Senate File 2283 - Introduced
SENATE FILE
BY DOTZLER
(COMPANION TO LSB 6005HH BY
DAVITT)
Passed Senate, Date Passed House, Date
Vote: Ayes Nays Vote: Ayes Nays
Approved
A BILL FOR
1 An Act creating a film promotion program and fund, providing tax
2 credits and exemptions, and including effective and
3 retroactive applicability dates.
4 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
5 TLSB 6005SS 81
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PAG LIN
1 1 Section 1. NEW SECTION. 15.391 SHORT TITLE.
1 2 This part shall be known as the "Film Promotion Program".
1 3 Sec. 2. NEW SECTION. 15.392 PURPOSE.
1 4 The purpose of the film promotion program is to assist
1 5 legitimate film, television, and video producers in the making
1 6 of film, television, and video projects in the state and to
1 7 increase the fiscal impact on the state's economy of film,
1 8 television, and video projects produced in the state.
1 9 Sec. 3. NEW SECTION. 15.393 FILM PROMOTION PROGRAM.
1 10 1. The department shall establish and administer a film
1 11 promotion program that will provide for the registration of
1 12 projects involving films that are to be shot on location in
1 13 the state. A film project that is registered under the
1 14 program is entitled to the assistance provided in subsection
1 15 2. A fee shall not be charged for registering. The
1 16 department shall not register a film project unless the
1 17 department determines that all of the following are met:
1 18 a. The project is a legitimate effort to produce an entire
1 19 film, television, or video episode or a film, television, or
1 20 video segment in the state.
1 21 b. The film project will have an economic impact on the
1 22 economy of the state or locality sufficient to justify
1 23 assistance under the program.
1 24 c. The film project will further tourism, economic
1 25 development, and population retention or growth in the state
1 26 or locality.
1 27 d. Other criteria established by rule relating to the
1 28 economic impact and promotional aspects of the film project on
1 29 the state or locality.
1 30 2. A film project registered with the department under the
1 31 program is eligible for the following assistance:
1 32 a. (1) For tax years beginning on or after January 1,
1 33 2006, a qualified expenditure tax credit shall be allowed
1 34 against the taxes imposed in chapter 422, divisions II, III,
1 35 and V, and in chapter 432, and against the moneys and credits
2 1 tax imposed in section 533.24, for a portion of a taxpayer's
2 2 qualified expenditures in a film project registered under the
2 3 program. The tax credit shall equal twenty=five percent of
2 4 the qualified expenditures on a film project. An individual
2 5 may claim a tax credit under this paragraph "a" of a
2 6 partnership, limited liability company, S corporation, estate,
2 7 or trust electing to have income taxed directly to the
2 8 individual. The amount claimed by the individual shall be
2 9 based upon the pro rata share of the individual's earnings
2 10 from the partnership, limited liability company, S
2 11 corporation, estate, or trust. Any tax credit in excess of
2 12 the taxpayer's liability for the tax year may be credited to
2 13 the tax liability for the following five years or until
2 14 depleted, whichever is earlier. A tax credit shall not be
2 15 carried back to a tax year prior to the tax year in which the
2 16 taxpayer claims the tax credit. A tax credit shall not be
2 17 transferable to any other taxpayer.
2 18 (2) A qualified expenditure by a taxpayer is a payment to
2 19 an Iowa resident or an Iowa=based business for services
2 20 directly related to the registered film project.
2 21 b. For tax years beginning on or after January 1, 2006, an
2 22 investment tax credit shall be allowed against the taxes
2 23 imposed in chapter 422, divisions II, III, and V, and in
2 24 chapter 432, and against the moneys and credits tax imposed in
2 25 section 533.24, for a portion of a taxpayer's investment in a
2 26 film project registered under the program. The tax credit
2 27 shall equal ten percent of the investment in the film project.
2 28 An individual may claim a tax credit under this paragraph of a
2 29 partnership, limited liability company, S corporation, estate,
2 30 or trust electing to have income taxed directly to the
2 31 individual. The amount claimed by the individual shall be
2 32 based upon the pro rata share of the individual's earnings
2 33 from the partnership, limited liability company, S
2 34 corporation, estate, or trust. Any tax credit in excess of
2 35 the taxpayer's liability for the tax year may be credited to
3 1 the tax liability for the following five years or until
3 2 depleted, whichever is earlier. A tax credit shall not be
3 3 carried back to a tax year prior to the tax year in which the
3 4 taxpayer claims the tax credit. A tax credit shall not be
3 5 transferable to any other taxpayer. A taxpayer shall not
3 6 claim a tax credit under this paragraph "b" for qualified
3 7 expenditures for which a tax credit is claimed under paragraph
3 8 "a".
3 9 c. The sales and use tax exemptions provided in section
3 10 423.3, subsection 89, for purchases of tangible personal
3 11 property or services to be used for the film project in the
3 12 state.
3 13 d. A registration fee exemption for a vehicle used in the
3 14 production of a film pursuant to section 321.105.
3 15 e. A person producing a film project registered under the
3 16 program may apply to the department for purposes of being
3 17 reimbursed for film production costs charged by a local
3 18 government. Such costs include, but are not limited to, costs
3 19 for the use of public safety personnel and public equipment.
3 20 Reimbursement shall be provided from moneys in the film
3 21 promotion fund created in subsection 4.
3 22 3. The department shall promote the program and the
3 23 assistance available under the program on an internet website.
3 24 4. A film promotion fund is created in the state treasury
3 25 under the control of the department and consisting of any
3 26 moneys appropriated by the general assembly and any other
3 27 moneys available to and obtained or accepted by the department
3 28 for placement in the fund. Payments of interest, repayments
3 29 of moneys loaned pursuant to this section, and recaptures of
3 30 loans shall be deposited in the fund. The fund shall be used
3 31 to provide financial assistance under the film promotion
3 32 program. Moneys in the fund are not subject to section 8.33.
3 33 Notwithstanding section 12C.7, interest or earnings on moneys
3 34 in the fund shall be credited to the fund.
3 35 Sec. 4. Section 321.105, Code 2005, is amended by adding
4 1 the following new unnumbered paragraph:
4 2 NEW UNNUMBERED PARAGRAPH. A person whose vehicle is used
4 3 in the production of a film registered under the film
4 4 promotion program pursuant to section 15.393 is exempt from
4 5 payment of any registration fee for a period of one=hundred=
4 6 eighty days. In order to receive the film promotion program
4 7 exemption, the applicant must submit a certification issued by
4 8 the department of economic development that the vehicle was
4 9 used in a film project registered under the program.
4 10 Sec. 5. NEW SECTION. 422.11M FILM QUALIFIED EXPENDITURE
4 11 TAX CREDIT.
4 12 The taxes imposed under this division, less the credits
4 13 allowed under sections 422.12 and 422.12B, shall be reduced by
4 14 a qualified expenditure tax credit authorized pursuant to
4 15 section 15.393, subsection 2, paragraph "a".
4 16 Sec. 6. NEW SECTION. 422.11N FILM INVESTMENT TAX CREDIT.
4 17 The taxes imposed under this division, less the credits
4 18 allowed under sections 422.12 and 422.12B, shall be reduced by
4 19 an investment tax credit authorized pursuant to section
4 20 15.393, subsection 2, paragraph "b".
4 21 Sec. 7. Section 422.33, Code Supplement 2005, is amended
4 22 by adding the following new subsection:
4 23 NEW SUBSECTION. 20. The taxes imposed under this division
4 24 shall be reduced by a qualified expenditure tax credit
4 25 authorized pursuant to section 15.393, subsection 2, paragraph
4 26 "a".
4 27 Sec. 8. Section 422.33, Code Supplement 2005, is amended
4 28 by adding the following new subsection:
4 29 NEW SUBSECTION. 21. The taxes imposed under this division
4 30 shall be reduced by an investment tax credit authorized
4 31 pursuant to section 15.393, subsection 2, paragraph "b".
4 32 Sec. 9. Section 422.60, Code Supplement 2005, is amended
4 33 by adding the following new subsection:
4 34 NEW SUBSECTION. 11. The taxes imposed under this division
4 35 shall be reduced by a qualified expenditure tax credit
5 1 authorized pursuant to section 15.393, subsection 2, paragraph
5 2 "a".
5 3 Sec. 10. Section 422.60, Code Supplement 2005, is amended
5 4 by adding the following new subsection:
5 5 NEW SUBSECTION. 12. The taxes imposed under this division
5 6 shall be reduced by an investment tax credit authorized
5 7 pursuant to section 15.393, subsection 2, paragraph "b".
5 8 Sec. 11. Section 423.3, Code Supplement 2005, is amended
5 9 by adding the following new subsection:
5 10 NEW SUBSECTION. 89. The sales price of the following
5 11 tangible personal property sold or services furnished to a
5 12 film production company for the use of a film project
5 13 registered with the department of economic development
5 14 pursuant to section 15.393:
5 15 a. Vehicle rentals.
5 16 b. Camera equipment.
5 17 c. Lighting, stage, equipment, and supplies.
5 18 d. Sound equipment and supplies.
5 19 e. Recording equipment and supplies.
5 20 f. Costumes, wardrobe, and construction materials.
5 21 g. Props, scenery, and construction materials.
5 22 h. Film, digital processing, and tape.
5 23 i. Design supplies and equipment.
5 24 j. Special effects supplies and equipment.
5 25 k. Fabrication, printing, or production of scripts.
5 26 l. Storyboards.
5 27 m. Other purchases deemed unique and essential by the
5 28 department of economic development film office and identified
5 29 by rule.
5 30 Sec. 12. NEW SECTION. 432.12H FILM QUALIFIED EXPENDITURE
5 31 TAX CREDIT.
5 32 The tax imposed under this chapter shall be reduced by a
5 33 qualified expenditure tax credit authorized pursuant to
5 34 section 15.393, subsection 2, paragraph "a".
5 35 Sec. 13. NEW SECTION. 432.12I FILM INVESTMENT TAX
6 1 CREDIT.
6 2 The tax imposed under this chapter shall be reduced by an
6 3 investment tax credit authorized pursuant to section 15.393,
6 4 subsection 2, paragraph "b".
6 5 Sec. 14. Section 533.24, Code Supplement 2005, is amended
6 6 by adding the following new subsection:
6 7 NEW SUBSECTION. 8. The moneys and credits tax imposed
6 8 under this section shall be reduced by a qualified expenditure
6 9 tax credit authorized pursuant to section 15.393, subsection
6 10 2, paragraph "a".
6 11 Sec. 15. Section 533.24, Code Supplement 2005, is amended
6 12 by adding the following new subsection:
6 13 NEW SUBSECTION. 9. The moneys and credits tax imposed
6 14 under this section shall be reduced by an investment tax
6 15 credit authorized pursuant to section 15.393, subsection 2,
6 16 paragraph "b".
6 17 Sec. 16. EFFECTIVE AND RETROACTIVE APPLICABILITY DATES.
6 18 This Act, being deemed of immediate importance, takes effect
6 19 upon enactment and is retroactively applicable to January 1,
6 20 2006, for tax years beginning on and after that date.
6 21 EXPLANATION
6 22 This bill creates a film promotion program and fund,
6 23 provides for tax credits and exemptions, and includes
6 24 effective and retroactive applicability dates.
6 25 The bill requires the department of economic development to
6 26 establish and administer a film promotion program that will
6 27 provide for the registration of projects involving films that
6 28 are to be shot on location in the state. The bill prohibits
6 29 the department from registering a film project unless the
6 30 department determines that the film project is a legitimate
6 31 effort to produce an entire film, television, or video episode
6 32 or a film, television, or video segment in the state, the film
6 33 project will have an economic impact on the economy of the
6 34 state or locality sufficient to justify assistance under the
6 35 program, the film project will further tourism and population
7 1 retention or growth in the state or locality, and the film
7 2 project satisfies any other criteria established by rule by
7 3 the department. The bill creates a film promotion fund in the
7 4 state treasury under the control of the department to be used
7 5 to provide financial assistance under the film promotion
7 6 program.
7 7 The bill provides that a film project registered with the
7 8 department under the program is eligible for the following
7 9 assistance:
7 10 1. QUALIFIED EXPENDITURE TAX CREDIT. The bill allows a
7 11 qualified expenditure tax credit for 25 percent of a
7 12 taxpayer's qualified expenditures in a film project registered
7 13 under the program. The tax credit is allowed against personal
7 14 and corporate income tax liabilities, franchise tax
7 15 liabilities for financial institutions, insurance premium tax
7 16 liabilities, and credit union moneys and credits tax
7 17 liabilities. The bill provides that a qualified expenditure
7 18 is a payment to an Iowa resident or an Iowa=based business for
7 19 services directly related to the registered film project. The
7 20 bill provides that any tax credit in excess of the taxpayer's
7 21 liability for the tax year may be credited to the tax
7 22 liability for the following five years or until depleted,
7 23 whichever is earlier. The bill prohibits a tax credit from
7 24 being carried back to a tax year prior to the tax year in
7 25 which the taxpayer claims the tax credit and provides that a
7 26 tax credit shall not be transferable to any other taxpayer.
7 27 2. INVESTMENT TAX CREDIT. The bill allows an investment
7 28 tax credit for 10 percent of a taxpayer's investment in a film
7 29 project registered under the program. The tax credit is
7 30 allowed against personal and corporate income tax liabilities,
7 31 franchise tax liabilities for financial institutions,
7 32 insurance premium tax liabilities, and credit union moneys and
7 33 credits tax liabilities. The bill provides that any tax
7 34 credit in excess of the taxpayer's liability for the tax year
7 35 may be credited to the tax liability for the following five
8 1 years or until depleted, whichever is earlier. The bill
8 2 provides that a tax credit shall not be carried back to a tax
8 3 year prior to the tax year in which the taxpayer claims the
8 4 tax credit and shall not be transferable to any other
8 5 taxpayer. The bill prohibits an investment tax credit from
8 6 being claimed for qualified expenditures for which a qualified
8 7 expenditure tax credit is claimed.
8 8 3. SALES AND USE TAX EXEMPTION. The bill allows a sales
8 9 and use tax exemption for purchases of certain tangible
8 10 personal property or services to be used for the film project
8 11 in the state.
8 12 4. VEHICLE REGISTRATION FEE EXEMPTION. The bill provides
8 13 for a registration fee exemption for a vehicle used in the
8 14 production of a film.
8 15 5. LOCAL CHARGES REIMBURSEMENT. The bill allows a person
8 16 producing a film project registered under the program to apply
8 17 to the department for purposes of being reimbursed for film
8 18 production costs charged by a local government.
8 19 The bill takes effect upon enactment and is retroactively
8 20 applicable to January 1, 2006, for tax years beginning on and
8 21 after that date.
8 22 LSB 6005SS 81
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