Section 5554.2 - [Operative 4/1/2025] Interim and Final Diversity, Equity, Inclusion, and Accessibility Assessments(a) Prior to the start of principal photography, an approved applicant that opts in to the diversity provisions of Revenue and Taxation Code sections 17053.98.1(g)(3)(D) and 23698.1(g)(3)(D) shall submit a diversity, equity, inclusion, and accessibility interim assessment, Form DEIA3 (January 1, 2025), hereby incorporated by reference, consistent with Form DEIA1 (January 1, 2025) and Form DEIA2 (January 1, 2025), hereby incorporated by reference, submitted by the applicant.(1) In reviewing an applicant's Form DEIA3 for determination, the CFC will consider whether: (A) The applicant has made progress towards its goals stated in Form DEIA2.(B) The applicant has a clear plan for how to progress towards and meet its goals stated in Form DEIA2.(C) The applicant has identified any barriers to meeting its goals stated in Form DEIA2, and if so has identified steps to overcome those barriers.(D) The responses in Form DEIA3 are original and/or demonstrably tailored to the project, thoroughly detailed, and indicate that the applicant is making a good-faith effort toward achieving its goals.(2) The CFC will review the applicant's Form DEIA3 and within thirty (30) calendar days of the date of submission will provide its determination of whether the Form DEIA3 indicates that the qualified motion picture is making a good-faith effort to meet the goals of its diversity workplan.(3) Failure to submit Form DEIA3 prior to start of principal photography shall constitute opting out of the diversity provisions of 17053.98.1(g)(3)(D) and 23698.1(g)(3)(D) of the Revenue and Taxation Code, regardless of an applicant's previously stated intent or submitted materials. Opting out means an applicant, except an independent film with a qualified expenditure budget of ten million dollars ($10,000,000) or less, shall be eligible for tax credit certification of at most the sum that equals ninety-six percent (96%) of the total sum of allocated credits, including uplifts, subject to verification and audit. (A) An applicant whose start date for principal photography falls within thirty (30) calendar days of CAL issuance for its project shall be given an extension to submit its Form DEIA3 no later than the business day following the date of CFC approval of its Form DEIA2, if that date falls on or after the start date of principal photography for the project.(b) Within sixty (60) calendar days of the creation of the final element, an approved applicant that opts in to the diversity provisions of Revenue and Taxation Code sections 17053.98.1(g)(3)(D) and 23698.1(g)(3)(D) shall submit a final diversity, equity, inclusion, and accessibility assessment to the CFC. The final assessment required pursuant to Revenue and Taxation Code sections 17053.98.1(g)(3)(D)(ii)(III) and 23698.1(g)(3)(D)(ii)(III) shall include two separate parts.(1) Part one shall consist of Form DEIA4 (January 1, 2025), hereby incorporated by reference, and shall be clearly and completely separated from part two of the final assessment. Only the information provided in part one of the DEIA Final Assessment, Form DEIA4, shall be considered by the CFC in determining whether the applicant has met or made a good-faith effort to meet the goals of its diversity, equity, inclusion, and accessibility Workplan, Form DEIA2.(2) Part two shall be submitted in accordance with section 5555(b)(5)(H) of this article and shall include: (A) A listing of voluntary, self-reported race/ethnicity and gender statistics for all individuals who received qualified wages, as required pursuant to sections 17053.98.1(d)(1)(J), 17053.98.1(g)(2)(A)(iv), 23698.1(d)(1)(J), and 23698.1(g)(2)(A)(iv) of the Revenue and Taxation Code.(B) A listing of voluntary, self-reported race/ethnicity and gender statistics for all individuals who received non-qualified wages on the motion picture project, as required pursuant to sections 17053.98.1(d)(1)(E), 17053.98.1(g)(2)(A)(iv), 23698.1(d)(1)(J), and 23698.1(g)(2)(A)(iv) of the Revenue and Taxation Code.(C) Part two shall be clearly and completely separated from part one of the final assessment and the statistics presented in part two shall not be referenced in part one. The statistics presented in part two shall have no bearing on the goals and outcomes presented by the applicant in part one and will not be considered by the CFC in determining whether the applicant has met or made a good-faith effort to meet the goals of its diversity workplan. 1. The data required pursuant to this paragraph shall be submitted by all approved applicants in the California Film and Television Tax Credit Program 4.0, including an independent film with a qualified expenditure budget of ten million dollars ($10,000,000) or less and an applicant that has opted out of the requirements of Revenue and Taxation Code sections 17053.98.1(g)(3)(D) and 23698.1(g)(3)(D).(3) Within thirty (30) calendar days of receipt of an applicant's Form DEIA4, the Director of the CFC, or their designee, will notify the applicant whether the applicant has been determined to have met or made a good-faith effort to meet its diversity goals and is eligible for certification of one hundred percent (100%) of its allocated tax credits or has been determined not to have met or made a good-faith effort to meet its diversity goals and is eligible to have ninety-six percent (96%) of its allocated tax credits certified.(A) The applicant shall submit this determination to the CPA performing its final audit pursuant to section 5555(b)(6) of this article.(4) Failure to submit Form DEIA4 within the timeframe specified in subdivision (b) above shall constitute opting out of the diversity provisions of 17053.98.1(g)(3)(D) and 23698.1(g)(3)(D) of the Revenue and Taxation Code, regardless of an applicant's previously stated intent or submitted materials. Opting out means an applicant, except an independent film with a qualified expenditure budget of ten million dollars ($10,000,000) or less, shall be eligible for tax credit certification of at most the sum that equals ninety-six percent (96%) of the total sum of allocated credits, including uplifts, subject to verification and audit.(c) The CFC will reject any submitted Form DEIA3 or Form DEIA4 that includes quotas or other numeric goals regarding a protected class, including, but not limited to race, ethnicity, gender, and disability status.Cal. Code Regs. Tit. 10, § 5554.2
Note: Authority cited: Sections 17053.98.1(e) and 23698.1(e), Revenue and Taxation Code; and Section 11152, Government Code. Reference: Sections 17053.98.1(d), 17053.98.1(g), 23698.1(d) and 23698.1(g), Revenue and Taxation Code; and Section 14998.1, Government Code.
1. New section filed 12-17-2024; operative 4/1/2025 (Register 2024, No. 51).