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
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

 

 

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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

 

 

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1feature with a pre-production and production period totaling
2more than 12 months but less than 48 months.
3    "Accredited production certificate" means a certificate
4issued by the Department certifying that the production is an
5accredited production that meets the guidelines of this Act.
6    "Applicant" means a taxpayer that is a film production
7company that is operating or has operated an accredited
8production located within the State of Illinois and that (i)
9owns the copyright in the accredited production throughout the
10Illinois production period or (ii) has contracted directly with
11the owner of the copyright in the accredited production or a
12person acting on behalf of the owner to provide services for
13the production, where the owner of the copyright is not an
14eligible 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
8Opportunity.
9    "Director" means the Director of Commerce and Economic
10Opportunity.
11    "Illinois labor expenditure" means salary or wages paid to
12employees of the applicant for services on the accredited
13production;
14    To qualify as an Illinois labor expenditure, the
15expenditure 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
16by the applicant for an accredited production, including,
17without 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
2the State in which television shows and films are or are
3intended to be regularly produced and that contain at least one
4sound stage of at least 15,000 square feet.
5    Rulemaking authority to implement this amendatory Act of
6the 95th General Assembly, if any, is conditioned on the rules
7being adopted in accordance with all provisions of the Illinois
8Administrative Procedure Act and all rules and procedures of
9the Joint Committee on Administrative Rules; any purported rule
10not 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
14the credit awarded under this Act is based on the amount of the
15Illinois labor expenditure and Illinois production spending
16approved by the Department for the production as set forth
17under Section 10. The duration of the credit may not exceed (i)
18one taxable year for productions other than accredited animated
19productions or (ii) for accredited animated productions, the
20period beginning with the taxable year in which the production
21commences and ending with the taxable year in which the final
22audit 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
2requesting credits for an accredited animated production
3commencing on or after January 1, 2010 must enter into an
4agreement with the Department detailing (i) the applicant's
5anticipated Illinois production spending for the entire
6production period and (ii) the anticipated Illinois labor
7expenditures generated by the employment of residents of
8geographic areas of high poverty or high unemployment. The
9accredited production certificate for an accredited animated
10production shall list those amounts. An applicant that is
11awarded a credit for an accredited animated production is
12entitled to take (i) 25% of the total credit awarded in the
13taxable year in which Stage 1 of the production is completed,
14(ii) 25% of the total credit awarded in the taxable year in
15which Stage 2 of the production is completed, (iii) 25% of the
16total credit awarded in the taxable year in which Stage 3 of
17the production is completed, and (iv) 25% of the total credit
18awarded in the taxable year in which Stage 4 of the production
19is completed, including the final audit. An applicant that was
20awarded a credit for an accredited animated production
21commencing on or after January 1, 2010 but prior to the
22effective date of this amendatory Act may enter into a new
23agreement with the Department for the purpose of claiming
24unused 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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1review and approval by the Department of an animatic reel in
2QuickTime format (with watermark). "Animatic reel" means a
3timed and edited compilation of images/storyboard
4pre-visualising the final feature from first to last scene,
5including dialogue from the first pass voice recording or
6"scratch track". The completion of Stage 1 is the end of
7pre-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
13review and approval by the Department of a
14pre-visualization/blocking reel in QuickTime format (with
15watermark). "Pre-visualization/blocking reel" means a timed
16and edited compilation of rendered 3D pre-visualization from
17the first to last scene, including any and all motion capture.
18The completion of Stage 2 includes the completion of asset
19modeling and asset rigging.
20    Stage 3 of the production is considered complete upon
21review and approval by the Department of the first animation
22pass in QuickTime format (with watermark). "First animation
23pass" means a timed and edited compilation of rendered
24animation from the first to last scene, including the second
25dialogue pass. The completion of Stage 3 means the completion
26of asset surfacing: color and texture,

 

 

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1pre-visualization/motion capture, and the progress of
2animation stage.
3    Stage 4 of the production is considered complete upon
4review and approval by the Department of a final rendered
5feature in QuickTime format (with watermark). The completion of
6Stage 4 includes the completion of the entire post-production
7process.
8    Upon the completion of Stage 4, the applicant shall submit
9to a final audit by the Department. If the Department finds
10that the actual Illinois production spending is less than the
11applicant's anticipated Illinois production spending, as set
12forth in the agreement with the Department, then the final tax
13credit award shall be reduced accordingly.
 
14    Section 99. Effective date. This Act takes effect upon
15becoming law.".