(a) After an applicant's Phase A and B submissions are approved by the CFC, and the qualified motion picture has been produced and the final element has been created, the applicant may proceed to submit the following described diversity report to the CFC for review. The diversity report required pursuant to this section must be submitted to the CFC and approved before the applicant can proceed to submit the documentation described in section 5540 and seek tax credit certification.

(b) The final diversity report required by Revenue and Taxation Code sections 17053.98(k)(3) and 23698(k)(3) shall include:

(c) Within forty-five (45) business days of receipt of the final diversity report, the Director of the CFC, or their designee, will notify the applicant whether the report meets the requirements under subdivision (b) of this section and is approved or does not meet the requirements under subdivision (b) of this section and is rejected, or if the CFC decides an audit of the final diversity report is necessary. If rejected, the CFC will provide feedback and an applicant may revise and re-submit its final diversity report.

(d) Should the CFC decide an audit of the applicant's final diversity report is necessary to determine if the diversity goals set forth in the applicant's diversity workplan for the motion picture were achieved, the applicant must provide requested documentation to the CFC. The CFC may direct the applicant to work with the CPA performing the Soundstage AUP (August 28, 2023), hereby incorporated by reference, described in section 5540, to verify the content of the final diversity report. Documentation or other information requested may include redactions, be aggregated, or otherwise protected to ensure confidentiality of sensitive personal or other information. The applicant is responsible for all costs associated with this additional requirement. Within thirty (30) business days of receipt of the requested documentation from the applicant or the CPA's report, the Director of the CFC, or their designee, will notify the applicant whether the report is approved or rejected.

(e) If the CFC determines that the applicant has met or has made a good faith effort to meet the goals in its diversity workplan, as described and evidenced through its approved final diversity report, the applicant's tax credit percentage shall be increased by up to four percentage points as specified in Revenue and Taxation Code sections 17053.98(k)(3)(D)(iv) and 23698(k)(3)(D)(iv); two percentage points will be added if the applicant has met or made a good faith effort to meet its goals for individuals whose wages are included in qualified wages, and two percentage points will be added if the applicant has met or made a good faith effort to meet its goals for individuals whose wages are not included in qualified wages.