Sen. Mike Jacobs

Filed: 4/8/2011

 

 


 

 


 
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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) (blank) 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, a talk show, or a reality program.
26    "Accredited animated production" means fully animated

 

 

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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

 

 

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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) or a talk show or
14    reality program qualifying under item (5), the amount equal
15    to:
16            (i) 30% of the Illinois production spending for the
17        taxable year; plus
18            (ii) 15% of the Illinois labor expenditures
19        generated by the employment of residents of geographic
20        areas of high poverty or high unemployment, as
21        determined by the Department; .
22        (4) for an accredited animated production commencing
23    on or after January 1, 2012:
24            (i) 30% of the anticipated Illinois production
25        spending for the entire production period; plus
26            (ii) 15% of the anticipated Illinois labor

 

 

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1        expenditures generated by the employment of residents
2        of geographic areas of high poverty or high
3        unemployment, as determined by the Department, during
4        the entire production period;
5        the credits awarded for an accredited animated
6    production commencing on or after January 1, 2012 shall be
7    awarded as provided in Section 42; and
8        (5) for an accredited talk show or reality program
9    commencing its first season in Illinois on or after May 1,
10    2011, the amount equal to:
11            (i) 30% of the Illinois production spending for the
12        taxable year; plus
13            (ii) 15% of the Illinois labor expenditures
14        generated by the employment of residents of geographic
15        areas of high poverty or high unemployment, as
16        determined by the Department.
17    "Department" means the Department of Commerce and Economic
18Opportunity.
19    "Director" means the Director of Commerce and Economic
20Opportunity.
21    "Illinois labor expenditure" means salary or wages paid to
22employees of the applicant for services on the accredited
23production;
24    To qualify as an Illinois labor expenditure, the
25expenditure must be:
26        (1) Reasonable in the circumstances.

 

 

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1        (2) Included in the federal income tax basis of the
2    property.
3        (3) Incurred by the applicant for services on or after
4    January 1, 2004.
5        (4) Incurred for the production stages of the
6    accredited production, from the final script stage to the
7    end of the post-production stage.
8        (5) Limited to the first $25,000 of wages paid or
9    incurred to each employee of a production commencing before
10    May 1, 2006 and the first $100,000 of wages paid or
11    incurred to each employee of a production commencing on or
12    after May 1, 2006.
13        (6) For a production commencing before May 1, 2006,
14    exclusive of the salary or wages paid to or incurred for
15    the 2 highest paid employees of the production.
16        (7) Directly attributable to the accredited
17    production.
18        (8) Except for expenditures paid with respect to an
19    accredited animated production, paid Paid in the tax year
20    for which the applicant is claiming the credit or no later
21    than 60 days after the end of the tax year.
22        (9) Paid to persons resident in Illinois at the time
23    the payments were made.
24        (10) Paid for services rendered in Illinois.
25    "Illinois production spending" means the expenses incurred
26by the applicant for an accredited production, including,

 

 

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1without limitation, all of the following:
2        (1) expenses to purchase, from vendors within
3    Illinois, tangible personal property that is used in the
4    accredited production;
5        (2) expenses to acquire services, from vendors in
6    Illinois, for film production, editing, or processing; and
7        (3) the compensation, not to exceed $100,000 for any
8    one employee, for contractual or salaried employees who are
9    Illinois residents performing services with respect to the
10    accredited production.
11    "Qualified production facility" means stage facilities in
12the State in which television shows and films are or are
13intended to be regularly produced and that contain at least one
14sound stage of at least 15,000 square feet.
15    Rulemaking authority to implement this amendatory Act of
16the 95th General Assembly, if any, is conditioned on the rules
17being adopted in accordance with all provisions of the Illinois
18Administrative Procedure Act and all rules and procedures of
19the Joint Committee on Administrative Rules; any purported rule
20not so adopted, for whatever reason, is unauthorized.
21(Source: P.A. 95-720, eff. 5-27-08; 95-1006, eff. 12-15-08.)
 
22    (35 ILCS 16/40)
23    Sec. 40. Amount and duration of the credit. The amount of
24the credit awarded under this Act is based on the amount of the
25Illinois labor expenditure and Illinois production spending

 

 

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1approved by the Department for the production as set forth
2under Section 10. The duration of the credit may not exceed (i)
3one taxable year for productions other than accredited animated
4productions or (ii) for accredited animated productions, the
5period beginning with the taxable year in which the production
6commences and ending with the taxable year in which the final
7audit required under Section 42 is complete.
8(Source: P.A. 95-720, eff. 5-27-08.)
 
9    (35 ILCS 16/42 new)
10    Sec. 42. Accredited animated productions. Each applicant
11requesting credits for an accredited animated production
12commencing on or after January 1, 2012 must enter into an
13agreement with the Department detailing (i) the applicant's
14anticipated Illinois production spending for the entire
15production period and (ii) the anticipated Illinois labor
16expenditures generated by the employment of residents of
17geographic areas of high poverty or high unemployment. The
18accredited production certificate for an accredited animated
19production shall list those amounts. An applicant that is
20awarded a credit for an accredited animated production is
21entitled to take (i) 25% of the total credit awarded in the
22taxable year in which Stage 1 of the production is completed,
23(ii) 25% of the total credit awarded in the taxable year in
24which Stage 2 of the production is completed, (iii) 25% of the
25total credit awarded in the taxable year in which Stage 3 of

 

 

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1the production is completed, and (iv) 25% of the total credit
2awarded in the taxable year in which Stage 4 of the production
3is completed, including the final audit.
4    For the purposes of this Section:
5    Stage 1 of the production is considered complete upon
6review and approval by the Department of an animatic reel in
7QuickTime format(with watermark). "Animatic reel" means a
8timed and edited compilation of images/storyboard
9pre-visualising the final feature from first to last scene,
10including dialogue from the first pass voice recording or
11"scratch track". The completion of Stage 1 is the end of
12pre-production and includes the culmination of the following:
13        (1) conclusion of the screenplay;
14        (2) conclusion of the initial dialogue record;
15        (3) asset design (2D); and
16        (4) conclusion of the storyboard stage.
17    Stage 2 of the production is considered complete upon
18review and approval by the Department of a
19pre-visualization/blocking reel in QuickTime format (with
20watermark). "Pre-visualization/blocking reel" means a timed
21and edited compilation of rendered 3D pre-visualization from
22the first to last scene, including any and all motion capture.
23The completion of Stage 2 includes the completion of asset
24modeling and asset rigging.
25    Stage 3 of the production is considered complete upon
26review and approval by the Department of the first animation

 

 

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1pass in QuickTime format (with watermark). "First animation
2pass" means a timed and edited compilation of rendered
3animation from the first to last scene, including the second
4dialogue pass. The completion of Stage 3 means the completion
5of asset surfacing: color and texture,
6pre-visualization/motion capture, and the progress of
7animation stage.
8    Stage 4 of the production is considered complete upon
9review and approval by the Department of a final rendered
10feature in QuickTime format (with watermark). The completion of
11Stage 4 includes the completion of the entire post-production
12process.
13    Upon the completion of Stage 4, the applicant shall submit
14to a final audit by the Department. If the Department finds
15that the actual Illinois production spending is less than the
16applicant's anticipated Illinois production spending, as set
17forth in the agreement with the Department, then the final tax
18credit award shall be reduced accordingly.
 
19    Section 99. Effective date. This Act takes effect upon
20becoming law.".