26 than twenty-fiv e million dollars ($25,000,000) of actual line 27 construction or renovation expenditures made over not more than line 28 five continuous calendar years.
line 29 (iii) The construction or reno vation of each certified studio line 30 construction project is performed in accordance with Section line 31 17053.99.
line 32 (iv) The construction or reno vation of each certified studio line 33 construction project commences pursuant to a foundation permit line 34 or a structural building permit for the construction or reno vation line 35 that is issued after the ef fective date of the act adopting this line 36 subdivision.
line 37 (v) The applicant shall not have received a California Competes line 38 Grant under Section 12096.6 of the Government Code for wages line 39 or investment related to construction of the studio construction line 40 project.
94 SB 485 — 25 —
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Communication: Senate Bill 485 - Bill Text (ITEM 2 SENATE BILL 485: INCOME TAXES: TAX CREDITS: MOTION PICTURE CREDIT EXTENSION) line 1 (B) “Qualified motion picture” means a qualified motion picture, line 2 as defined in subdi vision (b), that meets all of the follo wing line 3 requirements:
line 4 (i) For each taxable year for which the credit is claimed by the line 5 qualified motion picture, films at least 50 percent of its principal line 6 photography stage shooting days on a soundstage or soundstages line 7 certified as a certified studio construction project, for which line 8 certification was issued within the prior 36 months. line 9 (ii) For each taxable year for which the credit is claimed by a line 10 qualified motion picture, incurs at least seven million five hundred line 11 thousand dollars ($7,500,000) in qualified wages for filming on a line 12 soundstage or soundstages certified as a certified studio line 13 construction project that are paid or incurred in that taxable year. line 14 (iii) Is produced by a qualified taxpayer that is either of the line 15 following:
line 16 (I) More than 50 percent o wned, directly or indirectly, by the line 17 same owner or o wners of the soundstage or soundstages that is line 18 part of a certified studio construction project on which the line 19 production is filmed.
line 20 (II) Entered into a contract or lease of 10 years or more with line 21 the owner or owners of a certified studio construction project on line 22 which the production is filmed.
line 23 (iv) Provides a di versity w orkplan that is appro ved by the line 24 California Film Commission.
line 25 (C) For purposes of this subdi vision, a qualified taxpayer and line 26 a taxpayer include a passthrough entity and a disregarded entity. line 27 (3) (A) The diversity workplan required pursuant to clause (iv) line 28 of subparagraph (B) of paragraph (2) shall include all of the line 29 following:
line 30 (i) A statement of the di versity goals the motion picture will line 31 seek to achieve in terms of qualified wages paid by race, ethnicity, line 32 and gender.
line 33 (ii) A statement of the di versity goals the motion picture will line 34 seek to achie ve for indi viduals whose w ages are e xcluded from line 35 qualified wages as set forth in clause (iv) of subparagraph (B) of line 36 paragraph (21) of subdi vision (b), with respect to both line 37 compensation and to the representation of diversity in the creative line 38 aspects of the motion picture.
line 39 (iii) A plan of what strate gies the motion picture will emplo y line 40 to achieve the goals in clauses (i) and (ii).
94 — 26 — SB 485
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Communication: Senate Bill 485 - Bill Text (ITEM 2 SENATE BILL 485: INCOME TAXES: TAX CREDITS: MOTION PICTURE CREDIT EXTENSION) line 1 (B) The diversity workplan shall include goals that are broadly line 2 reflective of California’ s population, in terms of race, ethnicity , line 3 and gender.
line 4 (C) The California Film Commission shall approve or reject the line 5 diversity workplan of an applicant, to the extent allowed by federal line 6 and state law.
line 7 (D) (i) The California Film Commission shall not certify an y line 8 tax credit under this subdi vision until they have received a final line 9 diversity report from the applicant.
line 10 (ii) The final di versity report shall calculate and pro vide line 11 evidence for the e xtent to which the applicant met the di versity line 12 goals laid out in their diversity workplan.
line 13 (iii) The California Film Commission shall ha ve the authority line 14 to audit the final diversity report to determine if the diversity goals line 15 set forth in the applicant’s diversity workplan for the motion picture line 16 production were achieved.
line 17 (iv) If the California Film Commission determines that the line 18 applicant has met or made a good faith effort to meet the diversity line 19 goals in its di versity workplan, the applicant’s credit percentage line 20 described in paragraph (1) shall be increased by up to four line 21 percentage points as follows:
line 22 (I) By two percentage points if the California Film Commission line 23 determines that the applicant has met or made a good f aith effort line 24 to meet the di versity goals with respect to the di versity of the line 25 workforce emplo yed by the applicant in its di versity w orkplan line 26 statement.
line 27 (II) By two percentage points if the California Film Commission line 28 determines that the applicant has met or made a good f aith effort line 29 to meet the diversity goals with respect to individuals whose wages line 30 are excluded from qualified w ages as set forth in clause (i v) of line 31 subparagraph (B) of paragraph (21) of subdi vision (b), in its line 32 diversity workplan statement.
line 33 (E) The California Film Commission, in consultation with the line 34 Governor’s Office of Business and Economic Development, shall line 35 establish guidelines to evaluate diversity workplans as described line 36 in this paragraph. The guidelines shall be posted on the California line 37 Film Commission’s internet website.
line 38 (4) The credit allo wed under this subdi vision shall be line 39 administered in accordance with subdivisions (a), (b), (c), (d), (h), 94 SB 485 — 27 —
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Communication: Senate Bill 485 - Bill Text (ITEM 2 SENATE BILL 485: INCOME TAXES: TAX CREDITS: MOTION PICTURE CREDIT EXTENSION) line 1 and (l), except that paragraph (7) of subdivision (b) shall not apply line 2 and paragraph (2) of subdivision (d) shall not apply. line 3 (5) Subparagraph (A) of paragraph (2), subparagraphs (A), (B), line 4 and (C) of paragraph (3), and paragraphs (4), (5), and (6) of line 5 subdivision (g) shall apply.
line 6 (6) A conflict between this subdi vision and an y other line 7 subdivisions in this section shall be reconciled in f avor of this line 8 subdivision.
line 9 (7) The aggregate amount of credit allocated by the California line 10 Film Commission pursuant to subdivisions (a) to (j), inclusive, of line 11 this section and Section 23698 shall not be reduced by the tax line 12 credit allowed pursuant to this subdivision. The amount of credit line 13 allowed by this subdivision shall not be limited by subdivision (i). line 14 (8) (A) The credit allocated pursuant to this subdi vision shall line 15 be allo wed for the taxable year in which the California Film line 16 Commission issues a credit certificate in accordance with the line 17 procedures provided for in subdivision (g) for the qualified motion line 18 picture. The California Film Commission shall issue a credit line 19 certificate to a qualified taxpayer upon completion of the qualified line 20 motion picture reflecting the credit amount allocated after qualified line 21 expenditures have been verified.
line 22 (B) (i) The California Film Commission, commencing with line 23 fiscal year 2021–22, shall allocate tax credits each year to qualified line 24 motion pictures meeting the criteria of this subdivision. The total line 25 amount of credits that may be allocated under this subdi vision is line 26 one hundred fifty million dollars ($150,000,000). A season of a line 27 series or feature film may not be allocated more than twelve million line 28 dollars ($12,000,000) under this subdivision. Recurring television line 29 series receiving an initial allocation under this subdi vision shall line 30 be allocated for subsequent seasons no more than allo wed under line 31 this paragraph.
line 32 (ii) A qualified motion picture shall not be eligible to receive a line 33 credit allocation under this subdi vision if that qualified motion line 34 picture receives a credit allocation under subdi visions (a) to (j), line 35 inclusive for the fiscal year. However, subject to paragraph (4) of line 36 subdivision (i), any television series, relocating television series, line 37 or any new television series based on a pilot for a ne w television line 38 series that is no longer eligible for a credit under this subdivision line 39 pursuant to paragraph (9) may apply to recei ve an allocation of line 40 credits pursuant to subdivisions (a) to (j), inclusive. 94 — 28 — SB 485
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Communication: Senate Bill 485 - Bill Text (ITEM 2 SENATE BILL 485: INCOME TAXES: TAX CREDITS: MOTION PICTURE CREDIT EXTENSION) line 1 (C) In any year the tax credits under this paragraph ha ve been line 2 allocated by the California Film Commission, a qualified motion line 3 picture or a recurring television series that satisfies the criteria of line 4 this subdivision, but have not recei ved an allocation of credits, line 5 may apply to recei ve an allocation of credits pursuant to line 6 subdivision (i).
line 7 (D) Credits shall be allocated based on the assumption that the line 8 motion picture meets the diversity criteria specified in clause (iv) line 9 of subparagraph (D) of paragraph (3).
line 10 (9) (A) A qualified motion picture meeting the requirements line 11 of this subdivision during the first three years after the certified line 12 studio construction project is certified by the California Film line 13 Commission shall be allo wed a credit under this subdi vision line 14 commencing with its first year of filming in the certified studio line 15 construction project facility and for each successive year until the line 16 certified studio construction project has reached its fourth year line 17 after being certified, as long as the qualified motion picture line 18 continues to satisfy the criteria of this subdivision and to the extent line 19 the total credit amount the California Film Commission is permitted line 20 to allocate pursuant to subparagraph (B) of paragraph (8) has not line 21 previously been allocated.
line 22 (B) (i) Subject to the allocation of credits under paragraph (8) line 23 of this subdi vision, if the first year of production of a qualified line 24 motion picture occurs in the fourth year after the certified studio line 25 construction project is certified by the California Film Commission line 26 or any year thereafter, the qualified motion picture shall submit line 27 an application subject to the annual cap and the allocation credit line 28 amounts based on categories described in subdivision (i), subject line 29 to the modifications included in this subparagraph. line 30 (ii) For feature films and ne w television series, the jobs ratio line 31 used to rank qualified motion pictures in subparagraph (D) of line 32 paragraph (2) of subdi vision (g) shall be equal to the product of line 33 the jobs ratio calculated in paragraph (7) of subdi vision (b) and line 34 133 percent.
line 35 (10) Within six months of the effective date of this subdivision, line 36 the California Film Commission shall:
line 37 (A) Establish procedures to certify a certified studio construction line 38 project.
line 39 (B) Establish procedures to v erify a qualified motion picture line 40 has met the criteria established in this section for filming in a 94 SB 485 — 29 —
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Communication: Senate Bill 485 - Bill Text (ITEM 2 SENATE BILL 485: INCOME TAXES: TAX CREDITS: MOTION PICTURE CREDIT EXTENSION) line 1 certified studio construction project facility. That procedure shall line 2 include a requirement that the qualified motion picture pay 0.5 line 3 percent of the appro ved credit amount to the Career P athways line 4 Training program specified in subdivision (e).
line 5 (C) (i) Implementation of this subdi vision for the 2021–22 line 6 fiscal year is deemed an emer gency and necessary for the line 7 immediate preservation of the public peace, health, and safety, or line 8 general welfare and, therefore, the California Film Commission line 9 is hereby authorized to adopt emergency regulations to implement line 10 this subdivision during the 2021–22 fiscal year in accordance with line 11 the rulemaking pro visions of the Administrative Procedure Act line 12 (Chapter 3.5 (commencing with Section 11340) of P art 1 of line 13 Division 3 of Title 2 of the Government Code).
line 14 (ii) The California Film Commission shall adopt regulations in line 15 order to implement this paragraph.
line 16 (11) In the case where the credit allo wed by this subdi vision line 17 exceeds the taxpayer’s tax liability computed under this part, the line 18 excess credit may be carried o ver to reduce the “net tax” in the line 19 following taxable year , and succeeding eight taxable years, if line 20 necessary, until the credit has been exhausted. line 21 (12) Upon completion of construction or reno vation of the line 22 soundstage or soundstages, the taxpayer shall certify to the line 23 California Film Commission that all contractors and subcontractors line 24 performing construction work on the soundstage or soundstages line 25 were required to use a skilled and trained w orkforce to perform line 26 such work in accordance with subdivision (b) of Section 17053.99. line 27 (13) (A) Upon completion of construction or renovation of the line 28 soundstage or soundstages, the soundstage or soundstages shall line 29 be continuously operated, maintained, and repaired by any of the line 30 following:
line 31 (i) A workforce that is paid at least the general pre vailing rate line 32 of per diem w ages for the type of w ork and geographic area, as line 33 determined by the Director of Industrial Relations pursuant to line 34 Sections 1773 and 1773.9 of the Labor Code, if such services are line 35 performed by a workforce that is employed directly, or indirectly line 36 through a motion picture payroll services company, by the owner line 37 or affiliate of the o wner of the soundstage or lessee of the line 38 soundstage described in subclause (II) of clause (iii) of line 39 subparagraph (B) of paragraph (2) of this subdivision. 94 — 30 — SB 485
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Communication: Senate Bill 485 - Bill Text (ITEM 2 SENATE BILL 485: INCOME TAXES: TAX CREDITS: MOTION PICTURE CREDIT EXTENSION) line 1 (ii) A skilled and trained w orkforce as defined in Chapter 2.9 line 2 (commencing with Section 2600) of P art 1 of Di vision 2 of the line 3 Public Contract Code, if such services are provided by third-party line 4 vendors.
line 5 (B) Each year follo wing completion of construction or line 6 renovation of the soundstage or soundstages that a qualified motion line 7 picture is allocated a tax credit pursuant to this subdi vision, the line 8 qualified taxpayer shall certify to the California Film Commission line 9 both of the following:
line 10 (i) The total amount of payments to third-party v endors or line 11 qualified w ages for operation, maintenance, and repair of the line 12 certified soundstage.
line 13 (ii) The amount and percentage of the total amount of payments line 14 to third-party v endors or qualified w ages for operation, line 15 maintenance, and repair of the certified soundstage performed by line 16 each workforce described in subparagraph (A).
line 17 (C) If the percentage paid to w orkers in clause (i) of line 18 subparagraph (A) is certified to be 90 percent of the total amount line 19 under clause (i) of subparagraph (B) or greater , the qualified line 20 taxpayer shall be entitled to 100 percent of the applicable credit line 21 issued under this subdivision for the period. If the percentage paid line 22 to workers in clause (i) of subparagraph (A) is certified to be less line 23 than 90 percent of the total amount under clause (i) of subparagraph line 24 (B) but greater than or equal to 75 percent of the total amount line 25 under clause (i) of subparagraph (B), the qualified taxpayer shall line 26 be entitled to 50 percent of the applicable credit issued under this line 27 subdivision for the period. If the percentage paid to w orkers in line 28 clause (i) of subparagraph (A) is certified to be less than 75 percent line 29 of the total amount under clause (i) of subparagraph (B), the line 30 qualified taxpayer shall not be entitled to any credit issued under line 31 this subdivision for the applicable period.
line 32 (l) Section 41 shall not apply to the credits allo wed by this line 33 section.
line 34 SEC. 2. Section 23698 of the Revenue and Taxation Code is line 35 amended to read:
line 36 23698. (a) (1) For taxable years beginning on or after January line 37 1, 2020, there shall be allo wed to a qualified taxpayer a credit line 38 against the “tax, ” as defined in Section 23036, subject to a line 39 computation and ranking by the California Film Commission in line 40 subdivision (g) and the allocation amount categories described in 94 SB 485 — 31 —
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Communication: Senate Bill 485 - Bill Text (ITEM 2 SENATE BILL 485: INCOME TAXES: TAX CREDITS: MOTION PICTURE CREDIT EXTENSION) line 1 subdivision (i), in an amount equal to 20 percent or 25 percent, line 2 whichever is the applicable credit percentage described in line 3 paragraph (4), of the qualified expenditures for the production of line 4 a qualified motion picture in California. A credit shall not be line 5 allowed under this section for an y qualified expenditures for the line 6 production of a motion picture in California if a credit has been line 7 claimed for those same expenditures under Section 23685 or 23695. line 8 (2) Except as otherwise provided in this section, the credit shall line 9 be allo wed for the taxable year in which the California Film line 10 Commission issues the credit certificate pursuant to subdi vision line 11 (g) for the qualified motion picture, but in no instance prior to July line 12 1, 2020, and shall be for the applicable percentage of all qualified line 13 expenditures paid or incurred by the qualified taxpayer in all line 14 taxable years for that qualified motion picture. line 15 (3) (A) The amount of the credit allowed to a qualified taxpayer line 16 shall be limited to the amount specified in the credit certificate line 17 issued to the qualified taxpayer by the California Film Commission line 18 pursuant to subdivision (g).
line 19 (B) In determining the amount specified in the credit certificate line 20 in subparagraph (A), the California Film Commission shall be line 21 limited to the following amounts of qualified expenditures for each line 22 qualified motion picture:
line 23 (i) In the case of a feature, up to one hundred million dollars line 24 ($100,000,000).
line 25 (ii) In the case of a miniseries described in clause (ii) of line 26 subparagraph (A) of paragraph (18) of subdivision (b), up to one line 27 hundred million dollars ($100,000,000).
line 28 (iii) In the case of a television series described in clause (iii) or line 29 clause (v) of subparagraph (A) of paragraph (18) of subdi vision line 30 (b), up to one hundred million dollars ($100,000,000) per season. line 31 (iv) In the case of an independent film, up to ten million dollars line 32 ($10,000,000).
line 33 (4) For purposes of paragraphs (1) and (2), the applicable credit line 34 percentage shall be:
line 35 (A) Twenty percent of the qualified e xpenditures attributable line 36 to the production of a qualified motion picture in California, line 37 including, but not limited to, a feature or a tele vision series that line 38 relocated to California that is in its second or subsequent years of line 39 receiving a tax credit allocation pursuant to this section, Section line 40 23685, or Section 23695.
94 — 32 — SB 485
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Communication: Senate Bill 485 - Bill Text (ITEM 2 SENATE BILL 485: INCOME TAXES: TAX CREDITS: MOTION PICTURE CREDIT EXTENSION) line 1 (B) Twenty-five percent of the qualified e xpenditures line 2 attributable to the production of a qualified motion picture in line 3 California where the qualified motion picture is a television series line 4 that relocated to California in its first year of receiving a tax credit line 5 allocation pursuant to this section.
line 6 (C) Twenty-five percent of the qualified e xpenditures line 7 attributable to the production of a qualified motion picture that is line 8 an independent film.
line 9 (D) Additional credits shall be allowed for the production of a line 10 qualified motion picture whose applicable credit percentage is line 11 determined pursuant to subparagraph (A), in an aggregate amount line 12 not to e xceed 5 percent of the qualified e xpenditures under that line 13 subparagraph, as follows:
line 14 (i) (I) Five percent of qualified expenditures, excluding qualified line 15 wages described in subparagraph (E), relating to original line 16 photography outside the Los Angeles zone.
line 17 (II) For purposes of this clause and subparagraph (E):
line 18 (ia) “Applicable period” means the period that commences with line 19 preproduction and ends when original photography concludes. The line 20 applicable period includes the time necessary to strik e a remote line 21 location and return to the Los Angeles zone.
line 22 (ib) “Los Angeles zone” means the area within a circle 30 miles line 23 in radius from Beverly Boulevard and La Cienega Boulevard, Los line 24 Angeles, California, and includes Agua Dulce, Castaic, including line 25 Castaic Lak e, Leo Carrillo State Beach, Ontario International line 26 Airport, Piru, and Pomona, including the Los Angeles County line 27 Fairgrounds. The Metro-Goldwyn-Mayer , Inc. Conejo Ranch line 28 property is within the Los Angeles zone.
line 29 (ic) “Original photography” includes principal photography and line 30 reshooting original footage.
line 31 (id) “Qualified expenditures relating to original photograph y line 32 outside the Los Angeles zone” means amounts paid or incurred line 33 during the applicable period for tangible personal property line 34 purchased or leased and used or consumed outside the Los Angeles line 35 zone and relating to original photography outside the Los Angeles line 36 zone and qualified wages paid for services performed outside the line 37 Los Angeles zone and relating to original photography outside the line 38 Los Angeles zone.
94 SB 485 — 33 —
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Communication: Senate Bill 485 - Bill Text (ITEM 2 SENATE BILL 485: INCOME TAXES: TAX CREDITS: MOTION PICTURE CREDIT EXTENSION) line 1 (ii) Five percent of the qualified e xpenditures relating to line 2 qualified visual effects attributable to the production of a qualified line 3 motion picture in California.
line 4 (E) (i) Notwithstanding subparagraph (D), an amount equal to line 5 10 percent of qualified wages paid for services performed relating line 6 to original photograph y outside of the Los Angeles zone to line 7 qualified individuals who reside in California but outside the Los line 8 Angeles zone shall be allo wed as an additional credit for the line 9 production of a qualified motion picture whose applicable credit line 10 percentage is determined pursuant to subparagraph (A). line 11 (ii) Notwithstanding subparagraph (D), an amount equal to 5 line 12 percent of qualified wages paid for services performed relating to line 13 original photography outside of the Los Angeles zone to qualified line 14 individuals who reside in California b ut outside the Los Angeles line 15 zone shall be allowed as an additional credit for the production of line 16 a qualified motion picture whose applicable credit percentage is line 17 determined pursuant to subparagraph (B) or (C). line 18 (b) For purposes of this section:
line 19 (1) “Ancillary product” means any article for sale to the public line 20 that contains a portion of, or any element of, the qualified motion line 21 picture.
line 22 (2) “Budget” means an estimate of all expenses paid or incurred line 23 during the production period of a qualified motion picture. It shall line 24 be the same budget used by the qualified taxpayer and production line 25 company for all qualified motion picture purposes. line 26 (3) “Clip use” means a use of any portion of a motion picture, line 27 other than the qualified motion picture, used in the qualified motion line 28 picture.
line 29 (4) “Credit certificate” means the certificate issued by the line 30 California Film Commission pursuant to subparagraph (D) of line 31 paragraph (3) of subdivision (g).
line 32 (5) (A) “Employee fringe benefits” means the amount allowable line 33 as a deduction under this part to the qualified taxpayer in volved line 34 in the production of the qualified motion picture, exclusive of any line 35 amounts contrib uted by emplo yees, for an y year during the line 36 production period with respect to any of the following:
line 37 (i) Employer contributions under an y pension, profit-sharing, line 38 annuity, or similar plan.
line 39 (ii) Employer-provided coverage under any accident or health line 40 plan for employees.
94 — 34 — SB 485
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Communication: Senate Bill 485 - Bill Text (ITEM 2 SENATE BILL 485: INCOME TAXES: TAX CREDITS: MOTION PICTURE CREDIT EXTENSION) line 1 (iii) The employer’s cost of life or disability insurance provided line 2 to employees.
line 3 (B) Any amount treated as w ages under clause (i) of line 4 subparagraph (A) of paragraph (21) shall not be taken into account line 5 under this paragraph.
line 6 (6) “Independent film” means a motion picture with a minimum line 7 budget of one million dollars ($1,000,000) that is produced by a line 8 company that is not publicly traded and publicly traded companies line 9 do not o wn, directly or indirectly , more than 25 percent of the line 10 producing company.
line 11 (7) “Jobs ratio” means the amount of qualified w ages paid to line 12 qualified indi viduals di vided by the amount of tax credit, not line 13 including any additional credit allowed pursuant to subparagraphs line 14 (D) and (E) of paragraph (4) of subdi vision (a), as computed by line 15 the California Film Commission. F or the purposes of the line 16 calculation of the jobs ratio only , 70 percent of qualified line 17 expenditures for visual effects paid to third-party vendors for work line 18 performed in California shall be deemed to be qualified w ages line 19 paid to a qualified individual.
line 20 (8) “Licensing” means an y grant of rights to distrib ute the line 21 qualified motion picture, in whole or in part.
line 22 (9) “New use” means any use of a motion picture in a medium line 23 other than the medium for which it was initially created. line 24 (10) “Pilot for a new television series” means the initial episode line 25 produced for a proposed television series.
line 26 (11) (A) “Postproduction” means the final acti vities in a line 27 qualified motion picture’ s production, including editing, fole y line 28 recording, automatic dialogue replacement, sound editing, scoring, line 29 music track recording by musicians and music editing, beginning line 30 and end credits, ne gative cutting, ne gative processing and line 31 duplication, the addition of sound and visual effects, sound mixing, line 32 film-to-tape transfers, encoding, and color correction. line 33 (B) “Postproduction” does not include the manuf acture or line 34 shipping of release prints or their equivalent. line 35 (12) “Preproduction” means the process of preparation for actual line 36 physical production which begins after a qualified motion picture line 37 has recei ved a firm agreement of financial commitment, or is line 38 greenlit, with, for e xample, the establishment of a dedicated line 39 production office, the hiring of key crew members, and includes, 94 SB 485 — 35 —
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Communication: Senate Bill 485 - Bill Text (ITEM 2 SENATE BILL 485: INCOME TAXES: TAX CREDITS: MOTION PICTURE CREDIT EXTENSION) line 1 but is not limited to, acti vities that include location scouting and line 2 execution of contracts with vendors of equipment and stage space. line 3 (13) “Principal photography” means the phase of production line 4 during which the motion picture is actually shot, as distinguished line 5 from preproduction and postproduction.
line 6 (14) “Production period” means the period be ginning with line 7 preproduction and ending upon completion of postproduction. line 8 (15) “Qualified entity” means a personal service corporation as line 9 defined in Section 269A(b)(1) of the Internal Re venue Code, a line 10 payroll services corporation, or any entity receiving qualified wages line 11 with respect to services performed by a qualified individual. line 12 (16) “Qualified expenditures” means amounts paid or incurred line 13 for tangible personal property purchased or leased, and used, within line 14 this state in the production of a qualified motion picture and line 15 payments, including qualified wages, for services performed within line 16 this state in the production of a qualified motion picture. line 17 (17) (A) “Qualified indi vidual” means an y indi vidual who line 18 performs services during the production period in an activity related line 19 to the production of a qualified motion picture. line 20 (B) “Qualified indi vidual” shall not include either of the line 21 following:
line 22 (i) Any individual related to the qualified taxpayer as described line 23 in subparagraph (A), (B), or (C) of Section 51(i)(1) of the Internal line 24 Revenue Code.
line 25 (ii) Any 5-percent owner, as defined in Section 416(i)(1)(B) of line 26 the Internal Revenue Code, of the qualified taxpayer. line 27 (18) (A) “Qualified motion picture” means a motion picture line 28 that is produced for distrib ution to the general public, re gardless line 29 of medium, that is one of the following:
line 30 (i) A feature with a minimum production budget of one million line 31 dollars ($1,000,000).
line 32 (ii) A miniseries consisting of two or more episodes, each longer line 33 than 40 minutes of running time, e xclusive of commercials, that line 34 is produced in California, with a minimum production b udget of line 35 one million dollars ($1,000,000) per episode.
line 36 (iii) A new television series of episodes longer than 40 minutes line 37 each of running time, exclusive of commercials, that is produced line 38 in California, with a minimum production b udget of one million line 39 dollars ($1,000,000) per episode.
line 40 (iv) An independent film.
94 — 36 — SB 485
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Communication: Senate Bill 485 - Bill Text (ITEM 2 SENATE BILL 485: INCOME TAXES: TAX CREDITS: MOTION PICTURE CREDIT EXTENSION) line 1 (v) A television series that relocated to California. line 2 (vi) A pilot for a ne w television series that is longer than 40 line 3 minutes of running time, exclusive of commercials, that is produced line 4 in California, and with a minimum production b udget of one line 5 million dollars ($1,000,000).
line 6 (B) To qualify as a “qualified motion picture, ” all of the line 7 following conditions shall be satisfied:
line 8 (i) At least 75 percent of the principal photography days occur line 9 wholly in California or 75 percent of the production b udget is line 10 incurred for payment for services performed within the state and line 11 the purchase or rental of property used within the state. line 12 (ii) Production of the qualified motion picture is completed line 13 within 30 months from the date on which the qualified taxpayer’s line 14 application is approved by the California Film Commission. F or line 15 purposes of this section, a qualified motion picture is “completed” line 16 when the process of postproduction has been finished. line 17 (iii) The copyright for the motion picture is registered with the line 18 United States Copyright Office pursuant to Title 17 of the United line 19 States Code.
line 20 (iv) Principal photograph y of the qualified motion picture line 21 commences after the date on which the application is approved by line 22 the California Film Commission, but no later than 180 days after line 23 the date of that approval if the qualified motion picture has a budget line 24 with qualified expenditures of less than one hundred million dollars line 25 ($100,000,000), and no later than 240 days after the date of that line 26 approval in the case of a qualified motion picture with a b udget line 27 of qualified expenditures with at least one hundred million dollars line 28 ($100,000,000), unless death, disability , or disfigurement of the line 29 director or of a principal cast member; an act of God, including, line 30 but not limited to, fire, flood, earthquake, storm, hurricane, or other line 31 natural disaster; terrorist acti vities; or go vernment sanction has line 32 directly pre vented a production’ s ability to be gin principal line 33 photography within the prescribed 180- or 240-day commencement line 34 period.
line 35 (C) For the purposes of subparagraph (A), in computing the line 36 total w ages paid or incurred for the production of a qualified line 37 motion picture, all amounts paid or incurred by all persons or line 38 entities that share in the costs of the qualified motion picture shall line 39 be aggregated.
94 SB 485 — 37 —
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Communication: Senate Bill 485 - Bill Text (ITEM 2 SENATE BILL 485: INCOME TAXES: TAX CREDITS: MOTION PICTURE CREDIT EXTENSION) line 1 (D) “Qualified motion picture” shall not include commercial line 2 advertising, music videos, a motion picture produced for pri vate line 3 noncommercial use, such as weddings, graduations, or as part of line 4 an educational course and made by students, a ne ws program, line 5 current events or public e vents program, talk sho w, game show, line 6 sporting e vent or acti vity, a wards sho w, telethon or other line 7 production that solicits funds, reality television program, clip-based line 8 programming if more than 50 percent of the content is comprised line 9 of licensed footage, documentaries, v ariety programs, daytime line 10 dramas, strip shows, one-half hour (air time) episodic tele vision line 11 shows, or an y production that f alls within the recordk eeping line 12 requirements of Section 2257 of Title 18 of the United States Code. line 13 (19) (A) “Qualified taxpayer” means a taxpayer who has paid line 14 or incurred qualified e xpenditures, participated in the Career line 15 Readiness requirement in Section 23695 and has been issued a line 16 credit certificate by the California Film Commission pursuant to line 17 subdivision (g).
line 18 (B) (i) In the case of any pass-thru entity, the determination of line 19 whether a taxpayer is a qualified taxpayer under this section shall line 20 be made at the entity level and any credit under this section is not line 21 allowed to the pass-thru entity, but shall be passed through to the line 22 partners or shareholders in accordance with applicable provisions line 23 of P art 10 (commencing with Section 17001) or P art 11 line 24 (commencing with Section 23001). For purposes of this paragraph, line 25 “pass-thru entity” means any entity taxed as a partnership or “S” line 26 corporation.
line 27 (ii) In the case of an “S” corporation, the credit allo wed under line 28 this section shall not be used by an “S” corporation as a credit line 29 against a tax imposed under Chapter 4.5 (commencing with Section line 30 23800) of Part 11 of Division 2.
line 31 (20) “Qualified visual ef fects” means visual ef fects where at line 32 least 75 percent or a minimum of ten million dollars ($10,000,000) line 33 of the qualified e xpenditures for the visual ef fects is paid or line 34 incurred in California.
line 35 (21) (A) “Qualified wages” means all of the following:
line 36 (i) Any w ages subject to withholding under Di vision 6 line 37 (commencing with Section 13000) of the Unemployment Insurance line 38 Code that were paid or incurred by an y taxpayer involved in the line 39 production of a qualified motion picture with respect to a qualified 94 — 38 — SB 485
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Communication: Senate Bill 485 - Bill Text (ITEM 2 SENATE BILL 485: INCOME TAXES: TAX CREDITS: MOTION PICTURE CREDIT EXTENSION) line 1 individual for services performed on the qualified motion picture line 2 production within this state.
line 3 (ii) The portion of any employee fringe benefits paid or incurred line 4 by any taxpayer involved in the production of the qualified motion line 5 picture that are properly allocable to qualified w age amounts line 6 described in clauses (i), (iii), and (iv).
line 7 (iii) Any payments made to a qualified entity for services line 8 performed in this state by qualified individuals within the meaning line 9 of paragraph (17).
line 10 (iv) Remuneration paid to an independent contractor who is a line 11 qualified individual for services performed within this state by that line 12 qualified individual.
line 13 (B) “Qualified wages” shall not include any of the following:
line 14 (i) Expenses, including w ages, related to ne w use, reuse, clip line 15 use, licensing, secondary mark ets, or residual compensation, or line 16 the creation of any ancillary product, including, but not limited to, line 17 a soundtrack album, toy, game, trailer, or teaser. line 18 (ii) Expenses, including wages, paid or incurred with respect to line 19 acquisition, development, turnaround, or any rights thereto. line 20 (iii) Expenses, including wages, related to financing, overhead, line 21 marketing, promotion, or distribution of a qualified motion picture. line 22 (iv) Expenses, including wages, paid per person per qualified line 23 motion picture for writers, directors, music directors, music line 24 composers, music supervisors, producers, and performers, other line 25 than background actors with no scripted lines.
line 26 (22) “Residual compensation” means supplemental line 27 compensation paid at the time that a motion picture is e xhibited line 28 through ne w use, reuse, clip use, or in secondary mark ets, as line 29 distinguished from payments made during production. line 30 (23) “Reuse” means any use of a qualified motion picture in the line 31 same medium for which it w as created, following the initial use line 32 in that medium.
line 33 (24) “Secondary markets” means media in which a qualified line 34 motion picture is exhibited following the initial media in which it line 35 is exhibited.
line 36 (25) “Television series that relocated to California” means a line 37 television series, without regard to episode length or initial media line 38 exhibition, with a minimum production b udget of one million line 39 dollars ($1,000,000) per episode, that filmed at least 75 percent of line 40 principal photography days in its most recent season outside of 94 SB 485 — 39 —
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Communication: Senate Bill 485 - Bill Text (ITEM 2 SENATE BILL 485: INCOME TAXES: TAX CREDITS: MOTION PICTURE CREDIT EXTENSION) line 1 California or has filmed all seasons outside of California and for line 2 which the taxpayer certifies that the credit pro vided pursuant to line 3 this section is the primary reason for relocating to California. line 4 (26) “Visual ef fects” means the creation, alteration, or line 5 enhancement of images that cannot be captured on a set or location line 6 during live action photography and therefore is accomplished in line 7 postproduction. It includes, but is not limited to, matte paintings, line 8 animation, set extensions, computer-generated objects, characters line 9 and environments, compositing (combining two or more elements line 10 in a final image), and wire remo vals. “Visual effects” does not line 11 include fully animated projects, whether created by traditional or line 12 digital means.
line 13 (c) (1) Notwithstanding subdivision (i) of Section 23036, in line 14 the case where the credit allo wed by this section e xceeds the line 15 taxpayer’s tax liability computed under this part, a qualified line 16 taxpayer may elect to assign an y portion of the credit allo wed line 17 under this section to one or more affiliated corporations for each line 18 taxable year in which the credit is allo wed. For purposes of this line 19 subdivision, “affiliated corporation” has the meaning provided in line 20 subdivision (b) of Section 25110, as that section was amended by line 21 Chapter 881 of the Statutes of 1993, as of the last day of the taxable line 22 year in which the credit is allo wed, except that “100 percent” is line 23 substituted for “more than 50 percent” wherever it appears in the line 24 section, and “v oting common stock” is substituted for “v oting line 25 stock” wherever it appears in the section.
line 26 (2) The election provided in paragraph (1):
line 27 (A) May be based on an y method selected by the qualified line 28 taxpayer that originally receives the credit.
line 29 (B) Shall be irrevocable for the taxable year the credit is allowed, line 30 once made.
line 31 (C) May be changed for an y subsequent taxable year if the line 32 election to make the assignment is expressly shown on each of the line 33 returns of the qualified taxpayer and the qualified taxpayer’ s line 34 affiliated corporations that assign and receive the credits. line 35 (D) Shall be reported to the Franchise Tax Board, in the form line 36 and manner specified by the Franchise Tax Board, along with all line 37 required information re garding the assignment of the credit, line 38 including the corporation number , the federal emplo yer line 39 identification number, or other taxpayer identification number of line 40 the assignee, and the amount of the credit assigned. 94 — 40 — SB 485
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Communication: Senate Bill 485 - Bill Text (ITEM 2 SENATE BILL 485: INCOME TAXES: TAX CREDITS: MOTION PICTURE CREDIT EXTENSION) line 1 (3) (A) Notwithstanding an y other la w, a qualified taxpayer line 2 may sell any credit allowed under this section that is attrib utable line 3 to an independent film, as defined in paragraph (6) of subdivision line 4 (b), to an unrelated party.
line 5 (B) The qualified taxpayer shall report to the Franchise Tax line 6 Board prior to the sale of the credit, in the form and manner line 7 specified by the Franchise Tax Board, all required information line 8 regarding the purchase and sale of the credit, including the social line 9 security or other taxpayer identification number of the unrelated line 10 party to whom the credit has been sold, the f ace amount of the line 11 credit sold, and the amount of consideration recei ved by the line 12 qualified taxpayer for the sale of the credit.
line 13 (4) In the case where the credit allo wed under this section line 14 exceeds the “tax,” the excess credit may be carried over to reduce line 15 the “tax” in the follo wing taxable year , and succeeding eight line 16 taxable years, if necessary, until the credit has been exhausted. line 17 (5) A credit shall not be sold pursuant to this subdi vision to line 18 more than one taxpayer , nor may the credit be resold by the line 19 unrelated party to another taxpayer or other party. line 20 (6) A party that has been assigned or acquired tax credits under line 21 this subdivision shall be subject to the requirements of this section. line 22 (7) In no event may a qualified taxpayer assign or sell an y tax line 23 credit to the extent the tax credit allowed by this section is claimed line 24 on any tax return of the qualified taxpayer.
line 25 (8) In the e vent that both the taxpayer originally allocated a line 26 credit under this section by the California Film Commission and line 27 a taxpayer to whom the credit has been sold both claim the same line 28 amount of credit on their tax returns, the Franchise Tax Board may line 29 disallow the credit of either taxpayer , so long as the statute of line 30 limitations upon assessment remains open.
line 31 (9) Chapter 3.5 (commencing with Section 11340) of Part 1 of line 32 Division 3 of Title 2 of the Go vernment Code does not apply to line 33 any standard, criterion, procedure, determination, rule, notice, or line 34 guideline established or issued by the Franchise Tax Board line 35 pursuant to this subdivision.
line 36 (10) Subdivision (i) of Section 23036 shall not apply to an y line 37 credit sold pursuant to this subdivision.
line 38 (11) For purposes of this subdivision:
94 SB 485 — 41 —
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Communication: Senate Bill 485 - Bill Text (ITEM 2 SENATE BILL 485: INCOME TAXES: TAX CREDITS: MOTION PICTURE CREDIT EXTENSION) line 1 (A) An affiliated corporation or corporations that are assigned line 2 a credit pursuant to paragraph (1) shall be treated as a qualified line 3 taxpayer pursuant to paragraph (1) of subdivision (a). line 4 (B) The unrelated party or parties that purchase a credit pursuant line 5 to paragraphs (3) to (10), inclusive, shall be treated as a qualified line 6 taxpayer pursuant to paragraph (1) of subdivision (a). line 7 (d) (1) No credit shall be allowed pursuant to this section unless line 8 the qualified taxpayer pro vides the follo wing to the California line 9 Film Commission:
line 10 (A) Identification of each qualified individual. line 11 (B) The specific start and end dates of production. line 12 (C) The total wages paid.
line 13 (D) The total amount of qualified w ages paid to qualified line 14 individuals.
line 15 (E) Aggregate data for indi viduals whose wages are excluded line 16 from qualified w ages by clause (i v) of subparagraph (B) of line 17 paragraph (21) of subdivision (b), including their gender, ethnic, line 18 and racial makeup.
line 19 (F) The cop yright re gistration number , as reflected on the line 20 certificate of registration issued under the authority of Section 410 line 21 of Title 17 of the United States Code, relating to re gistration of line 22 claim and issuance of certificate. The registration number shall be line 23 provided on the return claiming the credit.
line 24 (G) The total amounts paid or incurred to purchase or lease line 25 tangible personal property used in the production of a qualified line 26 motion picture.
line 27 (H) Information to substantiate its qualified expenditures. line 28 (I) Information required by the California Film Commission line 29 under re gulations promulg ated pursuant to subdi vision (g) line 30 necessary to verify the amount of credit claimed. line 31 (J) Data regarding the diversity of the workforce employed by line 32 the applicant on the qualified motion picture, as described in line 33 subdivision (g).
line 34 (K) Documentation v erifying completion of the Career line 35 Readiness requirement.
line 36 (L) Documentation verifying that the qualified taxpayer paid a line 37 fee as described in subdivision (e).
line 38 (2) (A) Based on the information pro vided in paragraph (1), line 39 the California Film Commission shall recompute the jobs ratio line 40 previously computed in subdi vision (g) and compare this 94 — 42 — SB 485
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Communication: Senate Bill 485 - Bill Text (ITEM 2 SENATE BILL 485: INCOME TAXES: TAX CREDITS: MOTION PICTURE CREDIT EXTENSION) line 1 recomputed jobs ratio to the jobs ratio that the qualified taxpayer line 2 previously listed on the application submitted pursuant to line 3 subdivision (g).
line 4 (B) (i) If the California Film Commission determines that the line 5 jobs ratio has been reduced by more than 10 percent for a qualified line 6 motion picture, the California Film Commission shall reduce the line 7 amount of credit allo wed by an equal percentage, unless the line 8 qualified taxpayer demonstrates, and the California Film line 9 Commission determines, that reasonable cause exists for the jobs line 10 ratio reduction.
line 11 (ii) If the California Film Commission determines that the jobs line 12 ratio has been reduced by more than 20 percent for a qualified line 13 motion picture, the California Film Commission shall not accept line 14 an application described in subdi vision (g) from that qualified line 15 taxpayer or an y member of the qualified taxpayer’ s controlled line 16 group for a period of not less than one year from the date of that line 17 determination, unless the qualified taxpayer demonstrates, and the line 18 California Film Commission determines, that reasonable cause line 19 exists for the jobs ratio reduction.
line 20 (C) For the purposes of this paragraph, “reasonable cause” line 21 means unforeseen circumstances beyond the control of the qualified line 22 taxpayer, such as, but not limited to, the cancellation of a television line 23 series prior to the completion of the scheduled number of episodes line 24 or other similar circumstances as determined by the California line 25 Film Commission in re gulations to be adopted pursuant to line 26 subdivision (e).
line 27 (e) (1) (A) Subject to the Administrative Procedure Act line 28 (Chapter 3.5 (commencing with Section 11340) of P art 1 of line 29 Division 3 of Title 2 of the Government Code), the California Film line 30 Commission shall adopt rules and regulations to implement a pilot line 31 Career Pathways Training program including a fee to be paid by line 32 the qualified taxpayer, if the qualified taxpayer recei ves a credit line 33 under this section, to fund technical skills training to indi viduals line 34 from underserved communities for entry into film and tele vision line 35 industry jobs. The California Film Commission shall (i) identify line 36 a not-for-profit fiscal agent with direct relationships to industry line 37 skills training programs to manage the funds; and (ii) eng age line 38 labor-management jointly administered training programs with line 39 skills training focused on the entertainment industry to implement line 40 the program with California Film Commission appro val and 94 SB 485 — 43 —
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Communication: Senate Bill 485 - Bill Text (ITEM 2 SENATE BILL 485: INCOME TAXES: TAX CREDITS: MOTION PICTURE CREDIT EXTENSION) line 1 oversight. With re gard to the Career Readiness requirement in line 2 Section 23695, the California Film Commission shall identify line 3 training and public service opportunities that may include, but not line 4 be limited to, hiring interns, public service announcements, and line 5 community outreach shall continue. The California Film line 6 Commission may prescribe rules and regulations to carry out the line 7 purposes of this section, including, subparagraph (D) of paragraph line 8 (4) of subdi vision (a) and clause (i v) of subparagraph (D) of line 9 paragraph (2) of subdi vision (g), and including an y rules and line 10 regulations necessary to establish procedures, processes, line 11 requirements, application fee structure, and rules identified in or line 12 required to implement this section, including credit and logo line 13 requirements and credit allocation procedures over multiple fiscal line 14 years where the qualified taxpayer is producing a series of features line 15 that will be filmed concurrently.
line 16 (B) Notwithstanding any other law, prior to preparing a notice line 17 of proposed action pursuant to Section 11346.4 of the Government line 18 Code and prior to making any revision to the proposed regulation line 19 other than a change that is nonsubstantial or solely grammatical line 20 in nature, the Go vernor’s Office of Business and Economic line 21 Development shall first appro ve the proposed re gulation or line 22 proposed change to a proposed regulation regarding allocating the line 23 credit pursuant to subdi vision (i), computing the jobs ratio as line 24 described in subdi visions (d) and (g), and defining “reasonable line 25 cause” pursuant to subparagraph (C) of paragraph (2) of subdivision line 26 (d).
line 27 (2) (A) Implementation of this section for the 2020–21 fiscal line 28 year is deemed an emer gency and necessary for the immediate line 29 preservation of the public peace, health, and safety , or general line 30 welfare and, therefore, the California Film Commission is hereby line 31 authorized to adopt emer gency re gulations to implement this line 32 section during the 2020–21 fiscal year in accordance with the line 33 rulemaking pro visions of the Administrative Procedure Act line 34 (Chapter 3.5 (commencing with Section 11340) of P art 1 of line 35 Division 3 of Title 2 of the Government Code).
line 36 (B) Nothing in this paragraph shall be construed to require the line 37 Governor’s Office of Business and Economic De velopment to line 38 approve emergency regulations adopted pursuant to this paragraph. line 39 (3) The California Film Commission shall not be required to line 40 prepare an economic impact analysis pursuant to the Administrative 94 — 44 — SB 485
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Communication: Senate Bill 485 - Bill Text (ITEM 2 SENATE BILL 485: INCOME TAXES: TAX CREDITS: MOTION PICTURE CREDIT EXTENSION) line 1 Procedure Act (Chapter 3.5 (commencing with Section 11340) of line 2 Part 1 of Division 3 of Title 2 of the Government Code) with regard line 3 to any rules and regulations adopted pursuant to this subdivision. line 4 (f) If the qualified taxpayer f ails to pro vide the cop yright line 5 registration number as required in subparagraph (E) of paragraph line 6 (1) of subdivision (d), the credit shall be disallowed and assessed line 7 and collected under Section 19051 until the procedures are line 8 satisfied.
line 9 (g) For purposes of this section, the California Film Commission line 10 shall do the following:
line 11 (1) Subject to the requirements of subparagraphs (A) to (E), line 12 inclusive, of paragraph (2), on or after July 1, 2020, and before line 13 July 1, 2025, 2030, in tw o or more allocation periods per fiscal line 14 year, allocate tax credits to applicants.
line 15 (2) (A) Establish a procedure for applicants to file with the line 16 California Film Commission a written application, on a form jointly line 17 prescribed by the California Film Commission and the Franchise line 18 Tax Board for the allocation of the tax credit. The application shall line 19 include, but not be limited to, the following information:
line 20 (i) The budget for the motion picture production. line 21 (ii) The number of production days.
line 22 (iii) A financing plan for the production.
line 23 (iv) The diversity of the workforce employed by the applicant, line 24 including, but not limited to, the ethnic and racial mak eup of the line 25 individuals employed by the applicant during the production of line 26 the qualified motion picture, to the extent possible. line 27 (v) All members of a combined reporting group, if kno wn at line 28 the time of the application.
line 29 (vi) Financial information, if available, including, but not limited line 30 to, the most recently produced balance sheets, annual statements line 31 of profits and losses, audited or unaudited financial statements, line 32 summary budget projections or results, or the functional equivalent line 33 of these documents of a partnership or owner of a single member line 34 limited liability company that is disregarded pursuant to Section line 35 23038. The information provided pursuant to this clause shall be line 36 confidential and shall not be subject to public disclosure. line 37 (vii) The names of all partners in a partnership not publicly line 38 traded or the names of all members of a limited liability company line 39 classified as a partnership not publicly traded for California income line 40 tax purposes that ha ve a financial interest in the applicant’ s 94 SB 485 — 45 —
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Communication: Senate Bill 485 - Bill Text (ITEM 2 SENATE BILL 485: INCOME TAXES: TAX CREDITS: MOTION PICTURE CREDIT EXTENSION) line 1 qualified motion picture. The information pro vided pursuant to line 2 this clause shall be confidential and shall not be subject to public line 3 disclosure.
line 4 (viii) The amount of qualified w ages the applicant e xpects to line 5 pay to qualified individuals.
line 6 (ix) The amount of tax credit the applicant computes the line 7 qualified motion picture will receive, applying the applicable credit line 8 percentages described in paragraph (4) of subdivision (a). line 9 (x) A statement establishing that the tax credit described in this line 10 section is a significant factor in the applicant’s choice of location line 11 for the qualified motion picture. The statement shall include line 12 information about whether the qualified motion picture is at risk line 13 of not being filmed or specify the jurisdiction or jurisdictions in line 14 which the qualified motion picture will be located in the absence line 15 of the tax credit. The statement shall be signed by an officer or line 16 executive of the applicant.
line 17 (xi) The applicant’s written policy against unlawful harassment, line 18 including, but not limited to, se xual harassment, which includes line 19 procedures for reporting and in vestigating harassment claims, a line 20 phone number for an indi vidual who will be responsible for line 21 receiving harassment claims, and a statement that the compan y line 22 will not retaliate ag ainst an indi vidual who reports harassment. line 23 The applicant shall also indicate how the policy will be distributed line 24 to emplo yees and include a summary of education training line 25 resources, including the prohibition ag ainst, and pre vention and line 26 correction of, sexual harassment and remedies available. line 27 (xii) The ethnic and racial mak eup and gender of indi viduals line 28 whose wages are e xcluded from qualified w ages as set forth in line 29 clause (iv) of subparagraph (B) of paragraph (21) of subdi vision line 30 (b).
line 31 (xiii) A summary of the applicant’ s v oluntary programs to line 32 increase the representation of minorities and w omen in the job line 33 classifications that are not included in qualified wages as set forth line 34 in clause (iv) of subparagraph (B) of paragraph (21) of subdivision line 35 (b) and information about ho w these programs are publicized to line 36 interested parties. The officer or e xecutive referenced in clause line 37 (x) who is signing the statement shall pro vide additional line 38 information about these programs, if needed and upon request, to line 39 the California Film Commission.
94 — 46 — SB 485
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Communication: Senate Bill 485 - Bill Text (ITEM 2 SENATE BILL 485: INCOME TAXES: TAX CREDITS: MOTION PICTURE CREDIT EXTENSION) line 1 (xiv) Any other information deemed relevant by the California line 2 Film Commission or the Franchise Tax Board.
line 3 (B) Establish criteria, consistent with the requirements of this line 4 section, for allocating tax credits.
line 5 (C) Determine and designate applicants who meet the line 6 requirements of this section.
line 7 (D) (i) For purposes of allocating the credit amounts subject to line 8 the categories described in subdi vision (i) in an y fiscal year, the line 9 California Film Commission shall do all of the following:
line 10 (ii) For each allocation date and for each cate gory, list each line 11 applicant from highest to lo west according to the jobs ratio as line 12 computed by the California Film Commission.
line 13 (iii) Subject to the applicable credit percentage, allocate the line 14 credit to each applicant according to the highest jobs ratio, working line 15 down the list, until the credit amount is exhausted. line 16 (iv) Pursuant to regulations adopted pursuant to subdivision (e), line 17 the California Film Commission may increase the jobs ratio by up line 18 to 25 percent if a qualified motion picture increases economic line 19 activity in California according to criteria de veloped by the line 20 California Film Commission that would include, but not be limited line 21 to, such factors as, the amount of the production and postproduction line 22 spending in California, the utilization of scoring musicians in line 23 California, and other criteria measuring economic impact in line 24 California as determined by the California Film Commission. line 25 (v) Notwithstanding an y other la w, an y tele vision series, line 26 relocating television series, or any new television series based on line 27 a pilot for a new television series that has been approved and issued line 28 a credit allocation by the California Film Commission under this line 29 section, Section 17053.98, 17053.85, 17053.95, 23685, or 23695 line 30 shall be issued a credit for each subsequent season, for the life of line 31 that television series whenever credits are allocated within a fiscal line 32 year. The California Film Commission shall limit the amount of line 33 credits an y recurring tele vision series recei ves in a subsequent line 34 season to no more than the amount reserved in its prior fiscal year line 35 Credit Allocation Letter or Letters, or if no amounts were reserved line 36 in the prior fiscal year , the most immediate prior fiscal year in line 37 which a Credit Allocation Letter or Letters were recei ved. In the line 38 event that insufficient tax credits are available to fund all recurring line 39 television series pursuant to this clause for an y fiscal year or in line 40 the event the California Film Commission projects, in collaboration 94 SB 485 — 47 —
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Communication: Senate Bill 485 - Bill Text (ITEM 2 SENATE BILL 485: INCOME TAXES: TAX CREDITS: MOTION PICTURE CREDIT EXTENSION) line 1 with the Department of Finance, that there will be insufficient tax line 2 credits available to fund all recurring television series in either of line 3 the subsequent two fiscal years, the California Film Commission line 4 shall make the following adjustments in the order given until the line 5 shortfall, or any projected shortfall for the two subsequent fiscal line 6 years, for recurring television series is eliminated:
line 7 (I) Notwithstanding clause (iii) of subparagraph (A) of paragraph line 8 (2) of subdivision (i), the California Film Commission may redirect line 9 up to 100 percent of the credit amounts allocated to the relocating line 10 television series cate gory to recurring tele vision series for that line 11 fiscal year until the shortfall or projected shortfall is eliminated. line 12 (II) Notwithstanding clause (i v) of subparagraph (A) of line 13 paragraph (2) of subdivision (i), the California Film Commission line 14 may redirect up to 100 percent of the credit amounts allocated to line 15 a new television series to recurring television series for that fiscal line 16 year until the shortfall or projected shortfall is eliminated. line 17 (III) Notwithstanding clause (ii) of subparagraph (A) of line 18 paragraph (2) of subdivision (i), the California Film Commission line 19 may redirect up to 100 percent of the credit allocations from the line 20 features category to the recurring tele vision series cate gory for line 21 that fiscal year until the shortfall is eliminated. line 22 (IV) Allocate up to 25 percent of total credit allocations that line 23 would otherwise be allocated in the 2024–25 2029–30 fiscal year line 24 to recurring tele vision series in the current fiscal year until the line 25 shortfall is eliminated. Any amounts transferred for allocation in line 26 the current fiscal year shall be subtracted from the amount allowed line 27 to be allocated in the 2024–25 2029–30 fiscal year as specified in line 28 subdivision (i). Notwithstanding paragraph (3), the credit line 29 allocations that are subtracted from 2024–25 2029–30 shall not be line 30 certified until July 1, 2025 2030, or later.
line 31 (V) The California Film Commission shall consult with the line 32 qualified taxpayers who are producing the recurring tele vision line 33 series for purposes of negotiating a minimally impactful reduction line 34 in the amount of credits awarded to each recurring television series line 35 for that fiscal year until the shortfall is eliminated. line 36 (E) Subject to the annual cap and the allocation credit amounts line 37 based on cate gories described in subdi vision (i), allocate an line 38 aggregate amount of credits under this section and Section line 39 17053.98, and allocate an y carryover of unallocated or unused line 40 credits from prior years and Sections 17053.85, 17053.95, 23685, 94 — 48 — SB 485
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Communication: Senate Bill 485 - Bill Text (ITEM 2 SENATE BILL 485: INCOME TAXES: TAX CREDITS: MOTION PICTURE CREDIT EXTENSION) line 1 and 23695, and the amount of an y credits reduced pursuant to line 2 paragraph (2) of subdivision (d).
line 3 (3) Certify tax credits allocated to qualified taxpayers. line 4 (A) Establish a verification procedure to update the information line 5 in subparagraph (A) of paragraph (2) of subdivision (g), including, line 6 but not limited to, all of the following:
line 7 (i) The amounts of qualified e xpenditures paid or incurred by line 8 the applicant.
line 9 (ii) The diversity of the workforce employed by the applicant. line 10 (iii) The ethnic and racial mak eup and gender of indi viduals line 11 whose wages are excluded from qualified wages by clause (iv) of line 12 subparagraph (B) of paragraph (21) of subdivision (b). line 13 (B) Establish audit requirements that shall be satisfied before a line 14 credit certificate may be issued by the California Film Commission. line 15 (C) (i) Establish a procedure for a qualified taxpayer to report line 16 to the California Film Commission, prior to the issuance of a credit line 17 certificate, the following information:
line 18 (I) If readily available, a list of the states, pro vinces, or other line 19 jurisdictions in which an y member of the applicant’ s combined line 20 reporting group in the same business unit as the qualified taxpayer line 21 that, in the preceding calendar year , has produced a qualified line 22 motion picture intended for release in the United States mark et. line 23 For purposes of this clause, “qualified motion picture” shall not line 24 include any episodes of a television series that were complete or line 25 in production prior to July 1, 2020.
line 26 (II) Whether a qualified motion picture described in subclause line 27 (I) was awarded any financial incentive by the state, province, or line 28 other jurisdiction that w as predicated on the performance of line 29 primary principal photography or postproduction in that location. line 30 (ii) The California Film Commission may provide that the report line 31 required by this subparagraph be filed in a single report provided line 32 on a calendar year basis for those qualified taxpayers that receive line 33 multiple credit certificates in a calendar year. line 34 (D) Issue a credit certificate to a qualified taxpayer upon line 35 completion of the qualified motion picture reflecting the credit line 36 amount allocated after qualified e xpenditures have been verified line 37 and the jobs ratio computed under this section. The amount of line 38 credit shown on the credit certificate shall not exceed the amount line 39 of credit allocated to that qualified taxpayer pursuant to this section. 94 SB 485 — 49 —
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Communication: Senate Bill 485 - Bill Text (ITEM 2 SENATE BILL 485: INCOME TAXES: TAX CREDITS: MOTION PICTURE CREDIT EXTENSION) line 1 (4) Obtain, when possible, the follo wing information from line 2 applicants that do not receive an allocation of credit:
line 3 (A) Whether the qualified motion picture that w as the subject line 4 of the application was completed.
line 5 (B) If completed, in which state or foreign jurisdiction was the line 6 primary principal photography completed.
line 7 (C) Whether the applicant recei ved an y financial incenti ves line 8 from the state or foreign jurisdiction to make the qualified motion line 9 picture in that location.
line 10 (5) Provide the Legislative Analyst’s Office, upon request, any line 11 or all application materials or an y other materials received from, line 12 or submitted by, the applicants, in electronic format when available, line 13 including, but not limited to, information pro vided pursuant to line 14 clauses (i) to (xi) inclusive, of subparagraph (A) of paragraph (2) line 15 and the di versity workplans provided pursuant to clause (i v) of line 16 subparagraph (B) of paragraph (2) of subdivision (k). line 17 (6) The information provided to the California Film Commission line 18 pursuant to this section shall constitute confidential tax information line 19 for purposes of Article 2 (commencing with Section 19542) of line 20 Chapter 7 of Part 10.2.
line 21 (7) (A) Notwithstanding any other law, on or after July 1, 2025, line 22 2030, the California Film Commission may allocate, pursuant to line 23 this section, any previously allocated credits not certified that have line 24 not previously been added to credit amounts available for allocation line 25 under this section or a successor section or sections. line 26 (B) For purposes of this section, “pre viously allocated credits line 27 not certified” means either:
line 28 (i) Credits allocated under paragraph (1) for which the qualified line 29 taxpayer to which the credit amounts were originally allocated has line 30 notified the California Film Commission in writing that the line 31 qualified taxpayer will not request certification for the allocated line 32 credits.
line 33 (ii) The difference between the amount of credits allocated under line 34 paragraph (1) to a qualified taxpayer and the amount of credits the line 35 California Film Commission certified, for that qualified taxpayer. line 36 For purposes of calculating the dif ference, the California Film line 37 Commission shall not consider any credit amounts for which the line 38 qualified taxpayer notifies the California Film Commission under line 39 clause (i).
94 — 50 — SB 485
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Communication: Senate Bill 485 - Bill Text (ITEM 2 SENATE BILL 485: INCOME TAXES: TAX CREDITS: MOTION PICTURE CREDIT EXTENSION) line 1 (8) Notwithstanding any other la w, on or after July 1, 2025, line 2 2030, the California Film Commission may allocate, pursuant to line 3 this section, an y credit amounts described in subparagraphs (B) line 4 and (E) of paragraph (1) of subdivision (i) that have not previously line 5 been added to credit amounts a vailable for allocation under this line 6 section or a successor section or sections.
line 7 (9) The California Film Commission shall submit a report to line 8 the Legislature, on an annual basis beginning January 1, 2022, on line 9 aggregate diversity information for the productions allocated tax line 10 credits allo wed in this section and the di versity of the motion line 11 picture production industry in California more generally. line 12 (h) (1) The California Film Commission shall annually provide line 13 the Legislative Analyst’s Office, the Franchise Tax Board, and the line 14 California Department of Tax and Fee Administration with a list line 15 of qualified taxpayers and the tax credit amounts allocated to each line 16 qualified taxpayer by the California Film Commission. The list line 17 shall include the names and taxpayer identification numbers, line 18 including taxpayer identification numbers of each partner or line 19 shareholder, as applicable, of the qualified taxpayer. line 20 (2) (A) Notwithstanding paragraph (6) of subdivision (g), the line 21 California Film Commission shall annually post on its internet line 22 website and make available for public release the following:
line 23 (i) A table which includes all of the follo wing information: a line 24 list of qualified taxpayers and the tax credit amounts allocated to line 25 each qualified taxpayer by the California Film Commission, the line 26 number of production days in California the qualified taxpayer line 27 represented in its application would occur, the number of California line 28 jobs that the qualified taxpayer represented in its application would line 29 be directly created by the production, and the total amount of line 30 qualified expenditures expected to be spent by the production. line 31 (ii) A narrative staff summary describing the production of the line 32 qualified taxpayer as well as background information re garding line 33 the qualified taxpayer contained in the qualified taxpayer’ s line 34 application for the credit.
line 35 (iii) For qualified taxpayers allocated a credit, the aggre gate line 36 diversity information collected pursuant to clauses (i v) and (xii) line 37 of subparagraph (A) of paragraph (2) of subdivision (g) organized line 38 per production and an aggre gate compilation describing the line 39 voluntary programs collected pursuant to clause (xiii) of line 40 subparagraph (A) of paragraph (2) of subdivision (g). 94 SB 485 — 51 —
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Communication: Senate Bill 485 - Bill Text (ITEM 2 SENATE BILL 485: INCOME TAXES: TAX CREDITS: MOTION PICTURE CREDIT EXTENSION) line 1 (B) Nothing in this subdivision shall be construed to make the line 2 information submitted by an applicant for a tax credit under this line 3 section a public record.
line 4 (3) The California Film Commission shall pro vide each city line 5 and county in California with an instructional guide that includes, line 6 but is not limited to, a re view of best practices for f acilitating line 7 motion picture production in local jurisdictions, resources on line 8 hosting and encouraging motion picture production, and the line 9 California Film Commission’ s Model Filming Ordinance. The line 10 California Film Commission shall maintain on its internet website line 11 a list of initiati ves by locality that encourage motion picture line 12 production in regions across the state. The list shall be distributed line 13 to each appro ved applicant for the program to highlight local line 14 jurisdictions that offer incentives to facilitate film production. line 15 (i) (1) (A) The aggre gate amount of credits that may be line 16 allocated for a fiscal year pursuant to this section and Section line 17 17053.98, except as provided in subdivision (k) of this section and line 18 subdivision (k) of Section 17053.98, is three hundred thirty million line 19 dollars ($330,000,000), plus any amount described in subparagraph line 20 (B), (C), (D), or (E) in credits for the 2020–21 fiscal year and each line 21 fiscal year thereafter, through and including the 2024–25 2029–30 line 22 fiscal year, except as provided in paragraph (7) of subdivision (g), line 23 plus the amount described in subparagraph (F) in credits for the line 24 2021–22 and 2022–23 fiscal years.
line 25 (B) (i) Subject to clauses (ii) and (iii), the unused allocation line 26 credit amount, if any, for the preceding fiscal year. line 27 (ii) The amount of unused credit allocation attrib utable to line 28 independent films shall only be allocated according to clause (i) line 29 of subparagraph (A) of paragraph (2).
line 30 (iii) The total amount of an y unused credit allocation amount line 31 that is remaining shall only be allocated pursuant to clause (iv) of line 32 subparagraph (A) of paragraph (2).
line 33 (C) The amount of previously allocated credits not certified. line 34 (D) The amount of an y credits reduced pursuant to paragraph line 35 (2) of subdivision (d).
line 36 (E) That portion of any unused allocation credit amount, if any, line 37 attributable to Section 17053.85, 17053.95, 23685, or 23695 line 38 available for that fiscal year in a manner as determined by line 39 regulations promulgated by the California Film Commission. 94 — 52 — SB 485
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Communication: Senate Bill 485 - Bill Text (ITEM 2 SENATE BILL 485: INCOME TAXES: TAX CREDITS: MOTION PICTURE CREDIT EXTENSION) line 1 (F) (i) For fiscal years 2021–22 and 2022–23, the California line 2 Film Commission shall allocate an additional fifteen million dollars line 3 ($15,000,000) in credits to be granted e xclusively to tele vision line 4 series that relocate to California.
line 5 (I) Notwithstanding subparagraph (A) of paragraph (2) of this line 6 subdivision and clause (v) of subparagraph (D) of paragraph (2) line 7 of subdi vision (g), the mone ys allocated pursuant to this line 8 subparagraph shall not be redirected or reallocated. line 9 (II) Notwithstanding paragraph (25) of subdi vision (b), for line 10 purposes of this subparagraph, a “tele vision series that relocated line 11 to California” means a television series, without regard to episode line 12 length or initial media e xhibition, with a minimum production line 13 budget of one million dollars ($1,000,000) per episode that both line 14 filmed at least 75 percent of principal photography days for at least line 15 one episode outside of California and has not filmed more than 25 line 16 percent of principal photograph y days for an y episode inside of line 17 California.
line 18 (ii) For fiscal years 2021–22 and 2022-23, the California Film line 19 Commission shall allocate an additional se venty-five million line 20 dollars ($75,000,000) in credits to be granted e xclusively to line 21 recurring television series.
line 22 (2) (A) Notwithstanding the foregoing, and subject to paragraph line 23 (4) of this subdivision and changes in allocations pursuant to clause line 24 (v) of subparagraph (D) of paragraph (2) of subdi vision (g), the line 25 California Film Commission shall allocate the credit amounts line 26 subject to the following categories:
line 27 (i) Independent films with qualified expenditures of ten million line 28 dollars ($10,000,000) or less shall be allocated 4.8 percent of the line 29 amount specified in paragraph (1). Independent films with qualified line 30 expenditures in excess of ten million dollars ($10,000,000) shall line 31 be allocated 3.2 percent of the amount specified in paragraph (1). line 32 These amounts shall be in addition to any unused allocation credit line 33 amount, if an y, for the preceding fiscal year as described in line 34 subparagraph (B) of paragraph (1).
line 35 (ii) Features shall be allocated 35 percent of the amount specified line 36 in paragraph (1).
line 37 (iii) A relocating television series shall be allocated 17 percent line 38 of the amount specified in paragraph (1).
line 39 (iv) A new television series, pilots for a ne w television series, line 40 miniseries, and recurring tele vision series shall be allocated 40 94 SB 485 — 53 —
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Communication: Senate Bill 485 - Bill Text (ITEM 2 SENATE BILL 485: INCOME TAXES: TAX CREDITS: MOTION PICTURE CREDIT EXTENSION) line 1 percent of the amount specified in paragraph (1), plus any unused line 2 allocation credit amount, if an y, for the preceding fiscal year as line 3 described in subparagraph (B) of paragraph (1).
line 4 (B) Within an y allocation period for credits to a relocating line 5 television series, an y unused amount shall be reallocated to the line 6 category described in clause (iv) of subparagraph (A) and, if any line 7 unused amount remains, reallocated in the next allocation period line 8 for credits to a relocating television series.
line 9 (C) With respect to a relocating television series issued a credit line 10 in a subsequent year pursuant to clause (v) of subparagraph (D) line 11 of paragraph (2) of subdivision (g), that subsequent credit amount line 12 shall be allowed from the allocation amount described in clause line 13 (iv) of subparagraph (A).
line 14 (3) Any act that reduces the amount that may be allocated line 15 pursuant to paragraph (1) constitutes a change in state tax es for line 16 the purpose of increasing revenues within the meaning of Section line 17 3 of Article XIIIA of the California Constitution and may be passed line 18 by not less than two-thirds of all Members elected to each of the line 19 two houses of the Legislature.
line 20 (4) (A) Except as pro vided in subparagraph (B), a qualified line 21 motion picture, as defined in subdivision (k), shall not be eligible line 22 for an allocation under subdi visions (a) to (j), inclusi ve, if it line 23 receives a credit under subdivision (k) during that fiscal year. line 24 (B) Notwithstanding an y other pro vision in this section, a line 25 recurring television series, as that term is used under subdivision line 26 (k), that is no longer eligible for the credit in paragraph (9) of line 27 subdivision (k) shall be eligible to apply for an allocation of credits line 28 under subdivisions (a) to (j), inclusive.
line 29 (j) The California Film Commission shall have the authority to line 30 allocate tax credits in accordance with this section and in line 31 accordance with any regulations prescribed pursuant to subdivision line 32 (e) upon adoption.
line 33 (k) (1) For taxable years beginning on or after January 1, 2022, line 34 and before January 1, 2032, there shall be allo wed to a qualified line 35 taxpayer a credit ag ainst the “tax,” as defined in Section 23036, line 36 subject to allocation by the California Film Commission, in an line 37 amount equal to 20 percent or 25 percent, whiche ver is the line 38 applicable credit percentage described in paragraph (4) of line 39 subdivision (a), as modified by paragraph (3) of this subdivision, line 40 of the qualified e xpenditures paid or incurred during the taxable 94 — 54 — SB 485
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Communication: Senate Bill 485 - Bill Text (ITEM 2 SENATE BILL 485: INCOME TAXES: TAX CREDITS: MOTION PICTURE CREDIT EXTENSION) line 1 year by a qualified motion picture produced in the state at a line 2 certified studio construction project.
line 3 (2) For purposes of this subdi vision, the definitions in line 4 subdivision (b) shall apply e xcept as otherwise pro vided in this line 5 subdivision.
line 6 (A) “Certified studio construction project” means a construction line 7 or renovation project certified by the California Film Commission line 8 as having met all of the following criteria:
line 9 (i) The project pro vides for the construction or reno vation of line 10 one or more soundstages located in the state.
line 11 (ii) Actual construction or renovation expenditures are not less line 12 than twenty-fiv e million dollars ($25,000,000) of actual line 13 construction or renovation expenditures made over not more than line 14 five continuous calendar years.
line 15 (iii) The construction or reno vation of each certified studio line 16 construction project is performed in accordance with Section line 17 17053.99.
line 18 (iv) The construction or reno vation of each certified studio line 19 construction project commences pursuant to a foundation permit line 20 or a structural building permit for the construction or reno vation line 21 that is issued after the ef fective date of the act adopting this line 22 subdivision.
line 23 (v) The applicant shall not have received a California Competes line 24 Grant under Section 12096.6 of the Government Code for wages line 25 or investment related to construction of the studio construction line 26 project.
line 27 (B) “Qualified motion picture” means a qualified motion picture, line 28 as defined in subdi vision (b), that meets all of the follo wing line 29 requirements:
line 30 (i) For each taxable year for which the credit is claimed by the line 31 qualified motion picture, films at least 50 percent of its principal line 32 photography stage shooting days on a soundstage or soundstages line 33 certified as a certified studio construction project, for which line 34 certification was issued within the prior 36 months. line 35 (ii) For each taxable year for which the credit is claimed by a line 36 qualified motion picture, incurs at least seven million five hundred line 37 thousand dollars ($7,500,000) in qualified wages for filming on a line 38 soundstage or soundstages certified as a certified studio line 39 construction project that are paid or incurred in that taxable year. 94 SB 485 — 55 —
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Communication: Senate Bill 485 - Bill Text (ITEM 2 SENATE BILL 485: INCOME TAXES: TAX CREDITS: MOTION PICTURE CREDIT EXTENSION) line 1 (iii) Is produced by a qualified taxpayer that is either of the line 2 following:
line 3 (I) More than 50 percent o wned, directly or indirectly, by the line 4 same owner or o wners of the soundstage or soundstages that is line 5 part of a certified studio construction project on which the line 6 production is filmed.
line 7 (II) Entered into a contract or lease of 10 years or more with line 8 the owner or owners of a certified studio construction project on line 9 which the production is filmed.
line 10 (iv) Provides a di versity w orkplan that is appro ved by the line 11 California Film Commission.
line 12 (C) For purposes of this subdi vision, a qualified taxpayer and line 13 a taxpayer include a passthrough entity and a disregarded entity. line 14 (3) (A) The diversity workplan required pursuant to clause (iv) line 15 of subparagraph (B) of paragraph (2) shall include all of the line 16 following:
line 17 (i) A statement of the di versity goals the motion picture will line 18 seek to achieve in terms of qualified wages paid by race, ethnicity, line 19 and gender.
line 20 (ii) A statement of the di versity goals the motion picture will line 21 seek to achie ve for indi viduals whose w ages are e xcluded from line 22 qualified wages as set forth in clause (iv) of subparagraph (B) of line 23 paragraph (21) of subdi vision (b), with respect to both line 24 compensation and to the representation of diversity in the creative line 25 aspects of the motion picture.
line 26 (iii) A plan of what strate gies the motion picture will emplo y line 27 to achieve the goals in clauses (i) and (ii).
line 28 (B) The diversity workplan shall include goals that are broadly line 29 reflective of California’ s population, in terms of race, ethnicity , line 30 and gender.
line 31 (C) The California Film Commission shall approve or reject the line 32 diversity workplan of an applicant, to the extent allowed by federal line 33 and state law.
line 34 (D) (i) The California Film Commission shall not certify an y line 35 tax credit under this subdi vision until they have received a final line 36 diversity report from the applicant.
line 37 (ii) The final di versity report shall calculate and pro vide line 38 evidence for the e xtent to which the applicant met the di versity line 39 goals laid out in their diversity workplan.
94 — 56 — SB 485
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Communication: Senate Bill 485 - Bill Text (ITEM 2 SENATE BILL 485: INCOME TAXES: TAX CREDITS: MOTION PICTURE CREDIT EXTENSION) line 1 (iii) The California Film Commission shall ha ve the authority line 2 to audit the final diversity report to determine if the diversity goals line 3 set forth in the applicant’s diversity workplan for the motion picture line 4 production were achieved.
line 5 (iv) If the California Film Commission determines that the line 6 applicant has met or made a good faith effort to meet the diversity line 7 goals in its di versity workplan, the applicant’s credit percentage line 8 described in paragraph (1) shall be increased by up to four line 9 percentage points as follows:
line 10 (I) By two percentage points if the California Film Commission line 11 determines that the applicant has met or made a good f aith effort line 12 to meet the di versity goals with respect to the di versity of the line 13 workforce emplo yed by the applicant in its di versity w orkplan line 14 statement.
line 15 (II) By two percentage points if the California Film Commission line 16 determines that the applicant has met or made a good f aith effort line 17 to meet the diversity goals with respect to individuals whose wages line 18 are excluded from qualified w ages as set forth in clause (i v) of line 19 subparagraph (B) of paragraph (21) of subdi vision (b), in its line 20 diversity workplan statement.
line 21 (E) The California Film Commission, in consultation with the line 22 Governor’s Office of Business and Economic Development, shall line 23 establish guidelines to evaluate diversity workplans as described line 24 in this paragraph. The guidelines shall be posted on the California line 25 Film Commission’s internet website.
line 26 (4) The credit allo wed under this subdi vision shall be line 27 administered in accordance with subdivisions (a), (b), (c), (d), (h), line 28 and (l), except that paragraph (7) of subdivision (b) shall not apply line 29 and paragraph (2) of subdivision (d) shall not apply. line 30 (5) Subparagraph (A) of paragraph (2), subparagraphs (A), (B), line 31 and (C) of paragraph (3), and paragraphs (4), (5), and (6) of line 32 subdivision (g) shall apply.
line 33 (6) A conflict between this subdi vision and an y other line 34 subdivisions in this section shall be reconciled in f avor of this line 35 subdivision.
line 36 (7) The aggregate amount of credit allocated by the California line 37 Film Commission pursuant to subdivisions (a) to (j), inclusive, of line 38 this section and Section 17053.98 shall not be reduced by the tax line 39 credit allowed pursuant to this subdivision. The amount of credit line 40 allowed by this subdivision shall not be limited by subdivision (i). 94 SB 485 — 57 —
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Communication: Senate Bill 485 - Bill Text (ITEM 2 SENATE BILL 485: INCOME TAXES: TAX CREDITS: MOTION PICTURE CREDIT EXTENSION) line 1 (8) (A) The credit allocated pursuant to this subdi vision shall line 2 be allo wed for the taxable year in which the California Film line 3 Commission issues a credit certificate in accordance with the line 4 procedures provided for in subdivision (g) for the qualified motion line 5 picture. The California Film Commission shall issue a credit line 6 certificate to a qualified taxpayer upon completion of the qualified line 7 motion picture reflecting the credit amount allocated after qualified line 8 expenditures have been verified.
line 9 (B) (i) The California Film Commission, commencing with line 10 fiscal year 2021–22, shall allocate tax credits each year to qualified line 11 motion pictures meeting the criteria of this subdivision. The total line 12 amount of credits that may be allocated under this subdi vision is line 13 one hundred fifty million dollars ($150,000,000). A season of a line 14 series or feature film may not be allocated more than twelve million line 15 dollars ($12,000,000) under this subdivision. Recurring television line 16 series receiving an initial allocation under this subdi vision shall line 17 be allocated for subsequent seasons no more than allo wed under line 18 this paragraph.
line 19 (ii) A qualified motion picture shall not be eligible to receive a line 20 credit allocation under this subdi vision if that qualified motion line 21 picture receives a credit allocation under subdi visions (a) to (j), line 22 inclusive, for the fiscal year. However, subject to paragraph (4) of line 23 subdivision (i), any television series, relocating television series, line 24 or any new television series based on a pilot for a ne w television line 25 series that is no longer eligible for a credit under this subdivision line 26 pursuant to paragraph (9) may apply to recei ve an allocation of line 27 credits pursuant to subdivisions (a) to (j), inclusive. line 28 (C) In any year the tax credits under this paragraph ha ve been line 29 allocated by the California Film Commission, a qualified motion line 30 picture or a recurring television series that satisfies the criteria of line 31 this subdivision, but have not recei ved an allocation of credits, line 32 may apply to recei ve an allocation of credits pursuant to line 33 subdivision (i).
line 34 (D) Credits shall be allocated based on the assumption that the line 35 motion picture meets the diversity criteria specified in clause (iv) line 36 of subparagraph (D) of paragraph (3).
line 37 (9) (A) A qualified motion picture meeting the requirements line 38 of this subdivision during the first three years after the certified line 39 studio construction project is certified by the California Film line 40 Commission shall be allo wed a credit under this subdi vision 94 — 58 — SB 485
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Communication: Senate Bill 485 - Bill Text (ITEM 2 SENATE BILL 485: INCOME TAXES: TAX CREDITS: MOTION PICTURE CREDIT EXTENSION) line 1 commencing with its first year of filming in the certified studio line 2 construction project facility and for each successive year until the line 3 certified studio construction project has reached its fourth year line 4 after being certified, as long as the qualified motion picture line 5 continues to satisfy the criteria of this subdivision and to the extent line 6 the total credit amount the California Film Commission is permitted line 7 to allocate pursuant to subparagraph (B) of paragraph (8) has not line 8 previously been allocated.
line 9 (B) (i) Subject to the allocation of credits under paragraph (8) line 10 of this subdi vision, if the first year of production of a qualified line 11 motion picture occurs in the fourth year after the certified studio line 12 construction project is certified by the California Film Commission line 13 or any year thereafter, the qualified motion picture shall submit line 14 an application subject to the annual cap and the allocation credit line 15 amounts based on categories described in subdivision (i), subject line 16 to the modifications included in this subparagraph. line 17 (ii) For feature films and ne w television series, the jobs ratio line 18 used to rank qualified motion pictures in subparagraph (D) of line 19 paragraph (2) of subdi vision (g) shall be equal to the product of line 20 the jobs ratio calculated in paragraph (7) of subdi vision (b) and line 21 133 percent.
line 22 (10) Within six months of the effective date of this subdivision, line 23 the California Film Commission shall:
line 24 (A) Establish procedures to certify a certified studio construction line 25 project.
line 26 (B) Establish procedures to v erify a qualified motion picture line 27 has met the criteria established in this section for filming in a line 28 certified studio construction project facility. That procedure shall line 29 include a requirement that the qualified motion picture pay 0.5 line 30 percent of the appro ved credit amount to the Career P athways line 31 Training program specified in subdivision (e).
line 32 (C) (i) Implementation of this subdi vision for the 2021–22 line 33 fiscal year is deemed an emer gency and necessary for the line 34 immediate preservation of the public peace, health, and safety, or line 35 general welfare and, therefore, the California Film Commission line 36 is hereby authorized to adopt emergency regulations to implement line 37 this subdivision during the 2021–22 fiscal year in accordance with line 38 the rulemaking pro visions of the Administrative Procedure Act line 39 (Chapter 3.5 (commencing with Section 11340) of P art 1 of line 40 Division 3 of Title 2 of the Government Code).
94 SB 485 — 59 —
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Communication: Senate Bill 485 - Bill Text (ITEM 2 SENATE BILL 485: INCOME TAXES: TAX CREDITS: MOTION PICTURE CREDIT EXTENSION) line 1 (ii) The California Film Commission shall adopt regulations in line 2 order to implement this paragraph.
line 3 (11) In the case where the credit allo wed by this subdi vision line 4 exceeds the taxpayer’s tax liability computed under this part, the line 5 excess credit may be carried o ver to reduce the “tax” in the line 6 following taxable year , and succeeding eight taxable years, if line 7 necessary, until the credit has been exhausted.
line 8 (12) Upon completion of construction or reno vation of the line 9 soundstage or soundstages, the taxpayer shall certify to the line 10 California Film Commission that all contractors and subcontractors line 11 performing construction work on the soundstage or soundstages line 12 were required to use a skilled and trained w orkforce to perform line 13 such work in accordance with subdivision (b) of Section 17053.99. line 14 (13) (A) Upon completion of construction or renovation of the line 15 soundstage or soundstages, the soundstage or soundstages shall line 16 be continuously operated, maintained, and repaired by any of the line 17 following:
line 18 (i) A workforce that is paid at least the general pre vailing rate line 19 of per diem w ages for the type of w ork and geographic area, as line 20 determined by the Director of Industrial Relations pursuant to line 21 Sections 1773 and 1773.9 of the Labor Code, if such services are line 22 performed by a workforce that is employed directly, or indirectly line 23 through a motion picture payroll services company, by the owner line 24 or affiliate of the o wner of the soundstage or lessee of the line 25 soundstage described in subclause (II) of clause (iii) of line 26 subparagraph (B) of paragraph (2) of this subdivision. line 27 (ii) A skilled and trained w orkforce as defined in Chapter 2.9 line 28 (commencing with Section 2600) of P art 1 of Di vision 2 of the line 29 Public Contract Code, if such services are provided by third-party line 30 vendors.
line 31 (B) Each year follo wing completion of construction or line 32 renovation of the soundstage or soundstages that a qualified motion line 33 picture is allocated a tax credit pursuant to this subdi vision, the line 34 qualified taxpayer shall certify to the California Film Commission line 35 both of the following:
line 36 (i) The total amount of payments to third-party v endors or line 37 qualified w ages for operation, maintenance, and repair of the line 38 certified soundstage.
line 39 (ii) The amount and percentage of the total amount of payments line 40 to third-party v endors or qualified w ages for operation, 94 — 60 — SB 485
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Communication: Senate Bill 485 - Bill Text (ITEM 2 SENATE BILL 485: INCOME TAXES: TAX CREDITS: MOTION PICTURE CREDIT EXTENSION) line 1 maintenance, and repair of the certified soundstage performed by line 2 each workforce described in subparagraph (A).
line 3 (C) If the percentage paid to w orkers in clause (i) of line 4 subparagraph (A) is certified to be 90 percent of the total amount line 5 under clause (i) of subparagraph (B) or greater , the qualified line 6 taxpayer shall be entitled to 100 percent of the applicable credit line 7 issued under this subdivision for the period. If the percentage paid line 8 to workers in clause (i) of subparagraph (A) is certified to be less line 9 than 90 percent of the total amount under clause (i) of subparagraph line 10 (B) but greater than or equal to 75 percent of the total amount line 11 under clause (i) of subparagraph (B), the qualified taxpayer shall line 12 be entitled to 50 percent of the applicable credit issued under this line 13 subdivision for the period. If the percentage paid to w orkers in line 14 clause (i) of subparagraph (A) is certified to be less than 75 percent line 15 of the total amount under clause (i) of subparagraph (B), the line 16 qualified taxpayer shall not be entitled to any credit issued under line 17 this subdivision for the applicable period.
line 18 (l) Section 41 shall not apply to the credits allo wed by this line 19 section.
line 20 SEC. 3. This act provides for a tax levy within the meaning of line 21 Article IV of the California Constitution and shall go into line 22 immediate effect.
line 23
line 24
line 25 All matter omitted in this version of the bill
line 26 appears in the bill as amended in the
line 27 Senate, May 20, 2021. (JR11)
line 28
line 29
line 30
line 31 CORRECTIONS:
line 32 Heading—Line 5.
line 33
O
94 SB 485 — 61 —
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Communication: Senate Bill 485 - Bill Text (ITEM 2 SENATE BILL 485: INCOME TAXES: TAX CREDITS: MOTION PICTURE CREDIT EXTENSION)
Legislative Committee – March 8, 2022
Senate Bill 897 – Accessory Dwelling Units: Junior Accessory Dwelling Units 1 Recommendation
Legislative Committee recommend the City Council adopt an “oppose” position regarding Senate Bill 897.
Summary
Authored by Senator Bob Wieckowski (D-10-Fremont), Senate Bill 897 preempts local land use authority related to accessory dwelling units (ADU) and junior accessory dwelling units (JADU).
Background
For the purpose of this staff summary, as defined in Section 65852.22 of the Government Code:
• An ADU is an attached or detached residential dwelling unit which provides complete independent living facilities on the same parcel as a single-family or multi-family dwelling. • A JADU is a unit that is no more than 500 square feet in size and contained entirely within a single-family residence.
The initial State law requiring local agencies to provide by ordinance for the creation of ADUs took effect on January 1, 2017. Prior to this law, ADU permits were under the full discretion of local governments. The original intent of the ADU state law was to implement standards and ensure uniformity throughout the state on the issuance of ADUs by local governments.
Several bills proposing to preempt local discretion and authority in regulating the review of ADU and JADU applications were introduced during the 2019 and 2020 state legislative years. Of those bills introduced, various pieces of legislation were approved by the legislature and signed into law by the Governor, including preemptions to local authority regarding parking, lot size, and approval processes for ADUs and JADUs.
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Communication: Senate Bill 897 - Staff Report (ITEM 3 SENATE BILL 897: ACCESSORY DWELLING UNITS: JUNIOR ACCESSORY DWELLING 2 Analysis
Senate Bill 897, increases the maximum height of an ADU that a local government must approve, from 16 feet to 25 feet, if the project is located on a parcel that has an existing residential property.
The City recognizes the importance of land use planning and development of housing to meet the growth and needs of the community. Since the state ADU law took effect, the City has issued approximately 236 ADU permits (21 in 2017, 38 in 2018, 42 in 2019, 70 in 2020, and 65 in 2021).
This bill weakens local land use authority related to ADUs and eliminates the City’s ability to properly plan and develop residential zoning of single family and multi-family homes. Additionally, this bill would adversely impact the City’s ability to impose reasonable ADU requirements and/or conditions that take into consideration the City’s residential character and local unique circumstances.
The City Council, upon the recommendation of the Legislative Committee, opposed a similar bill, Assembly Bill 916 (Salas), at the February 8, 2022, regular City Council meeting.
Additionally, the recommendation to oppose Senate Bill 897 is consistent with the City of Santa Clarita 2022 Executive and Legislative Platform. Specifically, Component 1 under the “State” section advises that the City Council, “Oppose legislation that would interfere with, limit or eliminate the decision-making authority of municipalities in the area of local land use.” Supporters
Unknown at this time.
Opponents
Unknown at this time.
Bill Status
Senate Bill 897 was introduced on February 1, 2022, and has a hearing scheduled in the Senate Housing Committee on March 24, 2022.
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Communication: Senate Bill 897 - Staff Report (ITEM 3 SENATE BILL 897: ACCESSORY DWELLING UNITS: JUNIOR ACCESSORY DWELLING SENATE BILL No. 897
Introduced by Senator Wieckowski
February 1, 2022
An act to amend Section 65852.22 of, to add Section 65852.23 to, and to repeal and amend Section 65852.2 of, the Go vernment Code, and to add Chapter 6.9 (commencing with Section 50678) to Part 2 of Division 31 of the Health and Safety Code, relating to land use. legislative counsel’s digest
SB 897, as introduced, Wieckowski. Accessory dwelling units: junior accessory dwelling units.
(1) Existing law, the Planning and Zoning La w, authorizes a local agency, by ordinance or ministerial approval, to provide for the creation of accessory dwelling units in areas zoned for residential use, as specified. Existing law provides that an accessory dwelling unit may either be an attached or detached residential dwelling unit, and prescribes the minimum and maximum unit size requirements, height limitations, and setback requirements that a local agency may establish, including a 16-foot height limitation and a 4-foot side and rear setback requirement.
This bill would increase the maximum height limitation that may be imposed by a local agency on an accessory dwelling unit to 25 feet.
Existing law requires an ordinance that pro vides for the creation of an accessory dwelling unit to require accessory dwelling units to comply with local building code requirements that apply to detached dwellings, as appropriate. Existing law also prohibits an ordinance from requiring an accessory dwelling unit to pro vide fire sprinklers if the y are not required for the primary residence.
This bill would provide that the construction of an accessory dwelling unit does not constitute an occupancy change under the local building
99 Packet Pg. 74
Communication: Senate Bill 897 - Bill Text (ITEM 3 SENATE BILL 897: ACCESSORY DWELLING UNITS: JUNIOR ACCESSORY DWELLING code. The bill w ould also prohibit the construction of an accessory dwelling unit from triggering a requirement that fire sprinklers be installed in the proposed or existing primary dwelling.
Existing law provides that a local agency shall ministerially approve an application for a b uilding permit within a residential or mix ed-use zone to create not more than 2 accessory dwelling units that are located on a lot that has an existing multifamily dwelling, but are detached from that multifamily dwelling and are subject to a height limitation of 16 feet and a 4-foot side and rear setback requirement.
This bill would change the height limitation applicable to an accessory dwelling unit subject to ministerial approval to 25 feet. The bill, if the existing multifamily dwelling exceeds a height of 25 feet or has a rear or side setback of less than 4 feet, would prohibit a local agency from requiring any modification to the existing multifamily dwelling to satisfy these requirements. The bill would prohibit a local agency from rejecting an application for an accessory dwelling unit because the e xisting multifamily dwelling exceeds a height of 25 feet or has a rear or side setback of less than 4 feet.
Existing law, until January 1, 2025, prohibits a local agenc y from imposing an o wner-occupant requirement on a proposed accessory dwelling unit on a lot that includes a proposed or existing single-family dwelling.
This bill would delete the expiration date of this provision. (2) Existing law also pro vides for the creation of junior accessory dwelling units by local ordinance, or, if a local agency has not adopted an ordinance, by ministerial appro val, in accordance with specified standards and conditions. Existing la w requires an ordinance that provides for the creation of a junior accessory dwelling unit to require the unit to be constructed within the w alls of the proposed or existing single-family residence and to require the unit to include a separate entrance from the main entrance to the proposed or e xisting single-family residence.
This bill w ould specify that enclosed uses within the proposed or existing single-family residence, such as attached garages, are considered a part of the proposed or existing single-family residence. The bill would require a junior accessory dwelling unit that does not include separate sanitation facilities to include a separate entrance from the main entrance to the structure, with an interior entry to the main living area. (3) Existing la w requires a local agenc y, in enforcing b uilding standards applicable to accessory dwelling units, to delay enforcement 99 — 2 — SB 897
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Communication: Senate Bill 897 - Bill Text (ITEM 3 SENATE BILL 897: ACCESSORY DWELLING UNITS: JUNIOR ACCESSORY DWELLING for up to 5 years upon the owner submitting an application requesting the delay on the basis that correcting the violation is not necessary to protect health and safety.
This bill would prohibit a local agency from denying a permit for a constructed, but unpermitted, accessory dwelling unit because the unit is in violation of building standards or state or local standards applicable to accessory dwelling units, unless the local agenc y makes a finding that correcting the violation is necessary to protect the health and safety of the public or occupants of the structure
(4) Existing law requires the Department of Housing and Community Development to administer various programs intended to promote the development of housing, including the Multifamily Housing Program, pursuant to which the department pro vides financial assistance in the form of deferred payment loans to pay for the eligible costs of development for specified activities.
This bill, upon appropriation by the Le gislature, would require the department to establish and administer a grant program for the purpose of funding the construction and maintenance of accessory dwelling units and junior accessory dwelling units. The bill w ould create the California Accessory Dwelling Unit Fund and, upon appropriation by the Legislature, require the department to distribute moneys in the fund to eligible recipients.
(5) By imposing ne w duties on local go vernments with respect to the approval of accessory dwelling units and junior accessory dwelling units, the bill would impose a state-mandated local program.
The California Constitution requires the state to reimb urse local agencies and school districts for certain costs mandated by the state.
Statutory provisions establish procedures for making that reimbursement.
This bill would provide that no reimbursement is required by this act for a specified reason.
Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: yes.
The people of the State of California do enact as follows:
line 1 SECTION 1. Section 65852.2 of the Government Code , as line 2 amended by Section 1 of Chapter 343 of the Statutes of 2021, is line 3 amended to read:
line 4 65852.2. (a) (1) A local agency may, by ordinance, pro vide line 5 for the creation of accessory dwelling units in areas zoned to allow 99 SB 897 — 3 —
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Communication: Senate Bill 897 - Bill Text (ITEM 3 SENATE BILL 897: ACCESSORY DWELLING UNITS: JUNIOR ACCESSORY DWELLING line 1 single-family or multif amily dwelling residential use. The line 2 ordinance shall do all of the following:
line 3 (A) Designate areas within the jurisdiction of the local agency line 4 where accessory dwelling units may be permitted. The designation line 5 of areas may be based on the adequacy of water and sewer services line 6 and the impact of accessory dwelling units on traffic flo w and line 7 public safety. A local agency that does not provide water or sewer line 8 services shall consult with the local water or sewer service provider line 9 regarding the adequac y of w ater and se wer services before line 10 designating an area where accessory dwelling units may be line 11 permitted.
line 12 (B) (i) Impose standards on accessory dwelling units that line 13 include, but are not limited to, parking, height, setback, landscape, line 14 architectural review, maximum size of a unit, and standards that line 15 prevent adverse impacts on any real property that is listed in the line 16 California Register of Historical Resources. These standards shall line 17 not include requirements on minimum lot size.
line 18 (ii) Notwithstanding clause (i), a local agenc y may reduce or line 19 eliminate parking requirements for an y accessory dwelling unit line 20 located within its jurisdiction.
line 21 (C) Provide that accessory dwelling units do not e xceed the line 22 allowable density for the lot upon which the accessory dwelling line 23 unit is located, and that accessory dwelling units are a residential line 24 use that is consistent with the e xisting general plan and zoning line 25 designation for the lot.
line 26 (D) Require the accessory dwelling units to comply with all of line 27 the following:
line 28 (i) Except as pro vided in Section 65852.26, the accessory line 29 dwelling unit may be rented separate from the primary residence, line 30 but may not be sold or otherwise con veyed separate from the line 31 primary residence.
line 32 (ii) The lot is zoned to allo w single-f amily or multif amily line 33 dwelling residential use and includes a proposed or e xisting line 34 dwelling.
line 35 (iii) The accessory dwelling unit is either attached to, or located line 36 within, the proposed or e xisting primary dwelling, including line 37 attached garages, storage areas or similar uses, or an accessory line 38 structure or detached from the proposed or e xisting primary line 39 dwelling and located on the same lot as the proposed or e xisting line 40 primary dwelling.
99 — 4 — SB 897
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Communication: Senate Bill 897 - Bill Text (ITEM 3 SENATE BILL 897: ACCESSORY DWELLING UNITS: JUNIOR ACCESSORY DWELLING line 1 (iv) If there is an existing primary dwelling, the total floor area line 2 of an attached accessory dwelling unit shall not exceed 50 percent line 3 of the existing primary dwelling.
line 4 (v) The total floor area for a detached accessory dwelling unit line 5 shall not exceed 1,200 square feet.
line 6 (vi) No passageway shall be required in conjunction with the line 7 construction of an accessory dwelling unit.
line 8 (vii) No setback shall be required for an existing living area or line 9 accessory structure or a structure constructed in the same location line 10 and to the same dimensions as an e xisting structure that is line 11 converted to an accessory dwelling unit or to a portion of an line 12 accessory dwelling unit, and a setback of no more than four feet line 13 from the side and rear lot lines shall be required for an accessory line 14 dwelling unit that is not converted from an existing structure or a line 15 new structure constructed in the same location and to the same line 16 dimensions as an existing structure.
line 17 (viii) Local building code requirements that apply to detached line 18 dwellings, as appropriate. appropriate, except that the construction line 19 of an accessory dwelling unit shall not constitute an occupancy line 20 change under the local building code.
line 21 (ix) Approval by the local health officer where a private sewage line 22 disposal system is being used, if required.
line 23 (x) (I) Parking requirements for accessory dwelling units shall line 24 not exceed one parking space per accessory dwelling unit or per line 25 bedroom, whiche ver is less. These spaces may be pro vided as line 26 tandem parking on a driveway.
line 27 (II) Offstreet parking shall be permitted in setback areas in line 28 locations determined by the local agenc y or through tandem line 29 parking, unless specific findings are made that parking in setback line 30 areas or tandem parking is not feasible based upon specific site or line 31 regional topographical or fire and life safety conditions. line 32 (III) This clause shall not apply to an accessory dwelling unit line 33 that is described in subdivision (d).
line 34 (xi) When a g arage, carport, or co vered parking structure is line 35 demolished in conjunction with the construction of an accessory line 36 dwelling unit or converted to an accessory dwelling unit, the local line 37 agency shall not require that those of fstreet parking spaces be line 38 replaced.
line 39 (xii) Accessory dwelling units shall not be required to provide line 40 fire sprinklers if they are not required for the primary residence. 99 SB 897 — 5 —
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Communication: Senate Bill 897 - Bill Text (ITEM 3 SENATE BILL 897: ACCESSORY DWELLING UNITS: JUNIOR ACCESSORY DWELLING line 1 The construction of an accessory dwelling unit shall not trigger a line 2 requirement for fire sprinklers to be installed in the pr oposed or line 3 existing primary dwelling.
line 4 (2) The ordinance shall not be considered in the application of line 5 any local ordinance, policy, or program to limit residential growth. line 6 (3) A permit application for an accessory dwelling unit or a line 7 junior accessory dwelling unit shall be considered and appro ved line 8 ministerially without discretionary re view or a hearing, line 9 notwithstanding Section 65901 or 65906 or an y local ordinance line 10 regulating the issuance of v ariances or special use permits. The line 11 permitting agency shall act on the application to create an accessory line 12 dwelling unit or a junior accessory dwelling unit within 60 days line 13 from the date the local agency receives a completed application if line 14 there is an existing single-family or multifamily dwelling on the line 15 lot. If the permit application to create an accessory dwelling unit line 16 or a junior accessory dwelling unit is submitted with a permit line 17 application to create a new single-family dwelling on the lot, the line 18 permitting agency may delay acting on the permit application for line 19 the accessory dwelling unit or the junior accessory dwelling unit line 20 until the permitting agency acts on the permit application to create line 21 the new single-family dwelling, but the application to create the line 22 accessory dwelling unit or junior accessory dwelling unit shall be line 23 considered without discretionary review or hearing. If the applicant line 24 requests a delay , the 60-day time period shall be tolled for the line 25 period of the delay . If the local agenc y has not acted upon the line 26 completed application within 60 days, the application shall be line 27 deemed approved. A local agency may charge a fee to reimburse line 28 it for costs incurred to implement this paragraph, including the line 29 costs of adopting or amending any ordinance that provides for the line 30 creation of an accessory dwelling unit.
line 31 (4) An existing ordinance governing the creation of an accessory line 32 dwelling unit by a local agency or an accessory dwelling ordinance line 33 adopted by a local agency shall provide an approval process that line 34 includes only ministerial provisions for the approval of accessory line 35 dwelling units and shall not include an y discretionary processes, line 36 provisions, or requirements for those units, e xcept as otherwise line 37 provided in this subdi vision. If a local agenc y has an e xisting line 38 accessory dwelling unit ordinance that f ails to meet the line 39 requirements of this subdivision, that ordinance shall be null and line 40 void and that agency shall thereafter apply the standards established 99 — 6 — SB 897
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Communication: Senate Bill 897 - Bill Text (ITEM 3 SENATE BILL 897: ACCESSORY DWELLING UNITS: JUNIOR ACCESSORY DWELLING line 1 in this subdi vision for the appro val of accessory dwelling units, line 2 unless and until the agency adopts an ordinance that complies with line 3 this section.
line 4 (5) No other local ordinance, policy, or regulation shall be the line 5 basis for the delay or denial of a b uilding permit or a use permit line 6 under this subdivision.
line 7 (6) This subdivision establishes the maximum standards that line 8 local agencies shall use to evaluate a proposed accessory dwelling line 9 unit on a lot that includes a proposed or e xisting single-family line 10 dwelling. No additional standards, other than those pro vided in line 11 this subdi vision, shall be used or imposed, including an y line 12 owner-occupant requirement, e xcept that a local agenc y may line 13 require that the property be used for rentals of terms longer than line 14 30 days.
line 15 (7) A local agency may amend its zoning ordinance or general line 16 plan to incorporate the policies, procedures, or other pro visions line 17 applicable to the creation of an accessory dwelling unit if these line 18 provisions are consistent with the limitations of this subdivision. line 19 (8) An accessory dwelling unit that conforms to this subdivision line 20 shall be deemed to be an accessory use or an accessory b uilding line 21 and shall not be considered to exceed the allowable density for the line 22 lot upon which it is located, and shall be deemed to be a residential line 23 use that is consistent with the e xisting general plan and zoning line 24 designations for the lot. The accessory dwelling unit shall not be line 25 considered in the application of an y local ordinance, polic y, or line 26 program to limit residential growth.
line 27 (b) When a local agenc y that has not adopted an ordinance line 28 governing accessory dwelling units in accordance with subdivision line 29 (a) recei ves an application for a permit to create an accessory line 30 dwelling unit pursuant to this subdi vision, the local agency shall line 31 approve or disappro ve the application ministerially without line 32 discretionary review pursuant to subdi vision (a). The permitting line 33 agency shall act on the application to create an accessory dwelling line 34 unit or a junior accessory dwelling unit within 60 days from the line 35 date the local agency receives a completed application if there is line 36 an existing single-family or multifamily dwelling on the lot. If the line 37 permit application to create an accessory dwelling unit or a junior line 38 accessory dwelling unit is submitted with a permit application to line 39 create a ne w single-f amily dwelling on the lot, the permitting line 40 agency may delay acting on the permit application for the accessory 99 SB 897 — 7 —
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Communication: Senate Bill 897 - Bill Text (ITEM 3 SENATE BILL 897: ACCESSORY DWELLING UNITS: JUNIOR ACCESSORY DWELLING line 1 dwelling unit or the junior accessory dwelling unit until the line 2 permitting agency acts on the permit application to create the new line 3 single-family dwelling, but the application to create the accessory line 4 dwelling unit or junior accessory dwelling unit shall still be line 5 considered ministerially without discretionary review or a hearing. line 6 If the applicant requests a delay , the 60-day time period shall be line 7 tolled for the period of the delay. If the local agency has not acted line 8 upon the completed application within 60 days, the application line 9 shall be deemed approved.
line 10 (c) (1) Subject to paragraph (2), a local agenc y may establish line 11 minimum and maximum unit size requirements for both attached line 12 and detached accessory dwelling units.
line 13 (2) Notwithstanding paragraph (1), a local agenc y shall not line 14 establish by ordinance any of the following:
line 15 (A) A minimum square footage requirement for either an line 16 attached or detached accessory dwelling unit that prohibits an line 17 efficiency unit.
line 18 (B) A maximum square footage requirement for either an line 19 attached or detached accessory dwelling unit that is less than either line 20 of the following:
line 21 (i) 850 square feet.
line 22 (ii) 1,000 square feet for an accessory dwelling unit that provides line 23 more than one bedroom.
line 24 (C) Any other minimum or maximum size for an accessory line 25 dwelling unit, size based upon a percentage of the proposed or line 26 existing primary dwelling, or limits on lot co verage, floor area line 27 ratio, open space, and minimum lot size, for either attached or line 28 detached dwellings that does not permit at least an 800 square foot line 29 accessory dwelling unit that is at least 16 25 feet in height with line 30 four-foot side and rear yard setbacks to be constructed in line 31 compliance with all other local development standards. line 32 (d) Notwithstanding any other law, a local agency, whether or line 33 not it has adopted an ordinance governing accessory dwelling units line 34 in accordance with subdi vision (a), shall not impose parking line 35 standards for an accessory dwelling unit in an y of the follo wing line 36 instances:
line 37 (1) The accessory dwelling unit is located within one-half mile line 38 walking distance of public transit.
line 39 (2) The accessory dwelling unit is located within an line 40 architecturally and historically significant historic district. 99 — 8 — SB 897
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Communication: Senate Bill 897 - Bill Text (ITEM 3 SENATE BILL 897: ACCESSORY DWELLING UNITS: JUNIOR ACCESSORY DWELLING line 1 (3) The accessory dwelling unit is part of the proposed or line 2 existing primary residence or an accessory structure. line 3 (4) When on-street parking permits are required but not offered line 4 to the occupant of the accessory dwelling unit.
line 5 (5) When there is a car share vehicle located within one block line 6 of the accessory dwelling unit.
line 7 (e) (1) Notwithstanding subdi visions (a) to (d), inclusi ve, a line 8 local agenc y shall ministerially appro ve an application for a line 9 building permit within a residential or mix ed-use zone to create line 10 any of the following:
line 11 (A) One accessory dwelling unit and one junior accessory line 12 dwelling unit per lot with a proposed or e xisting single-family line 13 dwelling if all of the following apply:
line 14 (i) The accessory dwelling unit or junior accessory dwelling line 15 unit is within the proposed space of a single-f amily dwelling or line 16 existing space of a single-f amily dwelling or accessory structure line 17 and may include an e xpansion of not more than 150 square feet line 18 beyond the same ph ysical dimensions as the e xisting accessory line 19 structure. An expansion beyond the ph ysical dimensions of the line 20 existing accessory structure shall be limited to accommodating line 21 ingress and egress.
line 22 (ii) The space has exterior access from the proposed or existing line 23 single-family dwelling.
line 24 (iii) The side and rear setbacks are sufficient for fire and safety. line 25 (iv) The junior accessory dwelling unit complies with the line 26 requirements of Section 65852.22.
line 27 (B) One detached, ne w construction, accessory dwelling unit line 28 that does not exceed four-foot side and rear yard setbacks for a lot line 29 with a proposed or existing single-family dwelling. The accessory line 30 dwelling unit may be combined with a junior accessory dwelling line 31 unit described in subparagraph (A). A local agency may impose line 32 the following conditions on the accessory dwelling unit:
line 33 (i) A total floor area limitation of not more than 800 square feet. line 34 (ii) A height limitation of 16 25 feet.
line 35 (C) (i) Multiple accessory dwelling units within the portions line 36 of existing multifamily dwelling structures that are not used as line 37 livable space, including, but not limited to, storage rooms, boiler line 38 rooms, passageways, attics, basements, or g arages, if each unit line 39 complies with state building standards for dwellings. 99 SB 897 — 9 —
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Communication: Senate Bill 897 - Bill Text (ITEM 3 SENATE BILL 897: ACCESSORY DWELLING UNITS: JUNIOR ACCESSORY DWELLING line 1 (ii) A local agency shall allow at least one accessory dwelling line 2 unit within an existing multifamily dwelling and shall allow up to line 3 25 percent of the existing multifamily dwelling units. line 4 (D) (i) Not more than tw o accessory dwelling units that are line 5 located on a lot that has an existing multifamily dwelling, but are line 6 detached from that multifamily dwelling and are subject to a height line 7 limit of 16 25 feet and four -foot rear yard and side setbacks. line 8 setbacks of no more than 4 feet.
line 9 (ii) If the existing multifamily dwelling exceeds a height of 25 line 10 feet or has a r ear or side setbac k of less than 4 feet, the local line 11 agency shall not r equire any modification of the e xisting line 12 multifamily dwelling to satisfy the r equirements of this line 13 subparagraph.
line 14 (iii) A local agency shall not reject an application to construct line 15 an accessory dwelling unit authorized under this subpar agraph line 16 on the basis that the existing multifamily dwelling exceeds a height line 17 of 25 feet or has a rear or side setback of less than 4 feet. line 18 (2) A local agency shall not require, as a condition for ministerial line 19 approval of a permit application for the creation of an accessory line 20 dwelling unit or a junior accessory dwelling unit, the correction line 21 of nonconforming zoning conditions.
line 22 (3) The installation of fire sprinklers shall not be required in an line 23 accessory dwelling unit if sprinklers are not required for the line 24 primary residence. The construction of an accessory dwelling unit line 25 shall not trigger a requirement for fire sprinklers to be installed line 26 in the proposed or existing multifamily dwelling. line 27 (4) A local agency shall require that a rental of the accessory line 28 dwelling unit created pursuant to this subdi vision be for a term line 29 longer than 30 days.
line 30 (5) A local agency may require, as part of the application for a line 31 permit to create an accessory dwelling unit connected to an onsite line 32 wastewater treatment system, a percolation test completed within line 33 the last five years, or, if the percolation test has been recertified, line 34 within the last 10 years.
line 35 (6) Notwithstanding subdivision (c) and paragraph (1) a local line 36 agency that has adopted an ordinance by July 1, 2018, pro viding line 37 for the appro val of accessory dwelling units in multif amily line 38 dwelling structures shall ministerially consider a permit application line 39 to construct an accessory dwelling unit that is described in line 40 paragraph (1), and may impose standards including, but not limited 99 — 10 — SB 897
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Communication: Senate Bill 897 - Bill Text (ITEM 3 SENATE BILL 897: ACCESSORY DWELLING UNITS: JUNIOR ACCESSORY DWELLING line 1 to, design, development, and historic standards on said accessory line 2 dwelling units. These standards shall not include requirements on line 3 minimum lot size.
line 4 (f) (1) Fees charged for the construction of accessory dwelling line 5 units shall be determined in accordance with Chapter 5 line 6 (commencing with Section 66000) and Chapter 7 (commencing line 7 with Section 66012).
line 8 (2) An accessory dwelling unit shall not be considered by a line 9 local agency, special district, or w ater corporation to be a ne w line 10 residential use for purposes of calculating connection fees or line 11 capacity charges for utilities, including w ater and sewer service, line 12 unless the accessory dwelling unit w as constructed with a ne w line 13 single-family dwelling.
line 14 (3) (A) A local agenc y, special district, or w ater corporation line 15 shall not impose an y impact fee upon the de velopment of an line 16 accessory dwelling unit less than 750 square feet. Any impact fees line 17 charged for an accessory dwelling unit of 750 square feet or more line 18 shall be charged proportionately in relation to the square footage line 19 of the primary dwelling unit.
line 20 (B) For purposes of this paragraph, “impact fee” has the same line 21 meaning as the term “fee” is defined in subdivision (b) of Section line 22 66000, except that it also includes fees specified in Section 66477. line 23 “Impact fee” does not include an y connection fee or capacity line 24 charge char ged by a local agenc y, special district, or w ater line 25 corporation.
line 26 (4) For an accessory dwelling unit described in subparagraph line 27 (A) of paragraph (1) of subdi vision (e), a local agenc y, special line 28 district, or w ater corporation shall not require the applicant to line 29 install a ne w or separate utility connection directly between the line 30 accessory dwelling unit and the utility or impose a related line 31 connection fee or capacity charge, unless the accessory dwelling line 32 unit was constructed with a new single-family home. dwelling. line 33 (5) For an accessory dwelling unit that is not described in line 34 subparagraph (A) of paragraph (1) of subdi vision (e), a local line 35 agency, special district, or w ater corporation may require a ne w line 36 or separate utility connection directly between the accessory line 37 dwelling unit and the utility . Consistent with Section 66013, the line 38 connection may be subject to a connection fee or capacity charge line 39 that shall be proportionate to the burden of the proposed accessory line 40 dwelling unit, based upon either its square feet or the number of 99 SB 897 — 11 —
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Communication: Senate Bill 897 - Bill Text (ITEM 3 SENATE BILL 897: ACCESSORY DWELLING UNITS: JUNIOR ACCESSORY DWELLING line 1 its drainage fixture unit (DFU) values, as defined in the Uniform line 2 Plumbing Code adopted and published by the International line 3 Association of Plumbing and Mechanical Officials, upon the water line 4 or sewer system. This fee or charge shall not exceed the reasonable line 5 cost of providing this service.
line 6 (g) This section does not limit the authority of local agencies line 7 to adopt less restricti ve requirements for the creation of an line 8 accessory dwelling unit.
line 9 (h) (1) A local agenc y shall submit a cop y of the ordinance line 10 adopted pursuant to subdivision (a) to the Department of Housing line 11 and Community Development within 60 days after adoption. After line 12 adoption of an ordinance, the department may submit written line 13 findings to the local agency as to whether the ordinance complies line 14 with this section.
line 15 (2) (A) If the department finds that the local agency’s ordinance line 16 does not comply with this section, the department shall notify the line 17 local agency and shall provide the local agency with a reasonable line 18 time, no longer than 30 days, to respond to the findings before line 19 taking any other action authorized by this section. line 20 (B) The local agency shall consider the findings made by the line 21 department pursuant to subparagraph (A) and shall do one of the line 22 following:
line 23 (i) Amend the ordinance to comply with this section. line 24 (ii) Adopt the ordinance without changes. The local agenc y line 25 shall include findings in its resolution adopting the ordinance that line 26 explain the reasons the local agenc y believes that the ordinance line 27 complies with this section despite the findings of the department. line 28 (3) (A) If the local agenc y does not amend its ordinance in line 29 response to the department’s findings or does not adopt a resolution line 30 with findings explaining the reason the ordinance complies with line 31 this section and addressing the department’ s findings, the line 32 department shall notify the local agenc y and may notify the line 33 Attorney General that the local agency is in violation of state law. line 34 (B) Before notifying the Attorney General that the local agency line 35 is in violation of state law, the department may consider whether line 36 a local agency adopted an ordinance in compliance with this section line 37 between January 1, 2017, and January 1, 2020.
line 38 (i) The department may re view, adopt, amend, or repeal line 39 guidelines to implement uniform standards or criteria that line 40 supplement or clarify the terms, references, and standards set forth 99 — 12 — SB 897
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Communication: Senate Bill 897 - Bill Text (ITEM 3 SENATE BILL 897: ACCESSORY DWELLING UNITS: JUNIOR ACCESSORY DWELLING line 1 in this section. The guidelines adopted pursuant to this subdivision line 2 are not subject to Chapter 3.5 (commencing with Section 11340) line 3 of Part 1 of Division 3 of Title 2.
line 4 (j) As used in this section, the following terms mean:
line 5 (1) “Accessory dwelling unit” means an attached or a detached line 6 residential dwelling unit that provides complete independent living line 7 facilities for one or more persons and is located on a lot with a line 8 proposed or existing primary residence. It shall include permanent line 9 provisions for living, sleeping, eating, cooking, and sanitation on line 10 the same parcel as the single-family or multifamily dwelling is or line 11 will be situated. An accessory dwelling unit also includes the line 12 following:
line 13 (A) An efficiency unit.
line 14 (B) A manufactured home, as defined in Section 18007 of the line 15 Health and Safety Code.
line 16 (2) “Accessory structure” means a structure that is accessory line 17 and incidental to a dwelling located on the same lot. line 18 (3) “Efficiency unit” has the same meaning as defined in Section line 19 17958.1 of the Health and Safety Code.
line 20 (4) “Living area” means the interior habitable area of a dwelling line 21 unit, including basements and attics, but does not include a garage line 22 or any accessory structure.
line 23 (5) “Local agency” means a city , county, or city and county , line 24 whether general law or chartered.
line 25 (6) “Nonconforming zoning condition” means a ph ysical line 26 improvement on a property that does not conform with current line 27 zoning standards.
line 28 (7) “Passageway” means a pathw ay that is unobstructed clear line 29 to the sky and extends from a street to one entrance of the accessory line 30 dwelling unit.
line 31 (8) “Proposed dwelling” means a dwelling that is the subject of line 32 a permit application and that meets the requirements for permitting. line 33 (9) “Public transit” means a location, including, but not limited line 34 to, a bus stop or train station, where the public may access buses, line 35 trains, subways, and other forms of transportation that charge set line 36 fares, run on fixed routes, and are available to the public. line 37 (10) “Tandem parking” means that tw o or more automobiles line 38 are parked on a dri veway or in an y other location on a lot, lined line 39 up behind one another.
99 SB 897 — 13 —
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Communication: Senate Bill 897 - Bill Text (ITEM 3 SENATE BILL 897: ACCESSORY DWELLING UNITS: JUNIOR ACCESSORY DWELLING line 1 (k) A local agency shall not issue a certificate of occupancy for line 2 an accessory dwelling unit before the local agenc y issues a line 3 certificate of occupancy for the primary dwelling. line 4 (l) Nothing in this section shall be construed to supersede or in line 5 any way alter or lessen the effect or application of the California line 6 Coastal Act of 1976 (Di vision 20 (commencing with Section line 7 30000) of the Public Resources Code), e xcept that the local line 8 government shall not be required to hold public hearings for coastal line 9 development permit applications for accessory dwelling units. line 10 (m) A local agency may count an accessory dwelling unit for line 11 purposes of identifying adequate sites for housing, as specified in line 12 subdivision (a) of Section 65583.1, subject to authorization by the line 13 department and compliance with this division.
line 14 (n) In enforcing b uilding standards pursuant to Article 1 line 15 (commencing with Section 17960) of Chapter 5 of P art 1.5 of line 16 Division 13 of the Health and Safety Code for an accessory line 17 dwelling unit described in paragraph (1) or (2) belo w, a local line 18 agency, upon request of an o wner of an accessory dwelling unit line 19 for a delay in enforcement, shall delay enforcement of a building line 20 standard, subject to compliance with Section 17980.12 of the line 21 Health and Safety Code:
line 22 (1) The accessory dwelling unit w as b uilt before January 1, line 23 2020.
line 24 (2) The accessory dwelling unit w as built on or after January line 25 1, 2020, in a local jurisdiction that, at the time the accessory line 26 dwelling unit w as built, had a noncompliant accessory dwelling line 27 unit ordinance, b ut the ordinance is compliant at the time the line 28 request is made.
line 29 (o) This section shall remain in effect only until January 1, 2025, line 30 and as of that date is repealed.
line 31 SEC. 2. Section 65852.2 of the Government Code, as amended line 32 by Section 2 of Chapter 343 of the Statutes of 2021, is repealed. line 33 65852.2. (a) (1) A local agency may, by ordinance, pro vide line 34 for the creation of accessory dwelling units in areas zoned to allow line 35 single-family or multif amily dwelling residential use. The line 36 ordinance shall do all of the following:
line 37 (A) Designate areas within the jurisdiction of the local agency line 38 where accessory dwelling units may be permitted. The designation line 39 of areas may be based on the adequacy of water and sewer services line 40 and the impact of accessory dwelling units on traffic flo w and 99 — 14 — SB 897
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Communication: Senate Bill 897 - Bill Text (ITEM 3 SENATE BILL 897: ACCESSORY DWELLING UNITS: JUNIOR ACCESSORY DWELLING line 1 public safety. A local agency that does not provide water or sewer line 2 services shall consult with the local water or sewer service provider line 3 regarding the adequac y of w ater and se wer services before line 4 designating an area where accessory dwelling units may be line 5 permitted.
line 6 (B) (i) Impose standards on accessory dwelling units that line 7 include, but are not limited to, parking, height, setback, landscape, line 8 architectural review, maximum size of a unit, and standards that line 9 prevent adverse impacts on any real property that is listed in the line 10 California Register of Historical Resources. These standards shall line 11 not include requirements on minimum lot size.
line 12 (ii) Notwithstanding clause (i), a local agenc y may reduce or line 13 eliminate parking requirements for an y accessory dwelling unit line 14 located within its jurisdiction.
line 15 (C) Provide that accessory dwelling units do not e xceed the line 16 allowable density for the lot upon which the accessory dwelling line 17 unit is located, and that accessory dwelling units are a residential line 18 use that is consistent with the e xisting general plan and zoning line 19 designation for the lot.
line 20 (D) Require the accessory dwelling units to comply with all of line 21 the following:
line 22 (i) Except as pro vided in Section 65852.26, the accessory line 23 dwelling unit may be rented separate from the primary residence, line 24 but may not be sold or otherwise con veyed separate from the line 25 primary residence.
line 26 (ii) The lot is zoned to allo w single-f amily or multif amily line 27 dwelling residential use and includes a proposed or e xisting line 28 dwelling.
line 29 (iii) The accessory dwelling unit is either attached to, or located line 30 within, the proposed or e xisting primary dwelling, including line 31 attached garages, storage areas or similar uses, or an accessory line 32 structure or detached from the proposed or e xisting primary line 33 dwelling and located on the same lot as the proposed or e xisting line 34 primary dwelling.
line 35 (iv) If there is an existing primary dwelling, the total floor area line 36 of an attached accessory dwelling unit shall not exceed 50 percent line 37 of the existing primary dwelling.
line 38 (v) The total floor area for a detached accessory dwelling unit line 39 shall not exceed 1,200 square feet.
99 SB 897 — 15 —
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Communication: Senate Bill 897 - Bill Text (ITEM 3 SENATE BILL 897: ACCESSORY DWELLING UNITS: JUNIOR ACCESSORY DWELLING line 1 (vi) No passageway shall be required in conjunction with the line 2 construction of an accessory dwelling unit.
line 3 (vii) No setback shall be required for an existing living area or line 4 accessory structure or a structure constructed in the same location line 5 and to the same dimensions as an e xisting structure that is line 6 converted to an accessory dwelling unit or to a portion of an line 7 accessory dwelling unit, and a setback of no more than four feet line 8 from the side and rear lot lines shall be required for an accessory line 9 dwelling unit that is not converted from an existing structure or a line 10 new structure constructed in the same location and to the same line 11 dimensions as an existing structure.
line 12 (viii) Local building code requirements that apply to detached line 13 dwellings, as appropriate.
line 14 (ix) Approval by the local health officer where a private sewage line 15 disposal system is being used, if required.
line 16 (x) (I) Parking requirements for accessory dwelling units shall line 17 not exceed one parking space per accessory dwelling unit or per line 18 bedroom, whiche ver is less. These spaces may be pro vided as line 19 tandem parking on a driveway.
line 20 (II) Offstreet parking shall be permitted in setback areas in line 21 locations determined by the local agenc y or through tandem line 22 parking, unless specific findings are made that parking in setback line 23 areas or tandem parking is not feasible based upon specific site or line 24 regional topographical or fire and life safety conditions. line 25 (III) This clause shall not apply to an accessory dwelling unit line 26 that is described in subdivision (d).
line 27 (xi) When a g arage, carport, or co vered parking structure is line 28 demolished in conjunction with the construction of an accessory line 29 dwelling unit or converted to an accessory dwelling unit, the local line 30 agency shall not require that those of fstreet parking spaces be line 31 replaced.
line 32 (xii) Accessory dwelling units shall not be required to provide line 33 fire sprinklers if they are not required for the primary residence. line 34 (2) The ordinance shall not be considered in the application of line 35 any local ordinance, policy, or program to limit residential growth. line 36 (3) A permit application for an accessory dwelling unit or a line 37 junior accessory dwelling unit shall be considered and appro ved line 38 ministerially without discretionary re view or a hearing, line 39 notwithstanding Section 65901 or 65906 or an y local ordinance line 40 regulating the issuance of v ariances or special use permits. The 99 — 16 — SB 897
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Communication: Senate Bill 897 - Bill Text (ITEM 3 SENATE BILL 897: ACCESSORY DWELLING UNITS: JUNIOR ACCESSORY DWELLING line 1 permitting agency shall act on the application to create an accessory line 2 dwelling unit or a junior accessory dwelling unit within 60 days line 3 from the date the local agency receives a completed application if line 4 there is an existing single-family or multifamily dwelling on the line 5 lot. If the permit application to create an accessory dwelling unit line 6 or a junior accessory dwelling unit is submitted with a permit line 7 application to create a new single-family dwelling on the lot, the line 8 permitting agency may delay acting on the permit application for line 9 the accessory dwelling unit or the junior accessory dwelling unit line 10 until the permitting agency acts on the permit application to create line 11 the new single-family dwelling, but the application to create the line 12 accessory dwelling unit or junior accessory dwelling unit shall be line 13 considered without discretionary review or hearing. If the applicant line 14 requests a delay , the 60-day time period shall be tolled for the line 15 period of the delay . If the local agenc y has not acted upon the line 16 completed application within 60 days, the application shall be line 17 deemed approved. A local agency may charge a fee to reimburse line 18 it for costs incurred to implement this paragraph, including the line 19 costs of adopting or amending any ordinance that provides for the line 20 creation of an accessory dwelling unit.
line 21 (4) An existing ordinance governing the creation of an accessory line 22 dwelling unit by a local agency or an accessory dwelling ordinance line 23 adopted by a local agency shall provide an approval process that line 24 includes only ministerial provisions for the approval of accessory line 25 dwelling units and shall not include an y discretionary processes, line 26 provisions, or requirements for those units, e xcept as otherwise line 27 provided in this subdi vision. If a local agenc y has an e xisting line 28 accessory dwelling unit ordinance that f ails to meet the line 29 requirements of this subdivision, that ordinance shall be null and line 30 void and that agency shall thereafter apply the standards established line 31 in this subdi vision for the appro val of accessory dwelling units, line 32 unless and until the agency adopts an ordinance that complies with line 33 this section.
line 34 (5) No other local ordinance, policy, or regulation shall be the line 35 basis for the delay or denial of a b uilding permit or a use permit line 36 under this subdivision.
line 37 (6) (A) This subdivision establishes the maximum standards line 38 that local agencies shall use to e valuate a proposed accessory line 39 dwelling unit on a lot that includes a proposed or e xisting line 40 single-family dwelling. No additional standards, other than those 99 SB 897 — 17 —
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Communication: Senate Bill 897 - Bill Text (ITEM 3 SENATE BILL 897: ACCESSORY DWELLING UNITS: JUNIOR ACCESSORY DWELLING line 1 provided in this subdivision, shall be used or imposed except that, line 2 subject to subparagraph (B), a local agenc y may require an line 3 applicant for a permit issued pursuant to this subdivision to be an line 4 owner-occupant or that the property be used for rentals of terms line 5 longer than 30 days.
line 6 (B) Notwithstanding subparagraph (A), a local agency shall not line 7 impose an owner-occupant requirement on an accessory dwelling line 8 unit permitted between January 1, 2020, to January 1, 2025, during line 9 which time the local agenc y w as prohibited from imposing an line 10 owner-occupant requirement.
line 11 (7) A local agency may amend its zoning ordinance or general line 12 plan to incorporate the policies, procedures, or other pro visions line 13 applicable to the creation of an accessory dwelling unit if these line 14 provisions are consistent with the limitations of this subdivision. line 15 (8) An accessory dwelling unit that conforms to this subdivision line 16 shall be deemed to be an accessory use or an accessory b uilding line 17 and shall not be considered to exceed the allowable density for the line 18 lot upon which it is located, and shall be deemed to be a residential line 19 use that is consistent with the e xisting general plan and zoning line 20 designations for the lot. The accessory dwelling unit shall not be line 21 considered in the application of an y local ordinance, polic y, or line 22 program to limit residential growth.
line 23 (b) When a local agenc y that has not adopted an ordinance line 24 governing accessory dwelling units in accordance with subdivision line 25 (a) recei ves an application for a permit to create an accessory line 26 dwelling unit pursuant to this subdi vision, the local agency shall line 27 approve or disappro ve the application ministerially without line 28 discretionary review pursuant to subdi vision (a). The permitting line 29 agency shall act on the application to create an accessory dwelling line 30 unit or a junior accessory dwelling unit within 60 days from the line 31 date the local agency receives a completed application if there is line 32 an existing single-family or multifamily dwelling on the lot. If the line 33 permit application to create an accessory dwelling unit or a junior line 34 accessory dwelling unit is submitted with a permit application to line 35 create a ne w single-f amily dwelling on the lot, the permitting line 36 agency may delay acting on the permit application for the accessory line 37 dwelling unit or the junior accessory dwelling unit until the line 38 permitting agency acts on the permit application to create the new line 39 single-family dwelling, but the application to create the accessory line 40 dwelling unit or junior accessory dwelling unit shall still be 99 — 18 — SB 897
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Communication: Senate Bill 897 - Bill Text (ITEM 3 SENATE BILL 897: ACCESSORY DWELLING UNITS: JUNIOR ACCESSORY DWELLING line 1 considered ministerially without discretionary review or a hearing. line 2 If the applicant requests a delay , the 60-day time period shall be line 3 tolled for the period of the delay. If the local agency has not acted line 4 upon the completed application within 60 days, the application line 5 shall be deemed approved.
line 6 (c) (1) Subject to paragraph (2), a local agenc y may establish line 7 minimum and maximum unit size requirements for both attached line 8 and detached accessory dwelling units.
line 9 (2) Notwithstanding paragraph (1), a local agenc y shall not line 10 establish by ordinance any of the following:
line 11 (A) A minimum square footage requirement for either an line 12 attached or detached accessory dwelling unit that prohibits an line 13 efficiency unit.
line 14 (B) A maximum square footage requirement for either an line 15 attached or detached accessory dwelling unit that is less than either line 16 of the following:
line 17 (i) 850 square feet.
line 18 (ii) 1,000 square feet for an accessory dwelling unit that provides line 19 more than one bedroom.
line 20 (C) Any other minimum or maximum size for an accessory line 21 dwelling unit, size based upon a percentage of the proposed or line 22 existing primary dwelling, or limits on lot co verage, floor area line 23 ratio, open space, and minimum lot size, for either attached or line 24 detached dwellings that does not permit at least an 800 square foot line 25 accessory dwelling unit that is at least 16 feet in height with line 26 four-foot side and rear yard setbacks to be constructed in line 27 compliance with all other local development standards. line 28 (d) Notwithstanding any other law, a local agency, whether or line 29 not it has adopted an ordinance governing accessory dwelling units line 30 in accordance with subdi vision (a), shall not impose parking line 31 standards for an accessory dwelling unit in an y of the follo wing line 32 instances:
line 33 (1) The accessory dwelling unit is located within one-half mile line 34 walking distance of public transit.
line 35 (2) The accessory dwelling unit is located within an line 36 architecturally and historically significant historic district. line 37 (3) The accessory dwelling unit is part of the proposed or line 38 existing primary residence or an accessory structure. line 39 (4) When on-street parking permits are required but not offered line 40 to the occupant of the accessory dwelling unit. 99 SB 897 — 19 —
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Communication: Senate Bill 897 - Bill Text (ITEM 3 SENATE BILL 897: ACCESSORY DWELLING UNITS: JUNIOR ACCESSORY DWELLING line 1 (5) When there is a car share vehicle located within one block line 2 of the accessory dwelling unit.
line 3 (e) (1) Notwithstanding subdi visions (a) to (d), inclusi ve, a line 4 local agenc y shall ministerially appro ve an application for a line 5 building permit within a residential or mix ed-use zone to create line 6 any of the following:
line 7 (A) One accessory dwelling unit and one junior accessory line 8 dwelling unit per lot with a proposed or e xisting single-family line 9 dwelling if all of the following apply:
line 10 (i) The accessory dwelling unit or junior accessory dwelling line 11 unit is within the proposed space of a single-f amily dwelling or line 12 existing space of a single-f amily dwelling or accessory structure line 13 and may include an e xpansion of not more than 150 square feet line 14 beyond the same ph ysical dimensions as the e xisting accessory line 15 structure. An expansion beyond the ph ysical dimensions of the line 16 existing accessory structure shall be limited to accommodating line 17 ingress and egress.
line 18 (ii) The space has exterior access from the proposed or existing line 19 single-family dwelling.
line 20 (iii) The side and rear setbacks are sufficient for fire and safety. line 21 (iv) The junior accessory dwelling unit complies with the line 22 requirements of Section 65852.22.
line 23 (B) One detached, ne w construction, accessory dwelling unit line 24 that does not exceed four-foot side and rear yard setbacks for a lot line 25 with a proposed or existing single-family dwelling. The accessory line 26 dwelling unit may be combined with a junior accessory dwelling line 27 unit described in subparagraph (A). A local agency may impose line 28 the following conditions on the accessory dwelling unit:
line 29 (i) A total floor area limitation of not more than 800 square feet. line 30 (ii) A height limitation of 16 feet.
line 31 (C) (i) Multiple accessory dwelling units within the portions line 32 of existing multifamily dwelling structures that are not used as line 33 livable space, including, but not limited to, storage rooms, boiler line 34 rooms, passageways, attics, basements, or g arages, if each unit line 35 complies with state building standards for dwellings. line 36 (ii) A local agency shall allow at least one accessory dwelling line 37 unit within an existing multifamily dwelling and shall allow up to line 38 25 percent of the existing multifamily dwelling units. line 39 (D) Not more than two accessory dwelling units that are located line 40 on a lot that has an existing multifamily dwelling, but are detached 99 — 20 — SB 897
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Communication: Senate Bill 897 - Bill Text (ITEM 3 SENATE BILL 897: ACCESSORY DWELLING UNITS: JUNIOR ACCESSORY DWELLING line 1 from that multifamily dwelling and are subject to a height limit of line 2 16 feet and four-foot rear yard and side setbacks. line 3 (2) A local agency shall not require, as a condition for ministerial line 4 approval of a permit application for the creation of an accessory line 5 dwelling unit or a junior accessory dwelling unit, the correction line 6 of nonconforming zoning conditions.
line 7 (3) The installation of fire sprinklers shall not be required in an line 8 accessory dwelling unit if sprinklers are not required for the line 9 primary residence.
line 10 (4) A local agency may require owner occupancy for either the line 11 primary dwelling or the accessory dwelling unit on a single-family line 12 lot, subject to the requirements of paragraph (6) of subdivision (a). line 13 (5) A local agency shall require that a rental of the accessory line 14 dwelling unit created pursuant to this subdi vision be for a term line 15 longer than 30 days.
line 16 (6) A local agency may require, as part of the application for a line 17 permit to create an accessory dwelling unit connected to an onsite line 18 wastewater treatment system, a percolation test completed within line 19 the last five years, or, if the percolation test has been recertified, line 20 within the last 10 years.
line 21 (7) Notwithstanding subdivision (c) and paragraph (1) a local line 22 agency that has adopted an ordinance by July 1, 2018, pro viding line 23 for the appro val of accessory dwelling units in multif amily line 24 dwelling structures shall ministerially consider a permit application line 25 to construct an accessory dwelling unit that is described in line 26 paragraph (1), and may impose standards including, but not limited line 27 to, design, development, and historic standards on said accessory line 28 dwelling units. These standards shall not include requirements on line 29 minimum lot size.
line 30 (f) (1) Fees charged for the construction of accessory dwelling line 31 units shall be determined in accordance with Chapter 5 line 32 (commencing with Section 66000) and Chapter 7 (commencing line 33 with Section 66012).
line 34 (2) An accessory dwelling unit shall not be considered by a line 35 local agency, special district, or w ater corporation to be a ne w line 36 residential use for purposes of calculating connection fees or line 37 capacity charges for utilities, including w ater and sewer service, line 38 unless the accessory dwelling unit w as constructed with a ne w line 39 single-family dwelling.
99 SB 897 — 21 —
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Communication: Senate Bill 897 - Bill Text (ITEM 3 SENATE BILL 897: ACCESSORY DWELLING UNITS: JUNIOR ACCESSORY DWELLING line 1 (3) (A) A local agenc y, special district, or w ater corporation line 2 shall not impose an y impact fee upon the de velopment of an line 3 accessory dwelling unit less than 750 square feet. Any impact fees line 4 charged for an accessory dwelling unit of 750 square feet or more line 5 shall be charged proportionately in relation to the square footage line 6 of the primary dwelling unit.
line 7 (B) For purposes of this paragraph, “impact fee” has the same line 8 meaning as the term “fee” is defined in subdivision (b) of Section line 9 66000, except that it also includes fees specified in Section 66477. line 10 “Impact fee” does not include an y connection fee or capacity line 11 charge char ged by a local agenc y, special district, or w ater line 12 corporation.
line 13 (4) For an accessory dwelling unit described in subparagraph line 14 (A) of paragraph (1) of subdi vision (e), a local agenc y, special line 15 district, or w ater corporation shall not require the applicant to line 16 install a ne w or separate utility connection directly between the line 17 accessory dwelling unit and the utility or impose a related line 18 connection fee or capacity charge, unless the accessory dwelling line 19 unit was constructed with a new single-family dwelling. line 20 (5) For an accessory dwelling unit that is not described in line 21 subparagraph (A) of paragraph (1) of subdi vision (e), a local line 22 agency, special district, or w ater corporation may require a ne w line 23 or separate utility connection directly between the accessory line 24 dwelling unit and the utility . Consistent with Section 66013, the line 25 connection may be subject to a connection fee or capacity charge line 26 that shall be proportionate to the burden of the proposed accessory line 27 dwelling unit, based upon either its square feet or the number of line 28 its drainage fixture unit (DFU) values, as defined in the Uniform line 29 Plumbing Code adopted and published by the International line 30 Association of Plumbing and Mechanical Officials, upon the water line 31 or sewer system. This fee or charge shall not exceed the reasonable line 32 cost of providing this service.
line 33 (g) This section does not limit the authority of local agencies line 34 to adopt less restricti ve requirements for the creation of an line 35 accessory dwelling unit.
line 36 (h) (1) A local agenc y shall submit a cop y of the ordinance line 37 adopted pursuant to subdivision (a) to the Department of Housing line 38 and Community Development within 60 days after adoption. After line 39 adoption of an ordinance, the department may submit written 99 — 22 — SB 897
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Communication: Senate Bill 897 - Bill Text (ITEM 3 SENATE BILL 897: ACCESSORY DWELLING UNITS: JUNIOR ACCESSORY DWELLING line 1 findings to the local agency as to whether the ordinance complies line 2 with this section.
line 3 (2) (A) If the department finds that the local agency’s ordinance line 4 does not comply with this section, the department shall notify the line 5 local agency and shall provide the local agency with a reasonable line 6 time, no longer than 30 days, to respond to the findings before line 7 taking any other action authorized by this section. line 8 (B) The local agency shall consider the findings made by the line 9 department pursuant to subparagraph (A) and shall do one of the line 10 following:
line 11 (i) Amend the ordinance to comply with this section. line 12 (ii) Adopt the ordinance without changes. The local agenc y line 13 shall include findings in its resolution adopting the ordinance that line 14 explain the reasons the local agenc y believes that the ordinance line 15 complies with this section despite the findings of the department. line 16 (3) (A) If the local agenc y does not amend its ordinance in line 17 response to the department’s findings or does not adopt a resolution line 18 with findings explaining the reason the ordinance complies with line 19 this section and addressing the department’ s findings, the line 20 department shall notify the local agenc y and may notify the line 21 Attorney General that the local agency is in violation of state law. line 22 (B) Before notifying the Attorney General that the local agency line 23 is in violation of state law, the department may consider whether line 24 a local agency adopted an ordinance in compliance with this section line 25 between January 1, 2017, and January 1, 2020.
line 26 (i) The department may re view, adopt, amend, or repeal line 27 guidelines to implement uniform standards or criteria that line 28 supplement or clarify the terms, references, and standards set forth line 29 in this section. The guidelines adopted pursuant to this subdivision line 30 are not subject to Chapter 3.5 (commencing with Section 11340) line 31 of Part 1 of Division 3 of Title 2.
line 32 (j) As used in this section, the following terms mean:
line 33 (1) “Accessory dwelling unit” means an attached or a detached line 34 residential dwelling unit that provides complete independent living line 35 facilities for one or more persons and is located on a lot with a line 36 proposed or existing primary residence. It shall include permanent line 37 provisions for living, sleeping, eating, cooking, and sanitation on line 38 the same parcel as the single-family or multifamily dwelling is or line 39 will be situated. An accessory dwelling unit also includes the line 40 following:
99 SB 897 — 23 —
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Communication: Senate Bill 897 - Bill Text (ITEM 3 SENATE BILL 897: ACCESSORY DWELLING UNITS: JUNIOR ACCESSORY DWELLING line 1 (A) An efficiency unit.
line 2 (B) A manufactured home, as defined in Section 18007 of the line 3 Health and Safety Code.
line 4 (2) “Accessory structure” means a structure that is accessory line 5 and incidental to a dwelling located on the same lot. line 6 (3) “Efficiency unit” has the same meaning as defined in Section line 7 17958.1 of the Health and Safety Code.
line 8 (4) “Living area” means the interior habitable area of a dwelling line 9 unit, including basements and attics, but does not include a garage line 10 or any accessory structure.
line 11 (5) “Local agency” means a city , county, or city and county , line 12 whether general law or chartered.
line 13 (6) “Nonconforming zoning condition” means a ph ysical line 14 improvement on a property that does not conform with current line 15 zoning standards.
line 16 (7) “Passageway” means a pathw ay that is unobstructed clear line 17 to the sky and extends from a street to one entrance of the accessory line 18 dwelling unit.
line 19 (8) “Proposed dwelling” means a dwelling that is the subject of line 20 a permit application and that meets the requirements for permitting. line 21 (9) “Public transit” means a location, including, but not limited line 22 to, a bus stop or train station, where the public may access buses, line 23 trains, subways, and other forms of transportation that charge set line 24 fares, run on fixed routes, and are available to the public. line 25 (10) “Tandem parking” means that tw o or more automobiles line 26 are parked on a dri veway or in an y other location on a lot, lined line 27 up behind one another.
line 28 (k) A local agency shall not issue a certificate of occupancy for line 29 an accessory dwelling unit before the local agenc y issues a line 30 certificate of occupancy for the primary dwelling. line 31 (l) Nothing in this section shall be construed to supersede or in line 32 any way alter or lessen the effect or application of the California line 33 Coastal Act of 1976 (Di vision 20 (commencing with Section line 34 30000) of the Public Resources Code), e xcept that the local line 35 government shall not be required to hold public hearings for coastal line 36 development permit applications for accessory dwelling units. line 37 (m) A local agency may count an accessory dwelling unit for line 38 purposes of identifying adequate sites for housing, as specified in line 39 subdivision (a) of Section 65583.1, subject to authorization by the line 40 department and compliance with this division.
99 — 24 — SB 897
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Communication: Senate Bill 897 - Bill Text (ITEM 3 SENATE BILL 897: ACCESSORY DWELLING UNITS: JUNIOR ACCESSORY DWELLING line 1 (n) In enforcing b uilding standards pursuant to Article 1 line 2 (commencing with Section 17960) of Chapter 5 of P art 1.5 of line 3 Division 13 of the Health and Safety Code for an accessory line 4 dwelling unit described in paragraph (1) or (2) belo w, a local line 5 agency, upon request of an o wner of an accessory dwelling unit line 6 for a delay in enforcement, shall delay enforcement of a building line 7 standard, subject to compliance with Section 17980.12 of the line 8 Health and Safety Code:
line 9 (1) The accessory dwelling unit w as b uilt before January 1, line 10 2020.
line 11 (2) The accessory dwelling unit w as built on or after January line 12 1, 2020, in a local jurisdiction that, at the time the accessory line 13 dwelling unit w as built, had a noncompliant accessory dwelling line 14 unit ordinance, b ut the ordinance is compliant at the time the line 15 request is made.
line 16 (o) This section shall become operative on January 1, 2025. line 17 SEC. 3. Section 65852.22 of the Government Code is amended line 18 to read:
line 19 65852.22. (a) Notwithstanding Section 65852.2, a local agency line 20 may, by ordinance, pro vide for the creation of junior accessory line 21 dwelling units in single-f amily residential zones. The ordinance line 22 may require a permit to be obtained for the creation of a junior line 23 accessory dwelling unit, and shall do all of the following:
line 24 (1) Limit the number of junior accessory dwelling units to one line 25 per residential lot zoned for single-f amily residences with a line 26 single-family residence built, or proposed to be built, on the lot. line 27 (2) Require owner-occupancy in the single-family residence in line 28 which the junior accessory dwelling unit will be permitted. The line 29 owner may reside in either the remaining portion of the structure line 30 or the ne wly created junior accessory dwelling unit. line 31 Owner-occupancy shall not be required if the o wner is another line 32 governmental agency, land trust, or housing organization. line 33 (3) Require the recordation of a deed restriction, which shall line 34 run with the land, shall be filed with the permitting agenc y, and line 35 shall include both of the following:
line 36 (A) A prohibition on the sale of the junior accessory dwelling line 37 unit separate from the sale of the single-family residence, including line 38 a statement that the deed restriction may be enforced against future line 39 purchasers.
99 SB 897 — 25 —
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Communication: Senate Bill 897 - Bill Text (ITEM 3 SENATE BILL 897: ACCESSORY DWELLING UNITS: JUNIOR ACCESSORY DWELLING line 1 (B) A restriction on the size and attributes of the junior accessory line 2 dwelling unit that conforms with this section.
line 3 (4) Require a permitted junior accessory dwelling unit to be line 4 constructed within the w alls of the proposed or e xisting line 5 single-family residence. For purposes of this paragraph, enclosed line 6 uses within the residence, such as attached garages, are considered line 7 a part of the proposed or existing single-family residence. line 8 (5) (A) Require a permitted junior accessory dwelling unit to line 9 include a separate entrance from the main entrance to the proposed line 10 or existing single-family residence.
line 11 (B) If a permitted junior accessory dwelling unit does not include line 12 separate sanitation facilities, the permitted junior accessory line 13 dwelling unit shall include a separ ate entr ance from the main line 14 entrance to the structure, with an interior entry to the main living line 15 area.
line 16 (6) Require the permitted junior accessory dwelling unit to line 17 include an efficienc y kitchen, which shall include all of the line 18 following:
line 19 (A) A cooking facility with appliances.
line 20 (B) A food preparation counter and storage cabinets that are of line 21 reasonable size in relation to the size of the junior accessory line 22 dwelling unit.
line 23 (b) (1) An ordinance shall not require additional parking as a line 24 condition to grant a permit.
line 25 (2) This subdi vision shall not be interpreted to prohibit the line 26 requirement of an inspection, including the imposition of a fee for line 27 that inspection, to determine if the junior accessory dwelling unit line 28 complies with applicable building standards.
line 29 (c) An application for a permit pursuant to this section shall, line 30 notwithstanding Section 65901 or 65906 or an y local ordinance line 31 regulating the issuance of v ariances or special use permits, be line 32 considered ministerially, without discretionary review or a hearing. line 33 The permitting agency shall act on the application to create a junior line 34 accessory dwelling unit within 60 days from the date the local line 35 agency receives a completed application if there is an e xisting line 36 single-family dwelling on the lot. If the permit application to create line 37 a junior accessory dwelling unit is submitted with a permit line 38 application to create a new single-family dwelling on the lot, the line 39 permitting agency may delay acting on the permit application for line 40 the junior accessory dwelling unit until the permitting agency acts 99 — 26 — SB 897
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Communication: Senate Bill 897 - Bill Text (ITEM 3 SENATE BILL 897: ACCESSORY DWELLING UNITS: JUNIOR ACCESSORY DWELLING line 1 on the permit application to create the new single-family dwelling, line 2 but the application to create the junior accessory dwelling unit line 3 shall still be considered ministerially without discretionary review line 4 or a hearing. If the applicant requests a delay , the 60-day time line 5 period shall be tolled for the period of the delay . A local agency line 6 may charge a fee to reimburse the local agency for costs incurred line 7 in connection with the issuance of a permit pursuant to this section. line 8 (d) For purposes of an y fire or life protection ordinance or line 9 regulation, a junior accessory dwelling unit shall not be considered line 10 a separate or new dwelling unit. This section shall not be construed line 11 to prohibit a city , county, city and county , or other local public line 12 entity from adopting an ordinance or regulation relating to fire and line 13 life protection requirements within a single-family residence that line 14 contains a junior accessory dwelling unit so long as the ordinance line 15 or re gulation applies uniformly to all single-f amily residences line 16 within the zone regardless of whether the single-family residence line 17 includes a junior accessory dwelling unit or not. line 18 (e) For purposes of providing service for water, sewer, or power, line 19 including a connection fee, a junior accessory dwelling unit shall line 20 not be considered a separate or new dwelling unit. line 21 (f) This section shall not be construed to prohibit a local agency line 22 from adopting an ordinance or regulation, related to parking or a line 23 service or a connection fee for water, sewer, or power, that applies line 24 to a single-f amily residence that contains a junior accessory line 25 dwelling unit, so long as that ordinance or re gulation applies line 26 uniformly to all single-family residences regardless of whether the line 27 single-family residence includes a junior accessory dwelling unit. line 28 (g) If a local agency has not adopted a local ordinance pursuant line 29 to this section, the local agency shall ministerially approve a permit line 30 to construct a junior accessory dwelling unit that satisfies the line 31 requirements set forth in subparagraph (A) of paragraph (1) of line 32 subdivision (e) of Section 65852.2 and the requirements of this line 33 section.
line 34 (h) For purposes of this section, the follo wing terms have the line 35 following meanings:
line 36 (1) “Junior accessory dwelling unit” means a unit that is no line 37 more than 500 square feet in size and contained entirely within a line 38 single-family residence. A junior accessory dwelling unit may line 39 include separate sanitation f acilities, or may share sanitation line 40 facilities with the existing structure.
99 SB 897 — 27 —
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Communication: Senate Bill 897 - Bill Text (ITEM 3 SENATE BILL 897: ACCESSORY DWELLING UNITS: JUNIOR ACCESSORY DWELLING line 1 (2) “Local agency” means a city , county, or city and county , line 2 whether general law or chartered.
line 3 SEC. 4. Section 65852.23 is added to the Government Code, line 4 to read:
line 5 65852.23. (a) Notwithstanding any other la w, and e xcept as line 6 otherwise provided in subdi vision (b), a local agenc y shall not line 7 deny a permit for a constructed, b ut unpermitted, accessory line 8 dwelling unit due to either of the following:
line 9 (1) The accessory dwelling unit is in violation of b uilding line 10 standards pursuant to Article 1 (commencing with Section 17960) line 11 of Chapter 5 of P art 1.5 of Division 13 of the Health and Safety line 12 Code.
line 13 (2) The accessory dwelling unit does not comply with Section line 14 65852.2 or any local ordinance regulating accessory dwelling units. line 15 (b) Notwithstanding subdivision (a), a local agenc y may deny line 16 a permit for an accessory dwelling unit subject to subdivision (a) line 17 if the local agency makes a finding that correcting the violation is line 18 necessary to protect the health and safety of the public or occupants line 19 of the structure.
line 20 SEC. 5. Chapter 6.9 (commencing with Section 50678) is added line 21 to Part 2 of Division 31 of the Health and Safety Code, to read:
line 22
line 23 Chapter 6.9. Accessory Dwelling Unit Funding
line 24
line 25 50678. (a) Upon appropriation of the Le gislature, the line 26 department shall establish and administer a grant program for the line 27 purpose of funding the construction and maintenance of accessory line 28 dwelling units and junior accessory dwelling units, as defined in line 29 Section 65852.2 and 65852.22 of the Government Code. line 30 (b) The California Accessory Dwelling Unit Fund is hereby line 31 established in the State Treasury. The fund shall receive all moneys line 32 derived pursuant to this chapter . Upon appropriation by the line 33 Legislature, the department shall distribute moneys in the fund to line 34 eligible recipients in accordance with this chapter. line 35 SEC. 6. No reimbursement is required by this act pursuant to line 36 Section 6 of Article XIIIB of the California Constitution because line 37 a local agency or school district has the authority to le vy service line 38 charges, fees, or assessments sufficient to pay for the program or 99 — 28 — SB 897
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Communication: Senate Bill 897 - Bill Text (ITEM 3 SENATE BILL 897: ACCESSORY DWELLING UNITS: JUNIOR ACCESSORY DWELLING line 1 level of service mandated by this act, within the meaning of Section line 2 17556 of the Government Code.
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Communication: Senate Bill 897 - Bill Text (ITEM 3 SENATE BILL 897: ACCESSORY DWELLING UNITS: JUNIOR ACCESSORY DWELLING
Legislative Committee – March 8, 2022
Senate Bill 1067 – Housing Development Projects: Automobile Parking Requirements
1 Recommendation
Legislative Committee recommend the City Council adopt an “oppose” position regarding Senate Bill 1067.
Summary
Authored by Senator Anthony Portantino (D-25-La Cañada Flintridge), Senate Bill 1067 prohibits cities with a population of greater than 200,000 from imposing a minimum parking requirement on a housing development project that is located within a one-half mile of public transit and that either (1) dedicates 75% of the total units to low-income and very low-income households, the elderly, or persons with disabilities or (2) the developer demonstrates that the development would not have a negative impact on traffic circulation or existing nearby parking and the local agency’s ability to meet housing needs.
Background
Under current law, local governments have the authority to adopt minimum parking standards and impose those standards on developments built within their jurisdiction, as long as they are consistent with state law standards. Chapter 17.42, Residential Use Types, of the City’s Municipal Code, includes the following parking standards:
a. Single family unit – two enclosed parking spaces
b. Two family units – two enclosed parking spaces per unit c. Studio units – one enclosed parking space per unit
d. One-bedroom units – two enclosed parking spaces per unit e. Two-bedroom units – two enclosed parking spaces per unit f. Guest parking – one parking space per each two units g. Mobile home park – two spaces per unit, plus one guest per two units Packet Pg. 103
Communication: Senate Bill 1067- Staff Report (ITEM 4 SENATE BILL 1067: HOUSING DEVELOPMENT PROJECTS: AUTOMOBIL PARKING 2 This bill would preempt the aforementioned parking standards for specific residential developments that meet the aforementioned criteria and are located within a one-half mile distance of public transit. As prescribed in this bill, public transit includes high-quality transit corridors and major transit stops, as defined by state law.
State law defines a “high-quality transit corridor” as a corridor with fixed route bus service with service intervals no longer than 15 minutes during peak commute hours.
State law defines a “major transit stop” as an existing rail or bus rapid transit station or the intersection of two or more bus routes with a frequency of service interval of 15 minutes or less during peak commute hours.
Analysis
The City’s three existing Metrolink stations (Via Princessa, Santa Clarita, and Newhall) and one future station (Vista Canyon) are all “major transit stops,” as defined by state law. The City would be restricted from imposing minimum parking requirements to residential developments that meet the aforementioned criteria and are located within one-half mile of the four Metrolink stations and the following three corridors:
1. Soledad Canyon Road/Valencia Boulevard (beginning at the Santa Clarita Metrolink station and ending at McBean Parkway.)
2. Lyons Avenue (beginning at Railroad Avenue and ending at Wiley Canyon Road)
3. Newhall Avenue (beginning at Lyons Avenue and ending at Sierra Highway) The City imposes minimum on-site parking requirements to ensure that residents have adequate and reasonable access to their homes. Additionally, the standards serve as a safeguard to prevent congestion of vehicle parking that may cause unsafe conditions for surrounding residents and businesses and access challenges for emergency personnel, especially in the event of an emergency evacuation.
The City Council, upon the recommendation of the Legislative Committee, opposed a similar bill, Assembly Bill 1401 (Friedman), at the April 27, 2021, regular City Council meeting.
Additionally, the recommendation to oppose Senate Bill 1067 is consistent with the City of Santa Clarita 2022 Executive and Legislative Platform. Specifically, Component 1 under the “State” section advises that the City Council, “Oppose legislation that would interfere with, limit or eliminate the decision-making authority of municipalities in the area of local land use.”
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Communication: Senate Bill 1067- Staff Report (ITEM 4 SENATE BILL 1067: HOUSING DEVELOPMENT PROJECTS: AUTOMOBIL PARKING 3 Supporters
Unknown at this time.
Opponents
Unknown at this time.
Bill Status
Senate Bill 1067 was introduced on February 15, 2022, and was double referred to the Senate Governance and Finance Committee and Senate Housing Committee. A hearing date had not been scheduled at the time this report was developed.
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Communication: Senate Bill 1067- Staff Report (ITEM 4 SENATE BILL 1067: HOUSING DEVELOPMENT PROJECTS: AUTOMOBIL PARKING SENATE BILL No. 1067
Introduced by Senator Portantino
February 15, 2022
An act to add Section 65863.14 to the Government Code, relating to land use.
legislative counsel’s digest
SB 1067, as introduced, Portantino. Housing development projects:
automobile parking requirements.
The Planning and Zoning Law requires each county and city to adopt a comprehensive, long-term general plan for its physical development, and the de velopment of certain lands outside its boundaries, that includes, among other mandatory elements, a housing element. Existing law also authorizes the le gislative body of a city or a county to adopt ordinances establishing requirements for parking.
This bill would prohibit a city with a population greater than 200,000 from imposing an y minimum automobile parking requirement on a housing development project that is located within 1⁄2 mile of public transit, as defined, and that either (1) dedicates 75% of the total units to low- and very low income households, the elderly, or persons with disabilities or (2) the de veloper demonstrates to the local agenc y that the development would not have a negative impact on the local agency’s ability to meet specified housing needs and would not have a negative impact on traffic circulation or e xisting residential or commercial parking within 1⁄2 mile of the project. By changing the duties of local planning officials, this bill w ould impose a state-mandated local program.
The bill w ould include findings that changes proposed by this bill address a matter of state wide concern rather than a municipal af fair and, therefore, apply to all cities, including charter cities.
99 Packet Pg. 106
Communication: Senate Bill 1067- Bill Text (ITEM 4 SENATE BILL 1067: HOUSING DEVELOPMENT PROJECTS: AUTOMOBIL PARKING The California Constitution requires the state to reimb urse local agencies and school districts for certain costs mandated by the state.
Statutory provisions establish procedures for making that reimbursement.
This bill would provide that no reimbursement is required by this act for a specified reason.
Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: yes.
The people of the State of California do enact as follows:
line 1 SECTION 1. Section 65863.14 is added to the Government line 2 Code, immediately following Section 65863.13, to read:
line 3 65863.14. (a) A city with a population greater than 200,000 line 4 shall not impose or enforce an y minimum automobile parking line 5 requirement on a housing de velopment project that meets all of line 6 the following requirements:
line 7 (1) The development is located within one-half mile of public line 8 transit.
line 9 (2) The development satisfies either of the following:
line 10 (A) The development dedicates a minimum of 75 percent of the line 11 total number of housing units to lo w- and v ery lo w income line 12 households, the elderly, or persons with disabilities. line 13 (B) The developer demonstrates to the city that the development line 14 would not have a negative impact on any of the following:
line 15 (i) The city’s ability to meet its share of the re gional housing line 16 need in accordance with Section 65584 for lo w- and v ery low line 17 income households.
line 18 (ii) The city’s ability to meet any special housing needs for the line 19 elderly or persons with disabilities identified in the analysis line 20 required pursuant to paragraph (7) of subdi vision (a) of Section line 21 65583.
line 22 (iii) Traffic circulation or e xisting residential or commercial line 23 parking within one-half mile of the housing development project. line 24 (b) For purposes of this section:
line 25 (1) “Housing de velopment project” means a housing line 26 development project as defined in paragraph (2) of subdivision (h) line 27 of Section 65589.5.
line 28 (2) “Low- and very low income households” means the same line 29 as “lower income households” as defined in Section 50079.5 of line 30 the Health and Safety Code.
99 — 2 — SB 1067
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Communication: Senate Bill 1067- Bill Text (ITEM 4 SENATE BILL 1067: HOUSING DEVELOPMENT PROJECTS: AUTOMOBIL PARKING line 1 (3) “Public transit” means a major transit stop as defined in line 2 Section 21064.3 of the Public Resources Code, except that it also line 3 includes a major transit stop that is included in an applicable line 4 regional transportation plan.
line 5 SEC. 2. The Legislature finds and declares that Section 1 of line 6 this act adding Section 65863.14 to the Government Code address line 7 a matter of statewide concern rather than a municipal affair as that line 8 term is used in Section 5 of Article XI of the California line 9 Constitution. Therefore, Section 1 of this act applies to all cities, line 10 including charter cities.
line 11 SEC. 3. No reimbursement is required by this act pursuant to line 12 Section 6 of Article XIIIB of the California Constitution because line 13 a local agency or school district has the authority to le vy service line 14 charges, fees, or assessments sufficient to pay for the program or line 15 level of service mandated by this act, within the meaning of Section line 16 17556 of the Government Code.
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Communication: Senate Bill 1067- Bill Text (ITEM 4 SENATE BILL 1067: HOUSING DEVELOPMENT PROJECTS: AUTOMOBIL PARKING
Legislative Committee – March 8, 2022
Senate Bill 1108 – Shoplifting: Increased Penalties for Prior Crimes 1 Recommendation
Legislative Committee recommend the City Council adopt a “support” position regarding Senate Bill 1108.
Summary
Authored by Senator Patricia Bates (R-36-Laguna Niguel), Senate Bill 1108 reinstates prosecutorial authority to charge someone with a felony and imprisonment of up to three years, if they have been previously convicted three or more times of petty theft, shoplifting, grant theft, burglary, auto theft, robbery, elder financial abuse, or knowingly receiving stolen property. This provision of state law was originally repealed with the passage of Proposition 47 (2014).
Upon passage by the state legislature and approval by the Governor, this amendment to Proposition 47 (2014) is to be placed on the general election ballot on November 8, 2022, and requires a majority vote for final approval.
Proposition 47 (2014), titled, “The Safe Neighborhoods and Schools Act,” was approved by voters (59.6 percent – 40.4 percent) on November 4, 2014, and went into effect on November 5, 2014. At the City level, the measure failed with 47.19 percent in favor and 52.81 against.
Proposition 47 (2014) reduced penalties for certain property and drug offenses from felonies or wobblers, which could be charged as either a felony or misdemeanor, to misdemeanors. Under previous state law, shoplifting property worth $950 or less, a type of petty theft, was a misdemeanor. However, such crimes could also be charged as burglary, instead, if the shoplifter intended to shoplift upon entering the store, which could be prosecuted as a felony and sentenced up to three years in prison.
With the approval of Proposition 47 (2014), shoplifting property worth $950 or less is a misdemeanor, regardless of intent, and holds a sentence of up to one year in county jail and/or a fine up to $1,000.
According to the California Department of Justice, larceny-theft increased by approximately 10.7 percent and shoplifting increased by approximately 11.7 percent statewide a year after Proposition 47 (2014) went into effect. Similarly, in Los Angeles County, larceny-theft increased by approximately 10.3 percent and shoplifting increased by approximately 10.9 percent over that same period of time.
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Communication: Senate Bill 1108 - Staff Report (ITEM 5 SENATE BILL 1108: SHOPLIFTING: INCREASED PENALTIES FOR PRIOR CRIMES) 2 Coupled with Special Directives issued by Los Angeles County District Attorney, George Gascon, including the elimination of pretrial bail for misdemeanor, non-serious felony, and non- violent felony charges and automatically declining or dismissing several misdemeanor charges, repeat offenders, which can be used as an indicator to measure how recently adopted policies have impacted public safety, make up a significant portion of arrests in the Santa Clarita Valley.
Specifically, repeat offenders were over a third of all arrests made by the Santa Clarita Valley Sheriff’s Station in 2021. To provide greater detail on the severity of repeat offenders, two individuals have been arrested more than twenty times and over thirty-five individuals have been arrested ten or more times since March 2020 by the Santa Clarita Valley Sheriff’s Station.
The City Council, upon the recommendation of the Legislative Committee, supported the companion bill to Senate Bill 1108, Assembly Bill 1597 (Waldron), at the February 8, 2022, regular City Council meeting.
Additionally, the recommendation to support Senate Bill 1108 is consistent with the City of Santa Clarita 2022 Executive and Legislative Platform. Specifically, Component 2 under the “State” section advises that the City Council, “Support legislative efforts to address the negative impacts of AB 109, Proposition 47, and Proposition 57 on local governments and provide local law enforcement with the appropriate tools to reduce criminal activity.”
Supporters
Unknown at this time.
Opponents
Unknown at this time.
Bill Status
Senate Bill 1108 was introduced on February 16, 2022, and referred to the Senate Public Safety Committee. A hearing date had not been scheduled at the time this report was developed.
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Communication: Senate Bill 1108 - Staff Report (ITEM 5 SENATE BILL 1108: SHOPLIFTING: INCREASED PENALTIES FOR PRIOR CRIMES) SENATE BILL No. 1108
Introduced by Senator Bates
February 16, 2022
An act to amend Sections 459.5, 490.2, and 666 of the Penal Code, relating to crime, and calling an election, to take effect immediately. legislative counsel’s digest
SB 1108, as introduced, Bates. Shoplifting: increased penalties for prior crimes.
The existing Safe Neighborhoods and Schools Act, enacted as an initiative statute by Proposition 47, as appro ved by the electors at the November 4, 2014, state wide general election, mak es the theft of property that does not exceed $950 in value petty theft, and makes that crime punishable as a misdemeanor , with certain e xceptions. The initiative statute defines shoplifting as entering a commercial establishment with the intent to commit larceny while that establishment is open during re gular hours, where the v alue of the property that is taken or intended to be taken does not exceed $950. The initiative statute requires that shoplifting be punished as a misdemeanor.
Existing law, as amended by Proposition 47, provides that a registered sex offender or a person with a prior con viction for certain serious or violent felonies, such as a sexually violent offense, who commits petty theft, is subject to imprisonment in the county jail for up to one year or in the state prison for 16 months, or 2 or 3 years.
This bill w ould reinstate a pro vision of la w that w as repealed by Proposition 47 that provides that a person who has been convicted 3 or more times of petty theft, grand theft, or other specified crimes and who is subsequently convicted of petty theft is subject to imprisonment in a county jail not exceeding one year or in a county jail for 16 months or 2 or 3 years. The bill would also make this provision and the provision
99 Packet Pg. 111
Communication: Senate Bill 1108 - Bill Text (ITEM 5 SENATE BILL 1108: SHOPLIFTING: INCREASED PENALTIES FOR PRIOR CRIMES) relating to a person with serious, violent, or se xual prior of fenses applicable to a person whose prior or current con viction is for shoplifting.
This bill w ould call a special election to be consolidated with the November 8, 2022, statewide general election. This bill would require the Secretary of State to submit the pro visions of the bill that amend the initiative statute to the electors for their approval at the November 8, 2022, consolidated election.
This bill would declare that it is to take effect immediately as an act calling an election.
Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no.
The people of the State of California do enact as follows:
line 1 SECTION 1. Section 459.5 of the Penal Code is amended to line 2 read:
line 3 459.5. (a) Notwithstanding Section 459, shoplifting is defined line 4 as entering a commercial establishment with intent to commit line 5 larceny while that establishment is open during re gular business line 6 hours, where the value of the property that is taken or intended to line 7 be taken does not e xceed nine hundred fifty dollars ($950). Any line 8 other entry into a commercial establishment with intent to commit line 9 larceny is b urglary. Shoplifting shall be punished as a line 10 misdemeanor, e xcept that a person with one or more prior line 11 convictions for an offense specified in clause (iv) of subparagraph line 12 (C) of paragraph (2) of subdi vision (e) of Section 667 or for an line 13 offense requiring registration pursuant to subdivision (c) of Section line 14 290 may be punished pursuant to subdivision (h) of Section 1170. line 15 as follows:
line 16 (1) A person with one or more prior convictions for an offense line 17 specified in clause (iv) of subpar agraph (C) of par agraph (2) of line 18 subdivision (e) of Section 667 or for an of fense r equiring line 19 registration pur suant to subdivision (c) of Section 290 may be line 20 punished pursuant to subdivision (h) of Section 1170. line 21 (2) A person who meets the requirements of subdivision (a) or line 22 (b) of Section 666 may be punished pursuant to that section. line 23 (b) Any act of shoplifting as defined in subdivision (a) shall be line 24 charged as shoplifting. No A person who is charged with shoplifting 99 — 2 — SB 1108
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Communication: Senate Bill 1108 - Bill Text (ITEM 5 SENATE BILL 1108: SHOPLIFTING: INCREASED PENALTIES FOR PRIOR CRIMES) line 1 may not also be char ged with b urglary or theft of the same line 2 property.
line 3 SEC. 2. Section 490.2 of the Penal Code is amended to read:
line 4 490.2. (a) Notwithstanding Section 487 or any other provision line 5 of law defining grand theft, obtaining any property by theft where line 6 the value of the money, labor, real or personal property taken does line 7 not exceed nine hundred fifty dollars ($950) shall be consider ed line 8 petty theft and shall be punished as a misdemeanor , except as line 9 follows:
line 10 (a) Notwithstanding Section 487 or any other provision of law line 11 defining grand theft, obtaining an y property by theft where the line 12 value of the money, labor, real or personal property taken does not line 13 exceed nine hundred fifty dollars ($950) shall be considered petty line 14 theft and shall be punished as a misdemeanor, except that such line 15 (1) A person may instead be punished pursuant to subdi vision line 16 (h) of Section 1170 if that person has one or more prior convictions line 17 for an of fense specified in clause (i v) of subparagraph (C) of line 18 paragraph (2) of subdivision (e) of Section 667 or for an of fense line 19 requiring registration pursuant to subdivision (c) of Section 290. line 20 (2) A person who meets the requirements of subdivision (a) or line 21 (b) of Section 666 may be punished pursuant to that section. line 22 (b) This section shall does not be applicable apply to any theft line 23 that may be charged as an infraction pursuant to any other provision line 24 of law.
line 25 (c) This section shall does not apply to theft of a firearm. line 26 SEC. 3. Section 666 of the Penal Code is amended to read:
line 27 666. (a) Notwithstanding Section 490, e very per son who, line 28 having been con victed thr ee or mor e times of petty theft, line 29 shoplifting, grand theft, a conviction pursuant to subdivision (d) line 30 or (e) of Section 368, auto theft under Section 10851 of the Vehicle line 31 Code, b urglary, carjac king, r obbery, or a felony con viction of line 32 Section 496 and having served a term ther eof in any penal line 33 institution or having been imprisoned ther ein as a condition of line 34 probation for that of fense, and who is subsequently con victed of line 35 petty theft or shoplifting is punishable by imprisonment in a county line 36 jail not e xceeding one year , or imprisonment pur suant to line 37 subdivision (h) of Section 1170.
line 38 (a)
line 39 (b) (1) Notwithstanding Section 490, any person described in line 40 subdivision (b) paragraph (2) who, having been convicted of petty 99 SB 1108 — 3 —
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Communication: Senate Bill 1108 - Bill Text (ITEM 5 SENATE BILL 1108: SHOPLIFTING: INCREASED PENALTIES FOR PRIOR CRIMES) line 1 theft, shoplifting, grand theft, a conviction pursuant to subdivision line 2 (d) or (e) of Section 368, auto theft under Section 10851 of the line 3 Vehicle Code, burglary, carjacking, robbery, or a felony violation line 4 of Section 496, and having served a term of imprisonment therefor line 5 in any penal institution or ha ving been imprisoned therein as a line 6 condition of probation for that of fense, and who is subsequently line 7 convicted of petty theft, theft or shoplifting , is punishable by line 8 imprisonment in the county jail not exceeding one year, or in the line 9 state prison.
line 10 (b)
line 11 (2) Subdivision (a) Paragraph (1) shall apply to an y person line 12 who is required to re gister pursuant to the Se x Of fender line 13 Registration Act, or who has a prior violent or serious felon y line 14 conviction, as specified in clause (i v) of subparagraph (C) of line 15 paragraph (2) of subdivision (e) of Section 667, or has a conviction line 16 pursuant to subdivision (d) or (e) of Section 368. line 17 (c) This section shall not be construed to preclude prosecution line 18 or punishment pursuant to subdi visions (b) to (i), inclusi ve, of line 19 Section 667, or Section 1170.12.
line 20 SEC. 4. (a) Sections 1, 2, and 3 of this act amend the Safe line 21 Neighborhoods and Schools Act, Proposition 47, an initiati ve line 22 statute, and shall become ef fective only when submitted to and line 23 approved by the voters at a statewide election. line 24 (b) A special election is hereby called, to be held throughout line 25 the state on No vember 8, 2022, for appro val by the v oters of line 26 Sections 1, 2, and 3 of this act. The special election shall be line 27 consolidated with the statewide general election to be held on that line 28 date. The consolidated election shall be held and conducted in all line 29 respects as if there were only one election, and only one form of line 30 ballot shall be used.
line 31 (c) Notwithstanding the requirements of Sections 9040, 9043, line 32 9044, 9061, 9082, and 9094 of the Elections Code, or an y other line 33 law, the Secretary of State shall submit Sections 1, 2, and 3 of this line 34 act to the v oters for their appro val at the No vember 8, 2022, line 35 statewide general election.
line 36 SEC. 5. This act calls an election within the meaning of Article line 37 IV of the California Constitution and shall go into immediate effect.
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99 — 4 — SB 1108
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Communication: Senate Bill 1108 - Bill Text (ITEM 5 SENATE BILL 1108: SHOPLIFTING: INCREASED PENALTIES FOR PRIOR CRIMES)