Sen. Mattie Hunter

Filed: 5/26/2011

 

 


 

 


 
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1
AMENDMENT TO HOUSE BILL 1355

2    AMENDMENT NO. ______. Amend House Bill 1355 by replacing
3everything after the enacting clause with the following:
 
4    "Section 1. Short title. This Act may be cited as the Live
5Theater Production Tax Credit Act.
 
6    Section 5. Purpose. The Illinois economy depends heavily on
7the commercial for-profit live theater industry and the
8pre-Broadway and long-run shows that are presented in Illinois.
9As a result of intense competition from other prominent theater
10cities in the United States and abroad in attracting
11pre-Broadway and long-run shows, Illinois must move
12aggressively with new business development investment tools so
13that Illinois is more competitive in site location decision
14making for show producers. In an increasingly global economy,
15Illinois' long term development will benefit from the rational,
16strategic use of State resources in support of pre-Broadway

 

 

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1live theater and long run show development and growth. It is
2the purpose of this Act to preserve and expand the existing
3work force used in live theater and enhance the marketing of
4the presentation of live theater in Illinois. It shall be the
5policy of this State to promote and encourage the training and
6hiring of Illinois residents who represent the diversity of the
7Illinois population through the creation and implementation of
8training, education, and recruitment programs organized in
9cooperation with Illinois colleges and universities, labor
10organizations, and the commercial for-profit live theater
11industry.
 
12    Section 10. Definitions. As used in this Act:
13    "Accredited theater production" means a for-profit live
14stage presentation in a qualified production facility, as
15defined in this Section, that is either (i) a pre-Broadway
16production or (ii) a long-run production for which the
17aggregate Illinois labor and marketing expenditures exceed
18$100,000.
19    "Pre-Broadway production" means a live stage production
20that, in its original or adaptive version, is performed in a
21qualified production facility having a presentation scheduled
22for Broadway's Theater District in New York City within 12
23months after its Illinois presentation.
24    "Long-run production" means a live stage production that is
25performed in a qualified production facility for longer than 8

 

 

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1weeks, with at least 6 performances per week, and includes a
2production that spans the end of one tax year and the
3commencement of a new tax year that, in combination, meets the
4criteria set forth in this definition making it a long-run
5production eligible for a theater tax credit award in each tax
6year or portion thereof.
7    "Accredited theater production certificate" means a
8certificate issued by the Department certifying that the
9production is an accredited theater production that meets the
10guidelines of this Act.
11    "Applicant" means a taxpayer that is a theater producer,
12owner, licensee, operator, or presenter that is presenting or
13has presented a live stage presentation located within the
14State of Illinois who:
15        (1) owns or licenses the theatrical rights of the stage
16    presentation for the Illinois production period; or
17        (2) has contracted or will contract directly with the
18    owner or licensee of the theatrical rights or a person
19    acting on behalf of the owner or licensee to provide live
20    performances of the production.
21    An applicant that directly or indirectly owns, controls, or
22operates multiple qualified production facilities shall be
23presumed to be and considered for the purposes of this Act to
24be a single applicant; provided, however, that as to each of
25the applicant's qualified production facilities, the applicant
26shall be eligible to separately and contemporaneously (i) apply

 

 

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1for and obtain accredited theater production certificates,
2(ii) stage accredited theater productions, and (iii) apply for
3and receive a tax credit award certificate for each of
4applicant's accredited theater productions performed at each
5of the applicant's qualified production facilities.
6    "Department" means the Department of Commerce and Economic
7Opportunity.
8    "Director" means the Director of the Department.
9    "Illinois labor expenditure" means gross salary or wages
10including, but not limited to, taxes, benefits, and any other
11consideration incurred or paid to non-talent employees of the
12applicant for services rendered to and on behalf of the
13accredited theater production. To qualify as an Illinois labor
14expenditure, the expenditure must be:
15        (1) incurred or paid by the applicant on or after the
16    effective date of the Act for services related to any
17    portion of an accredited theater production from its
18    pre-production stages, including, but not limited to, the
19    writing of the script, casting, hiring of service
20    providers, purchases from vendors, marketing, advertising,
21    public relations, load in, rehearsals, performances, other
22    accredited theater production related activities, and load
23    out;
24        (2) directly attributable to the accredited theater
25    production;
26        (3) limited to the first $100,000 of wages incurred or

 

 

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1    paid to each employee of an accredited theater production
2    in each tax year;
3        (4) included in the federal income tax basis of the
4    property;
5        (5) paid in the tax year for which the applicant is
6    claiming the tax credit award, or no later than 60 days
7    after the end of the tax year;
8        (6) paid to persons residing in Illinois at the time
9    payments were made; and
10        (7) reasonable in the circumstances.
11    "Illinois production spending" means any and all expenses
12directly or indirectly incurred relating to an accredited
13theater production presented in any qualified production
14facility of the applicant, including, but not limited to,
15expenditures for:
16        (1) national marketing, public relations, and the
17    creation and placement of print, electronic, television,
18    billboard, and other forms of advertising; and
19        (2) the construction and fabrication of scenic
20    materials and elements; provided, however, that the
21    maximum amount of expenditures attributable to the
22    construction and fabrication of scenic materials and
23    elements eligible for a tax credit award shall not exceed
24    $500,000 per applicant per production in any single tax
25    year.
26    "Qualified production facility" means a facility located

 

 

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1in the State in which live theatrical productions are, or are
2intended to be, exclusively presented that contains at least
3one stage, a seating capacity of 1,200 or more seats, and
4dressing rooms, storage areas, and other ancillary amenities
5necessary for the accredited theater production.
6    "Tax credit award" means the issuance to a taxpayer by the
7Department of a tax credit award in conformance with Sections
840 and 45 of this Act.
9    "Tax year" means a calendar year for the period January 1
10to and including December 31.
 
11    Section 15. Powers of the Department. The Department, in
12addition to those powers granted under the Civil Administrative
13Code of Illinois, is granted and has all the powers necessary
14or convenient to carry out and effectuate the purposes and
15provisions of this Act, including, but not limited to, the
16power and authority to:
17        (1) adopt rules deemed necessary and appropriate for
18    the administration of the Tax Credit Award program;
19    establish forms for applications, notifications,
20    contracts, or any other agreements; and accept
21    applications at any time during the year;
22        (2) assist applicants pursuant to the provisions of
23    this Act to promote, foster, and support live theater
24    development and production and its related job creation or
25    retention within the State;

 

 

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1        (3) gather information and conduct inquiries, in the
2    manner and by the methods set forth in this Act, required
3    for the Department to comply with Section 40 and, without
4    limitation, obtain information with respect to applicants
5    for the purpose of making any designations or
6    certifications necessary or desirable to assist the
7    Department with any recommendation or guidance in the
8    furtherance of the purposes of this Act and relating to
9    applicants' participation in training, education, and
10    recruitment programs that are organized in cooperation
11    with Illinois colleges and universities or labor
12    organizations designed to promote and encourage the
13    training and hiring of Illinois residents who represent the
14    diversity of the Illinois population;
15        (4) provide for sufficient personnel to permit
16    administrative, staffing, operating, and related support
17    required to adequately discharge its duties and
18    responsibilities described in this Act from funds as may be
19    appropriated by the General Assembly for the
20    administration of this Act; and
21        (5) require that the applicant at all times keep proper
22    books and records of accounts relating to the tax credit
23    award, in accordance with generally accepted accounting
24    principles consistently applied, and make, upon reasonable
25    written request by the Department, those books and records
26    available for reasonable Department inspection and audit

 

 

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1    during the applicant's normal business hours. Any
2    documents or data made available to or received from the
3    applicant by any agent, employee, officer, or service
4    provider to the Department shall be deemed confidential and
5    shall not constitute public records to the extent that the
6    documents or data consist of commercial or financial
7    information regarding the operation by the applicant of any
8    theater or any accredited theater production, or any
9    recipient of any tax credit award under this Act.
 
10    Section 20. Tax credit award. Subject to the conditions set
11forth in this Act, an applicant is entitled to a tax credit
12award as approved by the Department for qualifying Illinois
13labor expenditures and Illinois production spending for each
14tax year in which the applicant is awarded an accredited
15theater production certificate issued by the Department.
 
16    Section 25. Application for certification of accredited
17theater production. Any applicant proposing an accredited
18theater production located or planned to be located in Illinois
19may request an accredited theater production certificate by
20application to the Department.
 
21    Section 30. Review of application for accredited theater
22production certificate.
23    (a) The Department shall issue an accredited theater

 

 

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1production certificate to an applicant if it finds that by a
2preponderance the following conditions exist:
3        (1) the applicant intends to make the expenditure in
4    the State required for certification of the accredited
5    theater production;
6        (2) the applicant's accredited theater production is
7    economically sound and will benefit the people of the State
8    of Illinois by increasing opportunities for employment and
9    will strengthen the economy of Illinois;
10        (3) the following requirements related to the
11    implementation of a diversity plan have been met: (i) the
12    applicant has filed with the Department a diversity plan
13    outlining specific goals for hiring Illinois labor
14    expenditure eligible minority persons and females, as
15    defined in the Business Enterprise for Minorities,
16    Females, and Persons with Disabilities Act, and for using
17    vendors receiving certification under the Business
18    Enterprise for Minorities, Females, and Persons with
19    Disabilities Act; (ii) the Department has approved the plan
20    as meeting the requirements established by the Department
21    and verified that the applicant has met or made good faith
22    efforts in achieving those goals; and (iii) the Department
23    has adopted any rules that are necessary to ensure
24    compliance with the provisions set forth in this paragraph
25    and necessary to require that the applicant's plan reflects
26    the diversity of the population of this State;

 

 

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1        (4) the applicant's accredited theater production
2    application indicates whether the applicant intends to
3    participate in training, education, and recruitment
4    programs that are organized in cooperation with Illinois
5    colleges and universities, labor organizations, and the
6    holders of accredited theater production certificates and
7    are designed to promote and encourage the training and
8    hiring of Illinois residents who represent the diversity of
9    Illinois;
10        (5) that, if not for the tax credit award, the
11    applicant's accredited theater production would not occur
12    in Illinois, which may be demonstrated by any means,
13    including, but not limited to, evidence that: (i) the
14    applicant, presenter, owner, or licensee of the production
15    rights has other state or international location options at
16    which to present the production and could reasonably and
17    efficiently locate outside of the State, (ii) at least one
18    other state or nation could be considered for the
19    production, (iii) the receipt of the tax award credit is a
20    major factor in the decision of the applicant, presenter,
21    production owner or licensee as to where the production
22    will be presented and that without the tax credit award the
23    applicant likely would not create or retain jobs in
24    Illinois, or (iv) receipt of the tax credit award is
25    essential to the applicant's decision to create or retain
26    new jobs in the State; and

 

 

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1        (6) the tax credit award will result in an overall
2    positive impact to the State, as determined by the
3    Department using the best available data.
4    (b) If any of the provisions in this Section conflict with
5any existing collective bargaining agreements, the terms and
6conditions of those collective bargaining agreements shall
7control.
8    (c) The Department shall act expeditiously regarding
9approval of applications for accredited theater production
10certificates so as to accommodate the pre-production work,
11booking, commencement of ticket sales, determination of
12performance dates, load in, and other matters relating to the
13live theater productions for which approval is sought.
 
14    Section 35. Training programs for skills in critical
15demand. To accomplish the purposes of this Act, the Department
16may use the training programs provided under Section 605-800 of
17the Department of Commerce and Economic Opportunity Law of the
18Civil Administrative Code of Illinois.
 
19    Section 40. Issuance of Tax Credit Award Certificate.
20    (a) In order to qualify for a tax credit award under this
21Act, an applicant must file an application for each accredited
22theater production at each of the applicant's qualified
23production facilities, on forms prescribed by the Department,
24providing information necessary to calculate the tax credit

 

 

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1award and any additional information as reasonably required by
2the Department.
3    (b) Upon satisfactory review of the application, the
4Department shall issue a tax credit award certificate stating
5the amount of the tax credit award to which the applicant is
6entitled for that tax year and shall contemporaneously notify
7the applicant and Illinois Department of Revenue in accordance
8with Section 221 of the Illinois Income Tax Act, as amended.
 
9    Section 45. Amount and payment of the tax credit award. The
10tax credit award shall be calculated each tax year based upon
11the filing by the applicant on forms prescribed by the
12Department containing information regarding qualifying and
13quantified Illinois labor expenditures, as defined in Section
1410, net of the limitation in that Section, and Illinois
15production spending, as defined in Section 10, net of the
16limitation in that Section. From the amount calculated, the
17applicant shall be entitled to receive a tax credit award of:
18        (1) 20% of the Illinois labor expenditures for each tax
19    year; plus
20        (2) 20% of the Illinois production spending for each
21    tax year; plus
22        (3) 15% of the Illinois labor expenditures generated by
23    the employment of Illinois residents in geographic areas of
24    high poverty or high unemployment in each tax year, as
25    determined by the Department.

 

 

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1    In no event shall the collective total tax credit award for
2each accredited theater production in any tax year exceed a
3maximum of $2,000,000 plus an additional maximum tax credit
4award not to exceed $500,000 for (i) Illinois labor
5expenditures attributable to the contracting for construction
6and fabrication of new and previously non-existing scenic
7materials and elements by service providers, (ii) purchases
8from Illinois vendors, or (iii) both (i) and (ii). Following
9the Department's determination of the tax credit award, the
10Department shall issue the tax credit award to the applicant.
 
11    Section 50. Live theater tax credit award program
12evaluation and reports.
13    (a) The Department's live theater tax credit award
14evaluation must include:
15        (i) an assessment of the effectiveness of the program
16    in creating and retaining new jobs in Illinois;
17        (ii) an assessment of the revenue impact of the
18    program;
19        (iii) in the discretion of the Department, a review of
20    the practices and experiences of other states or nations
21    with similar programs; and
22        (iv) an assessment of the overall success of the
23    program. The Department may make a recommendation to
24    extend, modify, or not extend the program based on the
25    evaluation.

 

 

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1    (b) At the end of each fiscal quarter, the Department shall
2submit to the General Assembly a report that includes, without
3limitation:
4        (i) an assessment of the economic impact of the
5    program, including the number of jobs created and retained,
6    and whether the job positions are entry level, management,
7    vendor, or production related;
8        (ii) the amount of accredited theater production
9    spending brought to Illinois, including the amount of
10    spending and type of Illinois vendors hired in connection
11    with an accredited theater production; and
12        (iii) a determination of whether those receiving
13    qualifying Illinois labor expenditure salaries or wages
14    reflect the geographical, racial and ethnic, gender, and
15    income level diversity of the State of Illinois.
16    (c) At the end of each fiscal year, the Department shall
17submit to the General Assembly a report that includes, without
18limitation:
19        (i) the identification of each vendor that provided
20    goods or services that were included in an accredited
21    theater production's Illinois production spending;
22        (ii) a statement of the amount paid to each identified
23    vendor by the accredited theater production and whether the
24    vendor is a minority or female owned business as defined in
25    Section 2 of the Business Enterprise for Minorities,
26    Females and Persons with Disability Act; and

 

 

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1        (iii) a description of the steps taken by the
2    Department to encourage accredited theater productions to
3    use vendors who are minority or female owned businesses.
 
4    Section 55. Program terms and conditions. Any documentary
5materials or data made available or received from an applicant
6by any agent or employee of the Department are confidential and
7are not public records to the extent that the materials or data
8consist of commercial or financial information regarding the
9operation of or the production of the applicant or recipient of
10any tax credit award under this Act.
 
11    Section 80. The Illinois Income Tax Act is amended by
12adding Section 221 as follows:
 
13    (35 ILCS 5/221 new)
14    Sec. 221. Live theater production credit.
15    (a) For tax years beginning on or after January 1, 2012, a
16taxpayer who has received a tax credit award under the Live
17Theater Production Tax Credit Act is entitled to a credit
18against the taxes imposed under subsections (a) and (b) of
19Section 201 of this Act in an amount determined under that Act
20by the Department of Commerce and Economic Opportunity.
21    (b) If the taxpayer is a partnership, limited liability
22partnership, limited liability company, or Subchapter S
23corporation, the tax credit award is allowed to the partners,

 

 

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1unit holders, or shareholders in accordance with the
2determination of income and distributive share of income under
3Sections 702 and 704 and Subchapter S of the Internal Revenue
4Code.
5    (c) A sale, assignment, or transfer of the tax credit award
6may be made by the taxpayer earning the credit within one year
7after the credit is awarded in accordance with rules adopted by
8the Department of Commerce and Economic Opportunity.
9    (d) The Department of Revenue, in cooperation with the
10Department of Commerce and Economic Opportunity, shall adopt
11rules to enforce and administer the provisions of this Section.
12    (e) This Section is exempt from the provisions of Section
13250 of this Act.
14    (f) The tax credit award may not be carried back. If the
15amount of the credit exceeds the tax liability for the year,
16the excess may be carried forward and applied to the tax
17liability of the 3 tax years following the excess credit year.
18The tax credit award shall be applied to the earliest year for
19which there is a tax liability. If there are credits from more
20than one tax year that are available to offset liability, the
21earlier credit shall be applied first. In no event may a credit
22under this Section reduce the taxpayer's liability to less than
23zero.
 
24    Section 99. Effective date. This Act takes effect upon
25becoming law.".