Full Text of HB1355 97th General Assembly
HB1355sam001 97TH GENERAL ASSEMBLY | 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 | 3 | | everything after the enacting clause with the following:
| 4 | | "Section 1. Short title. This Act may be cited as the Live | 5 | | Theater Production Tax Credit Act. | 6 | | Section 5. Purpose. The Illinois economy depends heavily on | 7 | | the commercial for-profit live theater industry and the | 8 | | pre-Broadway and long-run shows that are presented in Illinois. | 9 | | As a result of intense competition from other prominent theater | 10 | | cities in the United States and abroad in attracting | 11 | | pre-Broadway and long-run shows, Illinois must move | 12 | | aggressively with new business development investment tools so | 13 | | that Illinois is more competitive in site location decision | 14 | | making for show producers. In an increasingly global economy, | 15 | | Illinois' long term development will benefit from the rational, | 16 | | strategic use of State resources in support of pre-Broadway |
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| 1 | | live theater and long run show development and growth. It is | 2 | | the purpose of this Act to preserve and expand the existing | 3 | | work force used in live theater and enhance the marketing of | 4 | | the presentation of live theater in Illinois. It shall be the | 5 | | policy of this State to promote and encourage the training and | 6 | | hiring of Illinois residents who represent the diversity of the | 7 | | Illinois population through the creation and implementation of | 8 | | training, education, and recruitment programs organized in | 9 | | cooperation with Illinois colleges and universities, labor | 10 | | organizations, and the commercial for-profit live theater | 11 | | industry. | 12 | | Section 10. Definitions. As used in this Act: | 13 | | "Accredited theater production" means a for-profit live | 14 | | stage presentation in a qualified production facility, as | 15 | | defined in this Section, that is either (i) a pre-Broadway | 16 | | production or (ii) a long-run production for which the | 17 | | aggregate Illinois labor and marketing expenditures exceed | 18 | | $100,000. | 19 | | "Pre-Broadway production" means a live stage production | 20 | | that, in its original or adaptive version, is performed in a | 21 | | qualified production facility having a presentation scheduled | 22 | | for Broadway's Theater District in New York City within 12 | 23 | | months after its Illinois presentation. | 24 | | "Long-run production" means a live stage production that is | 25 | | performed in a qualified production facility for longer than 8 |
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| 1 | | weeks, with at least 6 performances per week, and includes a | 2 | | production that spans the end of one tax year and the | 3 | | commencement of a new tax year that, in combination, meets the | 4 | | criteria set forth in this definition making it a long-run | 5 | | production eligible for a theater tax credit award in each tax | 6 | | year or portion thereof. | 7 | | "Accredited theater production certificate" means a | 8 | | certificate issued by the Department certifying that the | 9 | | production is an accredited theater production that meets the | 10 | | guidelines of this Act. | 11 | | "Applicant" means a taxpayer that is a theater producer, | 12 | | owner, licensee, operator, or presenter that is presenting or | 13 | | has presented a live stage presentation located within the | 14 | | State 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 | 22 | | operates multiple qualified production facilities shall be | 23 | | presumed to be and considered for the purposes of this Act to | 24 | | be a single applicant; provided, however, that as to each of | 25 | | the applicant's qualified production facilities, the applicant | 26 | | shall be eligible to separately and contemporaneously (i) apply |
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| 1 | | for and obtain accredited theater production certificates, | 2 | | (ii) stage accredited theater productions, and (iii) apply for | 3 | | and receive a tax credit award certificate for each of | 4 | | applicant's accredited theater productions performed at each | 5 | | of the applicant's qualified production facilities. | 6 | | "Department" means the Department of Commerce and Economic | 7 | | Opportunity. | 8 | | "Director" means the Director of the Department. | 9 | | "Illinois labor expenditure" means gross salary or wages | 10 | | including, but not limited to, taxes, benefits, and any other | 11 | | consideration incurred or paid to non-talent employees of the | 12 | | applicant for services rendered to and on behalf of the | 13 | | accredited theater production. To qualify as an Illinois labor | 14 | | expenditure, 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 | 12 | | directly or indirectly incurred relating to an accredited | 13 | | theater production presented in any qualified production | 14 | | facility of the applicant, including, but not limited to, | 15 | | expenditures 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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| 1 | | in the State in which live theatrical productions are, or are | 2 | | intended to be, exclusively presented that contains at least | 3 | | one stage, a seating capacity of 1,200 or more seats, and | 4 | | dressing rooms, storage areas, and other ancillary amenities | 5 | | necessary for the accredited theater production. | 6 | | "Tax credit award" means the issuance to a taxpayer by the | 7 | | Department of a tax credit award in conformance with Sections | 8 | | 40 and 45 of this Act. | 9 | | "Tax year" means a calendar year for the period January 1 | 10 | | to and including December 31. | 11 | | Section 15. Powers of the Department. The Department, in | 12 | | addition to those powers granted under the Civil Administrative | 13 | | Code of Illinois, is granted and has all the powers necessary | 14 | | or convenient to carry out and effectuate the purposes and | 15 | | provisions of this Act, including, but not limited to, the | 16 | | power 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 | 11 | | forth in this Act, an applicant is entitled to a tax credit | 12 | | award as approved by the Department for qualifying Illinois | 13 | | labor expenditures and Illinois production spending for each | 14 | | tax year in which the applicant is awarded an accredited | 15 | | theater production certificate issued by the Department. | 16 | | Section 25. Application for certification of accredited | 17 | | theater production. Any applicant proposing an accredited | 18 | | theater production located or planned to be located in Illinois | 19 | | may request an accredited theater production certificate by | 20 | | application to the Department. | 21 | | Section 30. Review of application for accredited theater | 22 | | production certificate. | 23 | | (a) The Department shall issue an accredited theater |
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| 1 | | production certificate to an applicant if it finds that by a | 2 | | preponderance 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 | 5 | | any existing collective bargaining agreements, the terms and | 6 | | conditions of those collective bargaining agreements shall | 7 | | control.
| 8 | | (c) The Department shall act expeditiously regarding | 9 | | approval of applications for accredited theater production | 10 | | certificates so as to accommodate the pre-production work, | 11 | | booking, commencement of ticket sales, determination of | 12 | | performance dates, load in, and other matters relating to the | 13 | | live theater productions for which approval is sought. | 14 | | Section 35. Training programs for skills in critical | 15 | | demand. To accomplish the purposes of this Act, the Department | 16 | | may use the training programs provided under Section 605-800 of | 17 | | the Department of Commerce and Economic Opportunity Law of the | 18 | | Civil 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 | 21 | | Act, an applicant must file an application for each accredited | 22 | | theater production at each of the applicant's qualified | 23 | | production facilities, on forms prescribed by the Department, | 24 | | providing information necessary to calculate the tax credit |
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| 1 | | award and any additional information as reasonably required by | 2 | | the Department. | 3 | | (b) Upon satisfactory review of the application, the | 4 | | Department shall issue a tax credit award certificate stating | 5 | | the amount of the tax credit award to which the applicant is | 6 | | entitled for that tax year and shall contemporaneously notify | 7 | | the applicant and Illinois Department of Revenue in accordance | 8 | | with Section 221 of the Illinois Income Tax Act, as amended. | 9 | | Section 45. Amount and payment of the tax credit award. The | 10 | | tax credit award shall be calculated each tax year based upon | 11 | | the filing by the applicant on forms prescribed by the | 12 | | Department containing information regarding qualifying and | 13 | | quantified Illinois labor expenditures, as defined in Section | 14 | | 10, net of the limitation in that Section, and Illinois | 15 | | production spending, as defined in Section 10, net of the | 16 | | limitation in that Section. From the amount calculated, the | 17 | | applicant 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 | 2 | | each accredited theater production in any tax year exceed a | 3 | | maximum of $2,000,000 plus an additional maximum tax credit | 4 | | award not to exceed $500,000 for (i) Illinois labor | 5 | | expenditures attributable to the contracting for construction | 6 | | and fabrication of new and previously non-existing scenic | 7 | | materials and elements by service providers, (ii) purchases | 8 | | from Illinois vendors, or (iii) both (i) and (ii). Following | 9 | | the Department's determination of the tax credit award, the | 10 | | Department shall issue the tax credit award to the applicant. | 11 | | Section 50. Live theater tax credit award program | 12 | | evaluation and reports. | 13 | | (a) The Department's live theater tax credit award | 14 | | evaluation 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 | 2 | | submit to the General Assembly a report that includes, without | 3 | | limitation: | 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 | 17 | | submit to the General Assembly a report that includes, without | 18 | | limitation: | 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 | 5 | | materials or data made available or received from an applicant | 6 | | by any agent or employee of the Department are confidential and | 7 | | are not public records to the extent that the materials or data | 8 | | consist of commercial or financial information regarding the | 9 | | operation of or the production of the applicant or recipient of | 10 | | any tax credit award under this Act. | 11 | | Section 80. The Illinois Income Tax Act is amended by | 12 | | adding 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 | 16 | | taxpayer who has received a tax credit award under the Live | 17 | | Theater Production Tax Credit Act is entitled to a credit | 18 | | against the taxes imposed under subsections (a) and (b) of | 19 | | Section 201 of this Act in an amount determined under that Act | 20 | | by the Department of Commerce and Economic Opportunity. | 21 | | (b) If the taxpayer is a partnership, limited liability | 22 | | partnership, limited liability company, or Subchapter S | 23 | | corporation, the tax credit award is allowed to the partners, |
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| 1 | | unit holders, or shareholders in accordance with the | 2 | | determination of income and distributive share of income under | 3 | | Sections 702 and 704 and Subchapter S of the Internal Revenue | 4 | | Code. | 5 | | (c) A sale, assignment, or transfer of the tax credit award | 6 | | may be made by the taxpayer earning the credit within one year | 7 | | after the credit is awarded in accordance with rules adopted by | 8 | | the Department of Commerce and Economic Opportunity. | 9 | | (d) The Department of Revenue, in cooperation with the | 10 | | Department of Commerce and Economic Opportunity, shall adopt | 11 | | rules to enforce and administer the provisions of this Section. | 12 | | (e) This Section is exempt from the provisions of Section | 13 | | 250 of this Act. | 14 | | (f) The tax credit award may not be carried back. If the | 15 | | amount of the credit exceeds the tax liability for the year, | 16 | | the excess may be carried forward and applied to the tax | 17 | | liability of the 3 tax years following the excess credit year. | 18 | | The tax credit award shall be applied to the earliest year for | 19 | | which there is a tax liability. If there are credits from more | 20 | | than one tax year that are available to offset liability, the | 21 | | earlier credit shall be applied first. In no event may a credit | 22 | | under this Section reduce the taxpayer's liability to less than | 23 | | zero.
| 24 | | Section 99. Effective date. This Act takes effect upon | 25 | | becoming law.".
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