Full Text of SB1286 97th General Assembly
SB1286sam002 97TH GENERAL ASSEMBLY | Sen. Mike Jacobs Filed: 4/5/2011
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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 pre-production and production period totaling | 2 | | more than 12 months but less than 48 months. | 3 | | "Accredited production certificate" means a certificate | 4 | | issued by the
Department certifying that the production is an | 5 | | accredited production that
meets the guidelines of this Act.
| 6 | | "Applicant" means a taxpayer that is a film production | 7 | | company that is
operating or has operated an accredited | 8 | | production located within the State of
Illinois and that
(i) | 9 | | owns the copyright in the accredited production throughout the
| 10 | | Illinois production period or (ii)
has contracted directly with | 11 | | the owner of the copyright in the
accredited production
or a | 12 | | person acting on behalf of the owner
to provide services for | 13 | | the production, where the owner
of the copyright is not an | 14 | | eligible production corporation.
| 15 | | "Credit" means:
| 16 | | (1) for an accredited production approved by the | 17 | | Department on or before January 1, 2005 and commencing | 18 | | before May 1, 2006, the amount equal to 25% of the Illinois | 19 | | labor
expenditure approved by the Department.
The | 20 | | applicant is deemed to have paid, on its balance due day | 21 | | for the year, an
amount equal to 25% of its qualified | 22 | | Illinois labor expenditure for the tax
year. For Illinois | 23 | | labor expenditures generated by the employment of | 24 | | residents of geographic areas of high poverty or high | 25 | | unemployment, as determined by the Department, in an | 26 | | accredited production commencing before May 1, 2006 and
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| 1 | | approved by the Department after January 1, 2005, the | 2 | | applicant shall receive an enhanced credit of 10% in | 3 | | addition to the 25% credit; and | 4 | | (2) for an accredited production commencing on or after | 5 | | May 1, 2006, the amount equal to: | 6 | | (i) 20% of the Illinois production spending for the | 7 | | taxable year; plus | 8 | | (ii) 15% of the Illinois labor expenditures | 9 | | generated by the employment of residents of geographic | 10 | | areas of high poverty or high unemployment, as | 11 | | determined by the Department; and
| 12 | | (3) for an accredited production commencing on or after | 13 | | January 1, 2009, other than an accredited animated | 14 | | production qualifying under item (4), the amount equal to: | 15 | | (i) 30% of the Illinois production spending for the | 16 | | taxable year; plus | 17 | | (ii) 15% of the Illinois labor expenditures | 18 | | generated by the employment of residents of geographic | 19 | | areas of high poverty or high unemployment, as | 20 | | determined by the Department ; and . | 21 | | (4) for an accredited animated production commencing | 22 | | on or after January 1, 2010: | 23 | | (i) 30% of the anticipated Illinois production | 24 | | spending for the entire production period; plus | 25 | | (ii) 15% of the anticipated Illinois labor | 26 | | expenditures generated by the employment of residents |
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| 1 | | of geographic areas of high poverty or high | 2 | | unemployment, as determined by the Department, during | 3 | | the entire production period. | 4 | | The credits awarded for an accredited animated | 5 | | production commencing on or after January 1, 2010 shall be | 6 | | awarded as provided in Section 42. | 7 | | "Department" means the Department of Commerce and Economic | 8 | | Opportunity.
| 9 | | "Director" means the Director of Commerce and Economic | 10 | | Opportunity.
| 11 | | "Illinois labor expenditure" means
salary or wages paid to | 12 | | employees of the
applicant for services on the accredited
| 13 | | production;
| 14 | | To qualify as an Illinois labor expenditure, the | 15 | | expenditure must be:
| 16 | | (1) Reasonable in the circumstances.
| 17 | | (2) Included in the federal income tax basis of the | 18 | | property.
| 19 | | (3) Incurred by the applicant for services on or after | 20 | | January 1, 2004.
| 21 | | (4) Incurred for the production stages of the | 22 | | accredited production, from
the final
script stage to the | 23 | | end of the post-production stage.
| 24 | | (5) Limited to the first $25,000 of wages paid or | 25 | | incurred to each
employee of a production commencing before | 26 | | May 1, 2006 and the first $100,000 of wages paid or |
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| 1 | | incurred to each
employee of
a production commencing on or | 2 | | after May 1, 2006.
| 3 | | (6) For a production commencing before May 1, 2006, | 4 | | exclusive of the salary or wages paid to or incurred for | 5 | | the 2 highest
paid
employees of the production.
| 6 | | (7) Directly attributable to the accredited | 7 | | production.
| 8 | | (8) Except for expenditures paid with respect to an | 9 | | accredited animated production, paid Paid in the tax year
| 10 | | for which the applicant is claiming the credit
or no later | 11 | | than 60 days after the end of the tax
year.
| 12 | | (9) Paid to persons resident in Illinois at the time | 13 | | the payments were
made.
| 14 | | (10) Paid for services rendered in Illinois.
| 15 | | "Illinois production spending" means the expenses incurred | 16 | | by the applicant for an accredited production, including, | 17 | | without limitation, all of the following: | 18 | | (1) expenses to purchase, from vendors within | 19 | | Illinois, tangible personal property that is used in the | 20 | | accredited production; | 21 | | (2) expenses to acquire services, from vendors in | 22 | | Illinois, for film production, editing, or processing; and | 23 | | (3) the compensation, not to exceed $100,000 for any | 24 | | one employee, for contractual or salaried employees who are | 25 | | Illinois residents performing services with respect to the | 26 | | accredited production. |
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| 1 | | "Qualified production facility" means stage facilities in | 2 | | the State in which television shows and films are or are | 3 | | intended to be regularly produced and that contain at least one | 4 | | sound stage of at least 15,000 square feet.
| 5 | | Rulemaking authority to implement this amendatory Act of | 6 | | the 95th General Assembly, if any, is conditioned on the rules | 7 | | being adopted in accordance with all provisions of the Illinois | 8 | | Administrative Procedure Act and all rules and procedures of | 9 | | the Joint Committee on Administrative Rules; any purported rule | 10 | | not so adopted, for whatever reason, is unauthorized. | 11 | | (Source: P.A. 95-720, eff. 5-27-08; 95-1006, eff. 12-15-08.) | 12 | | (35 ILCS 16/40)
| 13 | | Sec. 40. Amount and duration of the credit. The amount of | 14 | | the credit awarded under this Act is based on the amount of the | 15 | | Illinois labor expenditure and Illinois production spending | 16 | | approved by the Department for the production as set forth | 17 | | under Section 10. The duration of the credit may not exceed (i) | 18 | | one taxable year for productions other than accredited animated | 19 | | productions or (ii) for accredited animated productions, the | 20 | | period beginning with the taxable year in which the production | 21 | | commences and ending with the taxable year in which the final | 22 | | audit required under Section 42 is complete .
| 23 | | (Source: P.A. 95-720, eff. 5-27-08 .) | 24 | | (35 ILCS 16/42 new) |
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| 1 | | Sec. 42. Accredited animated productions. Each applicant | 2 | | requesting credits for an accredited animated production | 3 | | commencing on or after January 1, 2010 must enter into an | 4 | | agreement with the Department detailing (i) the applicant's | 5 | | anticipated Illinois production spending for the entire | 6 | | production period and (ii) the anticipated Illinois labor | 7 | | expenditures generated by the employment of residents of | 8 | | geographic areas of high poverty or high unemployment. The | 9 | | accredited production certificate for an accredited animated | 10 | | production shall list those amounts. An applicant that is | 11 | | awarded a credit for an accredited animated production is | 12 | | entitled to take (i) 25% of the total credit awarded in the | 13 | | taxable year in which Stage 1 of the production is completed, | 14 | | (ii) 25% of the total credit awarded in the taxable year in | 15 | | which Stage 2 of the production is completed, (iii) 25% of the | 16 | | total credit awarded in the taxable year in which Stage 3 of | 17 | | the production is completed, and (iv) 25% of the total credit | 18 | | awarded in the taxable year in which Stage 4 of the production | 19 | | is completed, including the final audit. An applicant that was | 20 | | awarded a credit for an accredited animated production | 21 | | commencing on or after January 1, 2010 but prior to the | 22 | | effective date of this amendatory Act may enter into a new | 23 | | agreement with the Department for the purpose of claiming | 24 | | unused credit amounts in the manner provided in this Section. | 25 | | For the purposes of this Section: | 26 | | Stage 1 of the production is considered complete upon |
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| 1 | | review and approval by the Department of an animatic reel in | 2 | | QuickTime format (with watermark). "Animatic reel" means a | 3 | | timed and edited compilation of images/storyboard | 4 | | pre-visualising the final feature from first to last scene, | 5 | | including dialogue from the first pass voice recording or | 6 | | "scratch track". The completion of Stage 1 is the end of | 7 | | pre-production and includes the culmination of the following: | 8 | | (1) conclusion of the screenplay; | 9 | | (2) conclusion of the initial dialogue record; | 10 | | (3) asset design (2D); and | 11 | | (4) conclusion of the storyboard stage. | 12 | | Stage 2 of the production is considered complete upon | 13 | | review and approval by the Department of a | 14 | | pre-visualization/blocking reel in QuickTime format (with | 15 | | watermark). "Pre-visualization/blocking reel" means a timed | 16 | | and edited compilation of rendered 3D pre-visualization from | 17 | | the first to last scene, including any and all motion capture. | 18 | | The completion of Stage 2 includes the completion of asset | 19 | | modeling and asset rigging. | 20 | | Stage 3 of the production is considered complete upon | 21 | | review and approval by the Department of the first animation | 22 | | pass in QuickTime format (with watermark). "First animation | 23 | | pass" means a timed and edited compilation of rendered | 24 | | animation from the first to last scene, including the second | 25 | | dialogue pass. The completion of Stage 3 means the completion | 26 | | of asset surfacing: color and texture, |
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| 1 | | pre-visualization/motion capture, and the progress of | 2 | | animation stage. | 3 | | Stage 4 of the production is considered complete upon | 4 | | review and approval by the Department of a final rendered | 5 | | feature in QuickTime format (with watermark). The completion of | 6 | | Stage 4 includes the completion of the entire post-production | 7 | | process. | 8 | | Upon the completion of Stage 4, the applicant shall submit | 9 | | to a final audit by the Department. If the Department finds | 10 | | that the actual Illinois production spending is less than the | 11 | | applicant's anticipated Illinois production spending, as set | 12 | | forth in the agreement with the Department, then the final tax | 13 | | credit award shall be reduced accordingly.
| 14 | | Section 99. Effective date. This Act takes effect upon | 15 | | becoming law.".
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