Full Text of SB1286 97th General Assembly
SB1286sam001 97TH GENERAL ASSEMBLY | Sen. Mike Jacobs Filed: 3/30/2011
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| 1 | | AMENDMENT TO SENATE BILL 1286
| 2 | | AMENDMENT NO. ______. Amend Senate Bill 1286 by replacing | 3 | | everything after the enacting clause with the following:
| 4 | | "Section 5. The Film
Production Services Tax Credit Act of | 5 | | 2008 is amended by changing Sections 10 and 40 and by adding | 6 | | Section 42 as follows: | 7 | | (35 ILCS 16/10)
| 8 | | Sec. 10. Definitions. As used in this Act:
| 9 | | "Accredited production" means: (i) for productions | 10 | | commencing before May 1, 2006, a film, video, or television | 11 | | production that
has been certified by the Department in which | 12 | | the aggregate Illinois labor
expenditures
included in the cost | 13 | | of the production, in the period that ends 12 months after
the | 14 | | time principal filming or taping of the production began, | 15 | | exceed $100,000
for productions of 30 minutes or longer, or | 16 | | $50,000 for productions of less
than 30
minutes; and (ii) for |
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| 1 | | productions commencing on or after May 1, 2006, a film, video, | 2 | | or television production that has been certified by the | 3 | | Department in which the Illinois production spending included | 4 | | in the cost of production in the period that ends 12 months | 5 | | after the time principal filming or taping of the production | 6 | | began exceeds $100,000 for productions of 30 minutes or longer | 7 | | or exceeds $50,000 for productions of less than 30 minutes. | 8 | | "Accredited production" does not include a production that:
| 9 | | (1) is news, current events, or public programming, or | 10 | | a program that
includes weather or market reports;
| 11 | | (2) is a talk show;
| 12 | | (3) is a production in respect of a game, | 13 | | questionnaire, or contest;
| 14 | | (4) is a sports event or activity;
| 15 | | (5) is a gala presentation or awards show;
| 16 | | (6) is a finished production that solicits funds;
| 17 | | (7) is a production produced by a film production | 18 | | company if records, as
required
by 18
U.S.C. 2257, are to | 19 | | be maintained by that film production company with respect
| 20 | | to any
performer portrayed in that single media or | 21 | | multimedia program; or
| 22 | | (8) is a production produced primarily for industrial, | 23 | | corporate, or
institutional purposes.
| 24 | | "Accredited production" includes an accredited animated | 25 | | production. | 26 | | "Accredited animated production" means fully animated |
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| 1 | | feature with a total production period of more than 12 months. | 2 | | "Accredited production certificate" means a certificate | 3 | | issued by the
Department certifying that the production is an | 4 | | accredited production that
meets the guidelines of this Act.
| 5 | | "Applicant" means a taxpayer that is a film production | 6 | | company that is
operating or has operated an accredited | 7 | | production located within the State of
Illinois and that
(i) | 8 | | owns the copyright in the accredited production throughout the
| 9 | | Illinois production period or (ii)
has contracted directly with | 10 | | the owner of the copyright in the
accredited production
or a | 11 | | person acting on behalf of the owner
to provide services for | 12 | | the production, where the owner
of the copyright is not an | 13 | | eligible production corporation.
| 14 | | "Credit" means:
| 15 | | (1) for an accredited production approved by the | 16 | | Department on or before January 1, 2005 and commencing | 17 | | before May 1, 2006, the amount equal to 25% of the Illinois | 18 | | labor
expenditure approved by the Department.
The | 19 | | applicant is deemed to have paid, on its balance due day | 20 | | for the year, an
amount equal to 25% of its qualified | 21 | | Illinois labor expenditure for the tax
year. For Illinois | 22 | | labor expenditures generated by the employment of | 23 | | residents of geographic areas of high poverty or high | 24 | | unemployment, as determined by the Department, in an | 25 | | accredited production commencing before May 1, 2006 and
| 26 | | approved by the Department after January 1, 2005, the |
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| 1 | | applicant shall receive an enhanced credit of 10% in | 2 | | addition to the 25% credit; and | 3 | | (2) for an accredited production commencing on or after | 4 | | May 1, 2006, the amount equal to: | 5 | | (i) 20% of the Illinois production spending for the | 6 | | taxable year; plus | 7 | | (ii) 15% of the Illinois labor expenditures | 8 | | generated by the employment of residents of geographic | 9 | | areas of high poverty or high unemployment, as | 10 | | determined by the Department; and
| 11 | | (3) for an accredited production commencing on or after | 12 | | January 1, 2009, other than an accredited animated | 13 | | production qualifying under item (4), the amount equal to: | 14 | | (i) 30% of the Illinois production spending for the | 15 | | taxable year; plus | 16 | | (ii) 15% of the Illinois labor expenditures | 17 | | generated by the employment of residents of geographic | 18 | | areas of high poverty or high unemployment, as | 19 | | determined by the Department ; and . | 20 | | (4) for an accredited animated production commencing | 21 | | on or after January 1, 2012: | 22 | | (i) 30% of the anticipated Illinois production | 23 | | spending for the entire production period; plus | 24 | | (ii) 15% of the anticipated Illinois labor | 25 | | expenditures generated by the employment of residents | 26 | | of geographic areas of high poverty or high |
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| 1 | | unemployment, as determined by the Department, during | 2 | | the entire production period. | 3 | | The credits awarded for an accredited animated | 4 | | production commencing on or after January 1, 2012 shall be | 5 | | awarded as provided in Section 42. | 6 | | "Department" means the Department of Commerce and Economic | 7 | | Opportunity.
| 8 | | "Director" means the Director of Commerce and Economic | 9 | | Opportunity.
| 10 | | "Illinois labor expenditure" means
salary or wages paid to | 11 | | employees of the
applicant for services on the accredited
| 12 | | production;
| 13 | | To qualify as an Illinois labor expenditure, the | 14 | | expenditure must be:
| 15 | | (1) Reasonable in the circumstances.
| 16 | | (2) Included in the federal income tax basis of the | 17 | | property.
| 18 | | (3) Incurred by the applicant for services on or after | 19 | | January 1, 2004.
| 20 | | (4) Incurred for the production stages of the | 21 | | accredited production, from
the final
script stage to the | 22 | | end of the post-production stage.
| 23 | | (5) Limited to the first $25,000 of wages paid or | 24 | | incurred to each
employee of a production commencing before | 25 | | May 1, 2006 and the first $100,000 of wages paid or | 26 | | incurred to each
employee of
a production commencing on or |
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| 1 | | after May 1, 2006.
| 2 | | (6) For a production commencing before May 1, 2006, | 3 | | exclusive of the salary or wages paid to or incurred for | 4 | | the 2 highest
paid
employees of the production.
| 5 | | (7) Directly attributable to the accredited | 6 | | production.
| 7 | | (8) Except for expenditures paid with respect to an | 8 | | accredited animated production, paid Paid in the tax year
| 9 | | for which the applicant is claiming the credit
or no later | 10 | | than 60 days after the end of the tax
year.
| 11 | | (9) Paid to persons resident in Illinois at the time | 12 | | the payments were
made.
| 13 | | (10) Paid for services rendered in Illinois.
| 14 | | "Illinois production spending" means the expenses incurred | 15 | | by the applicant for an accredited production, including, | 16 | | without limitation, all of the following: | 17 | | (1) expenses to purchase, from vendors within | 18 | | Illinois, tangible personal property that is used in the | 19 | | accredited production; | 20 | | (2) expenses to acquire services, from vendors in | 21 | | Illinois, for film production, editing, or processing; and | 22 | | (3) the compensation, not to exceed $100,000 for any | 23 | | one employee, for contractual or salaried employees who are | 24 | | Illinois residents performing services with respect to the | 25 | | accredited production. | 26 | | "Qualified production facility" means stage facilities in |
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| 1 | | the State in which television shows and films are or are | 2 | | intended to be regularly produced and that contain at least one | 3 | | sound stage of at least 15,000 square feet.
| 4 | | Rulemaking authority to implement this amendatory Act of | 5 | | the 95th General Assembly, if any, is conditioned on the rules | 6 | | being adopted in accordance with all provisions of the Illinois | 7 | | Administrative Procedure Act and all rules and procedures of | 8 | | the Joint Committee on Administrative Rules; any purported rule | 9 | | not so adopted, for whatever reason, is unauthorized. | 10 | | (Source: P.A. 95-720, eff. 5-27-08; 95-1006, eff. 12-15-08.) | 11 | | (35 ILCS 16/40)
| 12 | | Sec. 40. Amount and duration of the credit. The amount of | 13 | | the credit awarded under this Act is based on the amount of the | 14 | | Illinois labor expenditure and Illinois production spending | 15 | | approved by the Department for the production as set forth | 16 | | under Section 10. The duration of the credit may not exceed (i) | 17 | | one taxable year for productions other than accredited animated | 18 | | productions or (ii) for accredited animated productions, the | 19 | | period beginning with the taxable year in which the production | 20 | | commences and ending with the taxable year in which the final | 21 | | audit required under Section 42 is complete. .
| 22 | | (Source: P.A. 95-720, eff. 5-27-08 .) | 23 | | (35 ILCS 16/42 new) | 24 | | Sec. 42. Accredited animated productions. Each applicant |
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| 1 | | requesting credits for an accredited animated production | 2 | | commencing on or after January 1, 2012 must enter into an | 3 | | agreement with the Department detailing (i) the applicant's | 4 | | anticipated Illinois production spending for the entire | 5 | | production period and (ii) the anticipated Illinois labor | 6 | | expenditures generated by the employment of residents of | 7 | | geographic areas of high poverty or high unemployment. The | 8 | | accredited production certificate for an accredited animated | 9 | | production shall list those amounts. An applicant that is | 10 | | awarded a credit for an accredited animated production is | 11 | | entitled to take (i) 25% of the total credit awarded in the | 12 | | taxable year in which Stage 1 of the production is completed, | 13 | | (ii) 25% of the total credit awarded in the taxable year in | 14 | | which Stage 2 of the production is completed, (iii) 25% of the | 15 | | total credit awarded in the taxable year in which Stage 3 of | 16 | | the production is completed, and (iv) 25% of the total credit | 17 | | awarded in the taxable year in which Stage 4 of the production | 18 | | is completed, including the final audit. | 19 | | For the purposes of this Section: | 20 | | Stage 1 of the production is considered complete upon | 21 | | review and approval by the Department of an animatic reel in | 22 | | QuickTime format(with watermark). "Animatic reel" means a | 23 | | timed and edited compilation of images/storyboard | 24 | | pre-visualising the final feature from first to last scene, | 25 | | including dialogue from the first pass voice recording or | 26 | | "scratch track". The completion of Stage 1 is the end of |
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| 1 | | pre-production and includes the culmination of the following: | 2 | | (1) conclusion of the screenplay; | 3 | | (2) conclusion of the initial dialogue record; | 4 | | (3) asset design (2D); and | 5 | | (4) conclusion of the storyboard stage. | 6 | | Stage 2 of the production is considered complete upon | 7 | | review and approval by the Department of a | 8 | | pre-visualization/blocking reel in QuickTime format (with | 9 | | watermark). "Pre-visualization/blocking reel" means a timed | 10 | | and edited compilation of rendered 3D pre-visualization from | 11 | | the first to last scene, including any and all motion capture. | 12 | | The completion of Stage 2 includes the completion of asset | 13 | | modeling and asset rigging. | 14 | | Stage 3 of the production is considered complete upon | 15 | | review and approval by the Department of the first animation | 16 | | pass in QuickTime format (with watermark). "First animation | 17 | | pass" means a timed and edited compilation of rendered | 18 | | animation from the first to last scene, including the second | 19 | | dialogue pass. The completion of Stage 3 means the completion | 20 | | of asset surfacing: color and texture, | 21 | | pre-visualization/motion capture, and the progress of | 22 | | animation stage. | 23 | | Stage 4 of the production is considered complete upon | 24 | | review and approval by the Department of a final rendered | 25 | | feature in QuickTime format (with watermark). The completion of | 26 | | Stage 4 includes the completion of the entire post-production |
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| 1 | | process. | 2 | | Upon the completion of Stage 4, the applicant shall submit | 3 | | to a final audit by the Department. If the Department finds | 4 | | that the actual Illinois production spending is less than the | 5 | | applicant's anticipated Illinois production spending, as set | 6 | | forth in the agreement with the Department, then the final tax | 7 | | credit award shall be reduced accordingly. ".
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