Section 5553.3 - [Operative 4/1/2025] Diversity, Equity, Inclusion, and Accessibility Checklist and Workplan(a) Any applicant for an allocation of tax credits under the California Film and Television Tax Credit Program 4.0 that moves on to Phase II of the application process in accordance with subdivisions (k) and (l) of section 5553, shall submit to the CFC a completed diversity checklist, Form DEIA1, (January 1, 2025), hereby incorporated by reference, pursuant to sections 17053.98.1(b)(19)(B)(vi) and 23698.1(b)(19)(B)(vi) of the Revenue and Taxation Code.(1) The submission of a diversity checklist is mandatory for all Phase II applicants; failure to submit the diversity checklist shall result in disqualification.(b) An approved applicant that opts in to the diversity provisions of sections 17053.98.1(g)(3)(D) and 23698.1(g)(3)(D) shall, within thirty (30) calendar days of CAL issuance, submit to the CFC a diversity, equity, inclusion, and accessibility workplan, Form DEIA2 (January 1, 2025), hereby incorporated by reference, consistent with the diversity checklist referenced in subdivision (a) of this section. (1) Failure to submit Form DEIA2 within the timeframe specified in subdivision (b) 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. 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) In reviewing an applicant's Form DEIA2 for approval or rejection, the CFC will consider, to the extent allowed by federal and state law, whether:(1) The applicant has included goals related to the focus areas detailed in Form DEIA1 (January 1, 2025) and Form DEIA2 (January 1, 2025) and as required pursuant to sections 17053.98.1(g)(3)(D)(ii)(I)(ia), 17053.98.1(g)(3)(D)(ii)(I)(ib), 23698.1(g)(3)(D)(ii)(I)(ia), and 23698.1(g)(3)(D)(ii)(I)(ib) of the Revenue and Taxation Code.(2) The applicant has included a detailed description of the proposed strategies the applicant will employ to meet or make a good-faith effort to meet its non-numeric goals, as required pursuant to sections 17053.98.1(g)(3)(D)(ii)(I)(ic) and 23698.1(g)(3)(D)(ii)(I)(ic) of the Revenue and Taxation Code.(3) The applicant has included a detailed description of how the proposed strategies may help achieve goals that are broadly reflective of California's population, in terms of factors such as race, ethnicity, gender, and disability status, as required pursuant to sections 17053.98.1(g)(3)(D)(ii)(I) and 23698.1(g)(3)(D)(ii)(I) of the Revenue and Taxation Code.(4) The goals and strategies described are:(A) Original and/or demonstrably tailored to the project; and(B) Thoroughly detailed; and(C) Reasonably achievable within the scope of the project.(d) The CFC will reject any submitted Form DEIA2 that includes quotas or other numeric goals regarding protected classes, including race, ethnicity, gender, and disability status.(e) Within thirty (30) calendar days of receipt of an applicant's Form DEIA2, the Director of the CFC, or their designee, will notify the applicant whether the diversity workplan is approved or rejected.(1) If a diversity workplan is rejected, the CFC will provide feedback and an applicant may revise and resubmit its workplan within thirty (30) calendar days of the notice of rejection.(A) An applicant that does not submit its amended Form DEIA2 within the timeframe specified in paragraph (1) or that does not amend its Form DEAI2 in accordance with CFC feedback shall be considered not to have met the diversity workplan provision of sections 17053.98.1(g)(3)(D)(ii)(I) and 23698.1(g)(3)(D)(ii)(I) of the Revenue and Taxation Code. Not meeting this provision means that 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.Cal. Code Regs. Tit. 10, § 5553.3
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(b), 17053.98.1(g), 23698.1(b) 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).