Sen. Mike Jacobs

Filed: 3/30/2011

 

 


 

 


 
09700SB1286sam001LRB097 08202 HLH 53697 a

1
AMENDMENT TO SENATE BILL 1286

2    AMENDMENT NO. ______. Amend Senate Bill 1286 by replacing
3everything after the enacting clause with the following:
 
4    "Section 5. The Film Production Services Tax Credit Act of
52008 is amended by changing Sections 10 and 40 and by adding
6Section 42 as follows:
 
7    (35 ILCS 16/10)
8    Sec. 10. Definitions. As used in this Act:
9    "Accredited production" means: (i) for productions
10commencing before May 1, 2006, a film, video, or television
11production that has been certified by the Department in which
12the aggregate Illinois labor expenditures included in the cost
13of the production, in the period that ends 12 months after the
14time principal filming or taping of the production began,
15exceed $100,000 for productions of 30 minutes or longer, or
16$50,000 for productions of less than 30 minutes; and (ii) for

 

 

09700SB1286sam001- 2 -LRB097 08202 HLH 53697 a

1productions commencing on or after May 1, 2006, a film, video,
2or television production that has been certified by the
3Department in which the Illinois production spending included
4in the cost of production in the period that ends 12 months
5after the time principal filming or taping of the production
6began exceeds $100,000 for productions of 30 minutes or longer
7or 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
25production.
26    "Accredited animated production" means fully animated

 

 

09700SB1286sam001- 3 -LRB097 08202 HLH 53697 a

1feature with a total production period of more than 12 months.
2    "Accredited production certificate" means a certificate
3issued by the Department certifying that the production is an
4accredited production that meets the guidelines of this Act.
5    "Applicant" means a taxpayer that is a film production
6company that is operating or has operated an accredited
7production located within the State of Illinois and that (i)
8owns the copyright in the accredited production throughout the
9Illinois production period or (ii) has contracted directly with
10the owner of the copyright in the accredited production or a
11person acting on behalf of the owner to provide services for
12the production, where the owner of the copyright is not an
13eligible 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

 

 

09700SB1286sam001- 4 -LRB097 08202 HLH 53697 a

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

 

 

09700SB1286sam001- 5 -LRB097 08202 HLH 53697 a

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
7Opportunity.
8    "Director" means the Director of Commerce and Economic
9Opportunity.
10    "Illinois labor expenditure" means salary or wages paid to
11employees of the applicant for services on the accredited
12production;
13    To qualify as an Illinois labor expenditure, the
14expenditure 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

 

 

09700SB1286sam001- 6 -LRB097 08202 HLH 53697 a

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
15by the applicant for an accredited production, including,
16without 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

 

 

09700SB1286sam001- 7 -LRB097 08202 HLH 53697 a

1the State in which television shows and films are or are
2intended to be regularly produced and that contain at least one
3sound stage of at least 15,000 square feet.
4    Rulemaking authority to implement this amendatory Act of
5the 95th General Assembly, if any, is conditioned on the rules
6being adopted in accordance with all provisions of the Illinois
7Administrative Procedure Act and all rules and procedures of
8the Joint Committee on Administrative Rules; any purported rule
9not 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
13the credit awarded under this Act is based on the amount of the
14Illinois labor expenditure and Illinois production spending
15approved by the Department for the production as set forth
16under Section 10. The duration of the credit may not exceed (i)
17one taxable year for productions other than accredited animated
18productions or (ii) for accredited animated productions, the
19period beginning with the taxable year in which the production
20commences and ending with the taxable year in which the final
21audit 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

 

 

09700SB1286sam001- 8 -LRB097 08202 HLH 53697 a

1requesting credits for an accredited animated production
2commencing on or after January 1, 2012 must enter into an
3agreement with the Department detailing (i) the applicant's
4anticipated Illinois production spending for the entire
5production period and (ii) the anticipated Illinois labor
6expenditures generated by the employment of residents of
7geographic areas of high poverty or high unemployment. The
8accredited production certificate for an accredited animated
9production shall list those amounts. An applicant that is
10awarded a credit for an accredited animated production is
11entitled to take (i) 25% of the total credit awarded in the
12taxable year in which Stage 1 of the production is completed,
13(ii) 25% of the total credit awarded in the taxable year in
14which Stage 2 of the production is completed, (iii) 25% of the
15total credit awarded in the taxable year in which Stage 3 of
16the production is completed, and (iv) 25% of the total credit
17awarded in the taxable year in which Stage 4 of the production
18is completed, including the final audit.
19    For the purposes of this Section:
20    Stage 1 of the production is considered complete upon
21review and approval by the Department of an animatic reel in
22QuickTime format(with watermark). "Animatic reel" means a
23timed and edited compilation of images/storyboard
24pre-visualising the final feature from first to last scene,
25including dialogue from the first pass voice recording or
26"scratch track". The completion of Stage 1 is the end of

 

 

09700SB1286sam001- 9 -LRB097 08202 HLH 53697 a

1pre-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
7review and approval by the Department of a
8pre-visualization/blocking reel in QuickTime format (with
9watermark). "Pre-visualization/blocking reel" means a timed
10and edited compilation of rendered 3D pre-visualization from
11the first to last scene, including any and all motion capture.
12The completion of Stage 2 includes the completion of asset
13modeling and asset rigging.
14    Stage 3 of the production is considered complete upon
15review and approval by the Department of the first animation
16pass in QuickTime format (with watermark). "First animation
17pass" means a timed and edited compilation of rendered
18animation from the first to last scene, including the second
19dialogue pass. The completion of Stage 3 means the completion
20of asset surfacing: color and texture,
21pre-visualization/motion capture, and the progress of
22animation stage.
23    Stage 4 of the production is considered complete upon
24review and approval by the Department of a final rendered
25feature in QuickTime format (with watermark). The completion of
26Stage 4 includes the completion of the entire post-production

 

 

09700SB1286sam001- 10 -LRB097 08202 HLH 53697 a

1process.
2    Upon the completion of Stage 4, the applicant shall submit
3to a final audit by the Department. If the Department finds
4that the actual Illinois production spending is less than the
5applicant's anticipated Illinois production spending, as set
6forth in the agreement with the Department, then the final tax
7credit award shall be reduced accordingly.".