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§ 5537. Diversity Reporting and Audit, Credit Percentage Increase.

10 CA ADC § 5537Barclays Official California Code of RegulationsEffective: February 8, 2024

Barclays California Code of Regulations
Title 10. Investment
Chapter 7.75. California Film Commission
Article 4. California Soundstage Filming Tax Credit Program
Effective: February 8, 2024
10 CCR § 5537
§ 5537. Diversity Reporting and Audit, Credit Percentage Increase.
(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:
(1) A description, including evidence, of whether the applicant achieved the goals included in its approved diversity workplan.
(2) If a goal was not achieved, a description and evidence of the good faith efforts the applicant undertook to achieve the goal.
(3) If the applicant is unable to report on whether a goal was achieved, due to a lack of information from its employees or for any other reason, a description and evidence of the methods the applicant undertook to measure such goal and why it could not be determined.
(4) Nothing in this section shall be construed to require or encourage the final diversity report to include numeric reporting regarding protected classifications, including race, ethnicity, gender, and disability status as evidence of whether goals were met.
(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.

Credits

Note: Authority cited: Sections 17053.98(k)(10) and 23698(k)(10), Revenue and Taxation Code; and Section 11152, Government Code. Reference: Sections 17053.98(k)(1), 17053.98(k)(3), 23698(k)(1) and 23698(k)(3), Revenue and Taxation Code; and Section 14998.1, Government Code.
History
1. New section filed 4-11-2022 as an emergency; operative 4-11-2022 (Register 2022, No. 15). A Certificate of Compliance must be transmitted to OAL by 10-10-2022 or emergency language will be repealed by operation of law on the following day.
2. New section refiled with amendments 10-3-2022 as an emergency; operative 10-11-2022 (Register 2022, No. 40). A Certificate of Compliance must be transmitted to OAL by 1-9-2023 or emergency language will be repealed by operation of law on the following day.
3. Refiling of 10-3-2022 emergency on 1-9-2023; operative 1-10-2023 (Register 2023, No. 2). A Certificate of Compliance must be transmitted to OAL by 4-10-2023 or emergency language will be repealed by operation of law on the following day.
4. Certificate of Compliance as to 10-3-2022 order, including amendment of subsections (c) and (e) and amendment of Note, transmitted to OAL 1-3-2023 and filed 2-15-2023; amendments effective 2-15-2023 pursuant to Government Code section 11343.4(b)(3) (Register 2023, No. 7).
5. Amendment of subsections (a), (b)(4) and (c)-(d) filed 8-18-2023 as an emergency; operative 8-18-2023 (Register 2023, No. 33). A Certificate of Compliance must be transmitted to OAL by 2-14-2024 or emergency language will be repealed by operation of law on the following day.
6. Certificate of Compliance as to 8-18-2023 order, including amendment of subsection (d), transmitted to OAL 12-26-2024 and filed 2-8-2024; amendments effective 2-8-2024 pursuant to Government Code section 11343.4(b)(3) (Register 2024, No. 6).
This database is current through 4/5/24 Register 2024, No. 14.
Cal. Admin. Code tit. 10, § 5537, 10 CA ADC § 5537
End of Document