California Gov. Gavin Newsom has proposed another major expansion of the state’s film and television tax credit program, raising its annual value from $750 million to at least $1 billion.

Announced Monday, the proposal would broaden eligibility to include above-the-line expenses such as actors’ salaries, subject to funding limits. It would also set aside $100 million annually for independent productions, an increase of $26 million over the current program.

The plan includes a 5% tax credit increase for companies that commit to at least two distinct qualifying productions in California. It would also extend the program’s sunset period from five years to 10 years, with the stated aim of providing greater predictability for long-term production investment.

Newsom’s term ends on Jan. 4, leaving implementation of the proposal to his successor. Xavier Becerra, the Democratic nominee, has said he supports strengthening the existing incentive but has not specified which changes he would endorse. Some industry stakeholders are seeking an unlimited tax credit, a position to which Becerra has not committed.

The proposal follows a recent Assembly committee hearing on measures that included removing the $750 million cap, allowing above-the-line expenses, expanding eligibility and extending the program’s expiration date. Union leaders and representatives of the Motion Picture Association told the committee that California needs to make its incentive more competitive with programs in other states.

Newsom also renewed his call for Congress to pass the federal Motion Picture, Television, and Entertainment Revitalization Act by the end of 2026. The bipartisan-supported legislation would create a 20% base tax credit for qualifying film, television and visual-effects projects produced in the United States.

California increased its film and television tax credit from $330 million to $750 million last year, but production levels have continued to decline. The proposed expansion is intended to attract more productions and related jobs to the state.

According to Newsom’s office, the $750 million program has generated $8.24 billion in direct production spending to date, including $5.3 billion in qualified expenditures and $3.2 billion in qualified wages for more than 43,000 cast and crew jobs.

Sources: Variety.