House File 892 - Enrolled

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  1  1                                       HOUSE FILE 892
  1  2
  1  3
  1  4                             AN ACT
  1  5 CREATING A FILM, TELEVISION, AND VIDEO PROJECT PROMOTION
  1  6    PROGRAM, PROVIDING TAX CREDITS AND INCOME EXCLUSIONS, AND
  1  7    INCLUDING EFFECTIVE AND RETROACTIVE APPLICABILITY DATES.
  1  8
  1  9 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
  1 10
  1 11    Section 1.  NEW SECTION.  15.391  SHORT TITLE.
  1 12    This part shall be known as the "Film, Television, and
  1 13 Video Project Promotion Program".
  1 14    Sec. 2.  NEW SECTION.  15.392  PURPOSE.
  1 15    The purpose of the film, television, and video project
  1 16 promotion program is to assist legitimate film, television,
  1 17 and video producers in the production of film, television, and
  1 18 video projects in the state and to increase the fiscal impact
  1 19 on the state's economy of film, television, and video projects
  1 20 produced in the state.  The program includes assistance in the
  1 21 production of advertising projects in a film, television, or
  1 22 video medium.
  1 23    Sec. 3.  NEW SECTION.  15.393  FILM, TELEVISION, AND VIDEO
  1 24 PROJECT PROMOTION PROGRAM == TAX CREDITS AND EXCLUSION.
  1 25    1.  The department shall establish and administer a film,
  1 26 television, and video project promotion program that provides
  1 27 for the registration of projects to be shot on location in the
  1 28 state.  A project that is registered under the program is
  1 29 entitled to the assistance provided in subsection 2.  A fee
  1 30 shall not be charged for registering.  The department shall
  1 31 not register a project unless the department determines that
  1 32 all of the following are met:
  1 33    a.  The project is a legitimate effort to produce an entire
  1 34 film, television, or video episode or a film, television, or
  1 35 video segment in the state.
  2  1    b.  The project will include expenditures of at least one
  2  2 hundred thousand dollars in the state and have an economic
  2  3 impact on the economy of the state or locality sufficient to
  2  4 justify assistance under the program.
  2  5    c.  The project will further tourism, economic development,
  2  6 and population retention or growth in the state or locality.
  2  7    d.  Other criteria established by rule relating to the
  2  8 economic impact and promotional aspects of the project on the
  2  9 state or locality.
  2 10    2.  A project registered with the department under the
  2 11 program is eligible for the following assistance:
  2 12    a.  (1)  For tax years beginning on or after January 1,
  2 13 2007, a qualified expenditure tax credit shall be allowed
  2 14 against the taxes imposed in chapter 422, divisions II, III,
  2 15 and V, and in chapter 432, and against the moneys and credits
  2 16 tax imposed in section 533.24, for a portion of a taxpayer's
  2 17 qualified expenditures in a project registered under the
  2 18 program.  The tax credit shall equal twenty=five percent of
  2 19 the qualified expenditures on a project.  An individual may
  2 20 claim a tax credit under this paragraph "a" of a partnership,
  2 21 limited liability company, S corporation, estate, or trust
  2 22 electing to have income taxed directly to the individual.  The
  2 23 amount claimed by the individual shall be based upon the pro
  2 24 rata share of the individual's earnings from the partnership,
  2 25 limited liability company, S corporation, estate, or trust.
  2 26 Any tax credit in excess of the taxpayer's liability for the
  2 27 tax year may be credited to the tax liability for the
  2 28 following five years or until depleted, whichever is earlier.
  2 29 A tax credit shall not be carried back to a tax year prior to
  2 30 the tax year in which the taxpayer claims the tax credit.
  2 31    (2)  A qualified expenditure by a taxpayer is a payment to
  2 32 an Iowa resident or an Iowa=based business for the sale,
  2 33 rental, or furnishing of tangible personal property or for
  2 34 services directly related to the registered project including
  2 35 but not limited to aircraft, vehicles, equipment, materials,
  3  1 supplies, accounting, animals and animal care, artistic and
  3  2 design services, graphics, construction, data and information
  3  3 services, delivery and pickup services, graphics, labor and
  3  4 personnel, lighting, makeup and hairdressing, film, music,
  3  5 photography, sound, video and related services, printing,
  3  6 research, site fees and rental, travel related to Iowa distant
  3  7 locations, trash removal and cleanup, and wardrobe.  For the
  3  8 purposes of this subparagraph, "labor and personnel" does not
  3  9 include the director, producers, or cast members other than
  3 10 extras and stand=ins.  The department of revenue, in
  3 11 consultation with the department of economic development,
  3 12 shall by rule establish a list of eligible expenditures.
  3 13    (3)  After verifying the eligibility for a tax credit under
  3 14 this paragraph "a", the department of economic development
  3 15 shall issue a film, television, and video project promotion
  3 16 program tax credit certificate to be attached to the person's
  3 17 tax return.  The tax credit certificate shall contain the
  3 18 taxpayer's name, address, tax identification number, the date
  3 19 of project completion, the amount of credit, other information
  3 20 required by the department of revenue, and a place for the
  3 21 name and tax identification number of a transferee and the
  3 22 amount of the tax credit being transferred.  Tax credit
  3 23 certificates issued under this paragraph "a" may be
  3 24 transferred to any person or entity.  Within ninety days of
  3 25 transfer, the transferee shall submit the transferred tax
  3 26 credit certificate to the department of revenue along with a
  3 27 statement containing the transferee's name, tax identification
  3 28 number, and address, and the denomination that each
  3 29 replacement tax credit certificate is to carry and any other
  3 30 information required by the department of revenue.  Within
  3 31 thirty days of receiving the transferred tax credit
  3 32 certificate and the transferee's statement, the department of
  3 33 revenue shall issue one or more replacement tax credit
  3 34 certificates to the transferee.  Each replacement tax credit
  3 35 certificate must contain the information required for the
  4  1 original tax credit certificate and must have the same
  4  2 expiration date that appeared in the transferred tax credit
  4  3 certificate.  Tax credit certificate amounts of less than the
  4  4 minimum amount established by rule of the department of
  4  5 economic development shall not be transferable.  A tax credit
  4  6 shall not be claimed by a transferee under this paragraph "a"
  4  7 until a replacement tax credit certificate identifying the
  4  8 transferee as the proper holder has been issued.  The
  4  9 transferee may use the amount of the tax credit transferred
  4 10 against the taxes imposed in chapter 422, divisions II, III,
  4 11 and V, and in chapter 432, and against the moneys and credits
  4 12 tax imposed in section 533.24, for any tax year the original
  4 13 transferor could have claimed the tax credit.  Any
  4 14 consideration received for the transfer of the tax credit
  4 15 shall not be included as income under chapter 422, divisions
  4 16 II, III, and V, under chapter 432, or against the moneys and
  4 17 credits tax imposed in section 533.24.  Any consideration paid
  4 18 for the transfer of the tax credit shall not be deducted from
  4 19 income under chapter 422, divisions II, III, and V, under
  4 20 chapter 432, or against the moneys and credits tax imposed in
  4 21 section 533.24.
  4 22    (4)  A taxpayer claiming a tax credit under this paragraph
  4 23 "a", a business in which such taxpayer has an equity interest,
  4 24 and a business in which such taxpayer participates in its
  4 25 management is not eligible to receive the adjusted gross
  4 26 income reduction under paragraph "c".
  4 27    b.  (1)  For tax years beginning on or after January 1,
  4 28 2007, an investment tax credit shall be allowed against the
  4 29 taxes imposed in chapter 422, divisions II, III, and V, and in
  4 30 chapter 432, and against the moneys and credits tax imposed in
  4 31 section 533.24, for a portion of a taxpayer's investment in a
  4 32 project registered under the program.  The tax credit shall
  4 33 equal twenty=five percent of the investment in the project.
  4 34 An individual may claim a tax credit under this paragraph of a
  4 35 partnership, limited liability company, S corporation, estate,
  5  1 or trust electing to have income taxed directly to the
  5  2 individual.  The amount claimed by the individual shall be
  5  3 based upon the pro rata share of the individual's earnings
  5  4 from the partnership, limited liability company, S
  5  5 corporation, estate, or trust.  Any tax credit in excess of
  5  6 the taxpayer's liability for the tax year may be credited to
  5  7 the tax liability for the following five years or until
  5  8 depleted, whichever is earlier.  A tax credit shall not be
  5  9 carried back to a tax year prior to the tax year in which the
  5 10 taxpayer claims the tax credit.  A taxpayer shall not claim a
  5 11 tax credit under this paragraph "b" for qualified expenditures
  5 12 for which a tax credit is claimed under paragraph "a".
  5 13    (2)  After verifying the eligibility for a tax credit under
  5 14 this paragraph "b", the department of economic development
  5 15 shall issue a film, television, and video project promotion
  5 16 program tax credit certificate to be attached to the person's
  5 17 tax return.  The tax credit certificate shall contain the
  5 18 taxpayer's name, address, tax identification number, the date
  5 19 of project completion, the amount of credit, other information
  5 20 required by the department of revenue, and a place for the
  5 21 name and tax identification number of a transferee and the
  5 22 amount of the tax credit being transferred.  Tax credit
  5 23 certificates issued under this paragraph "b" may be
  5 24 transferred to any person or entity.  Within ninety days of
  5 25 transfer, the transferee shall submit the transferred tax
  5 26 credit certificate to the department of revenue along with a
  5 27 statement containing the transferee's name, tax identification
  5 28 number, and address, and the denomination that each
  5 29 replacement tax credit certificate is to carry and any other
  5 30 information required by the department of revenue.  Within
  5 31 thirty days of receiving the transferred tax credit
  5 32 certificate and the transferee's statement, the department of
  5 33 revenue shall issue one or more replacement tax credit
  5 34 certificates to the transferee.  Each replacement tax credit
  5 35 certificate must contain the information required for the
  6  1 original tax credit certificate and must have the same
  6  2 expiration date that appeared in the transferred tax credit
  6  3 certificate.  Tax credit certificate amounts of less than the
  6  4 minimum amount established by rule of the department of
  6  5 economic development shall not be transferable.  A tax credit
  6  6 shall not be claimed by a transferee under this paragraph "b"
  6  7 until a replacement tax credit certificate identifying the
  6  8 transferee as the proper holder has been issued.  The
  6  9 transferee may use the amount of the tax credit transferred
  6 10 against the taxes imposed in chapter 422, divisions II, III,
  6 11 and V, and in chapter 432, and against the moneys and credits
  6 12 tax imposed in section 533.24, for any tax year the original
  6 13 transferor could have claimed the tax credit.  Any
  6 14 consideration received for the transfer of the tax credit
  6 15 shall not be included as income under chapter 422, divisions
  6 16 II, III, and V, under chapter 432, or against the moneys and
  6 17 credits tax imposed in section 533.24.  Any consideration paid
  6 18 for the transfer of the tax credit shall not be deducted from
  6 19 income under chapter 422, divisions II, III, and V, under
  6 20 chapter 432, or against the moneys and credits tax imposed in
  6 21 section 533.24.
  6 22    c.  For tax years beginning on or after January 1, 2007, a
  6 23 reduction in adjusted gross income for purposes of taxes
  6 24 imposed in chapter 422, divisions II and III, for payments
  6 25 received from the sale, rental, or furnishing of tangible
  6 26 personal property or services directly related to the
  6 27 production of a project registered under this section which
  6 28 meets the criteria of a qualified expenditure under paragraph
  6 29 "a", subparagraph (2).
  6 30    3.  The department shall promote the program and the
  6 31 assistance available under the program on an internet website.
  6 32    4.  A project that depicts or describes any obscene
  6 33 material, as defined in section 728.1, shall not be eligible
  6 34 to receive assistance under this section.
  6 35    Sec. 4.  Section 422.7, Code 2007, is amended by adding the
  7  1 following new subsection:
  7  2    NEW SUBSECTION.  50.  Subtract, to the extent included, an
  7  3 amount equal to any income received from the sale, rental, or
  7  4 furnishing of tangible personal property or services directly
  7  5 related to the production of a project registered under
  7  6 section 15.393 which meets the criteria of a qualified
  7  7 expenditure under section 15.393, subsection 2, paragraph "a",
  7  8 subparagraph (2).
  7  9    Sec. 5.  NEW SECTION.  422.11T  FILM QUALIFIED EXPENDITURE
  7 10 TAX CREDIT.
  7 11    The taxes imposed under this division, less the credits
  7 12 allowed under sections 422.12 and 422.12B, shall be reduced by
  7 13 a qualified expenditure tax credit authorized pursuant to
  7 14 section 15.393, subsection 2, paragraph "a".
  7 15    Sec. 6.  NEW SECTION.  422.11U  FILM INVESTMENT TAX CREDIT.
  7 16    The taxes imposed under this division, less the credits
  7 17 allowed under sections 422.12 and 422.12B, shall be reduced by
  7 18 an investment tax credit authorized pursuant to section
  7 19 15.393, subsection 2, paragraph "b".
  7 20    Sec. 7.  Section 422.33, Code 2007, is amended by adding
  7 21 the following new subsections:
  7 22    NEW SUBSECTION.  24.  The taxes imposed under this division
  7 23 shall be reduced by a qualified expenditure tax credit
  7 24 authorized pursuant to section 15.393, subsection 2, paragraph
  7 25 "a".
  7 26    NEW SUBSECTION.  25.  The taxes imposed under this division
  7 27 shall be reduced by an investment tax credit authorized
  7 28 pursuant to section 15.393, subsection 2, paragraph "b".
  7 29    Sec. 8.  Section 422.35, Code 2007, is amended by adding
  7 30 the following new subsection:
  7 31    NEW SUBSECTION.  23.  Subtract, to the extent included, an
  7 32 amount equal to any income received from the sale, rental, or
  7 33 furnishing of tangible personal property or services directly
  7 34 related to the production of a project registered under
  7 35 section 15.393 which meets the criteria of a qualified
  8  1 expenditure under section 15.393, subsection 2, paragraph "a",
  8  2 subparagraph (2).
  8  3    Sec. 9.  Section 422.60, Code 2007, is amended by adding
  8  4 the following new subsections:
  8  5    NEW SUBSECTION.  13.  The taxes imposed under this division
  8  6 shall be reduced by a qualified expenditure tax credit
  8  7 authorized pursuant to section 15.393, subsection 2, paragraph
  8  8 "a".
  8  9    NEW SUBSECTION.  14.  The taxes imposed under this division
  8 10 shall be reduced by an investment tax credit authorized
  8 11 pursuant to section 15.393, subsection 2, paragraph "b".
  8 12    Sec. 10.  NEW SECTION.  432.12J  FILM QUALIFIED EXPENDITURE
  8 13 TAX CREDIT.
  8 14    The tax imposed under this chapter shall be reduced by a
  8 15 qualified expenditure tax credit authorized pursuant to
  8 16 section 15.393, subsection 2, paragraph "a".
  8 17    Sec. 11.  NEW SECTION.  432.12K  FILM INVESTMENT TAX
  8 18 CREDIT.
  8 19    The tax imposed under this chapter shall be reduced by an
  8 20 investment tax credit authorized pursuant to section 15.393,
  8 21 subsection 2, paragraph "b".
  8 22    Sec. 12.  Section 533.24, Code 2007, is amended by adding
  8 23 the following new subsections:
  8 24    NEW SUBSECTION.  11.  The moneys and credits tax imposed
  8 25 under this section shall be reduced by a qualified expenditure
  8 26 tax credit authorized pursuant to section 15.393, subsection
  8 27 2, paragraph "a".
  8 28    NEW SUBSECTION.  12.  The moneys and credits tax imposed
  8 29 under this section shall be reduced by an investment tax
  8 30 credit authorized pursuant to section 15.393, subsection 2,
  8 31 paragraph "b".
  8 32    Sec. 13.  EFFECTIVE AND RETROACTIVE APPLICABILITY DATES.
  8 33 This Act, being deemed of immediate importance, takes effect
  8 34 upon enactment and is retroactively applicable to January 1,
  8 35 2007, for tax years beginning on and after that date.
  9  1
  9  2
  9  3                                                             
  9  4                               PATRICK J. MURPHY
  9  5                               Speaker of the House
  9  6
  9  7
  9  8                                                             
  9  9                               JOHN P. KIBBIE
  9 10                               President of the Senate
  9 11
  9 12    I hereby certify that this bill originated in the House and
  9 13 is known as House File 892, Eighty=second General Assembly.
  9 14
  9 15
  9 16                                                             
  9 17                               MARK BRANDSGARD
  9 18                               Chief Clerk of the House
  9 19 Approved                , 2007
  9 20
  9 21
  9 22                            
  9 23 CHESTER J. CULVER
  9 24 Governor