Public Act 094-0171
 		





SB1965 Enrolled
LRB094 11475 BDD 42416 b






    AN ACT concerning revenue.

 
    Be it enacted by the People of the State of Illinois, 
represented in the General Assembly: 

 
    Section 5. The Illinois Income Tax Act is amended  by 
changing Section 213 as follows:
 



    (35 ILCS 5/213)



    Sec. 213. Film production services credit. For tax years 
beginning on or
after January 1, 2004, a taxpayer who has been 
awarded a tax credit under the
Film Production Services Tax 
Credit Act is entitled to a credit against the
taxes imposed 
under subsections (a) and (b) of Section 201 of this Act in an

amount determined by the Department of Commerce and Economic 
Opportunity
Community Affairs under the
Film Production 
Services Tax Credit Act. If the taxpayer is a partnership or

Subchapter S corporation, the credit is allowed to the partners 
or shareholders
in accordance with the determination of income 
and distributive share of income
under Sections 702 and 704 and 
Subchapter S of the Internal Revenue Code. 
    A transfer of this credit may be made by the taxpayer 
earning the credit within one year after the credit is awarded 
in accordance with rules adopted by the Department of Commerce 
and Economic Opportunity.

    The
Department, in cooperation with the Department of 
Commerce and Economic Opportunity
Community
Affairs, must 
prescribe rules to enforce and administer the provisions of 
this
Section. This Section is exempt from the provisions of 
Section 250 of this
Act.

    The credit may not be carried forward or back.  If the 
amount of the credit exceeds the tax liability for the year, 
the
excess may be carried forward and applied to the tax 
liability of the 5 taxable
years following the excess credit 
year. The credit
shall be applied to the earliest year for 
which there is a tax liability. If
there are credits from more 
than one tax year that are available to offset a
liability, the 
earlier credit shall be applied first.  In no event shall a 
credit
under this Section reduce the taxpayer's
liability to 
less than
zero.

(Source: P.A. 93-543, eff. 1-1-04; revised 12-6-03.)

 
    Section 10. The Film Production Services Tax Credit Act is 
amended  by changing Sections 10, 15, 20, 30, 45, and 90 and  by 
adding Section 43 as follows:
 



    (35 ILCS 15/10)



    (Section scheduled to be repealed on January 1, 2006)

    Sec. 10. Definitions. As used in this Act:

    "Accredited production" means a film, video, or television 
production that
has been certified by the Department in which 
the aggregate Illinois labor
expenditures
included in the cost 
of the production, in the period that ends 12 months after
the 
time principal filming or taping of the production began, 
exceed $100,000
for productions of 30 minutes or longer, or 
$50,000 for productions of less
than 30
minutes; but does not 
include a production that:


        (1) is news, current events, or public programming, or 
    a program that
includes weather or market reports;


        (2) is a talk show;


        (3) is a production in respect of a game, 
    questionnaire, or contest;


        (4) is a sports event or activity;


        (5) is a gala presentation or awards show;


        (6) is a finished production that solicits funds;


        (7) is a production produced by a film production 
    company if records, as
required
by 18
U.S.C. 2257, are to 
    be maintained by that film production company with respect

    to any
performer portrayed in that single media or 
    multimedia program; or


        (8) is a production produced primarily for industrial, 
    corporate, or
institutional purposes.

    "Accredited production certificate" means a certificate 
issued by the
Department certifying that the production is an 
accredited production that
meets the guidelines of this Act.

    "Applicant" means a taxpayer that is a film production 
company that is
operating or has operated an accredited 
production located within the State of
Illinois and that
(i) 
owns the copyright in the accredited production throughout the

Illinois production period or (ii)
has contracted directly with 
the owner of the copyright in the
accredited production
or a 
person acting on behalf of the owner
to provide services for 
the production, where the owner
of the copyright is not an 
eligible production corporation.

    "Credit" means the amount equal to 25% of the Illinois 
labor
expenditure approved by the Department.
The applicant is 
deemed to have paid, on its balance due day for the year, an

amount equal to 25% of its qualified Illinois labor expenditure 
for the tax
year. For Illinois labor expenditures generated by 
the employment of residents of geographic areas of high poverty 
or high unemployment, as determined by the Department, in an 
accredited production approved by the Department after January 
1, 2005, the applicant shall receive an enhanced credit of 10% 
in addition to the 25% credit.


    "Department" means the Department of Commerce and Economic 
Opportunity
Community Affairs.

    "Director" means the Director of Commerce and Economic 
Opportunity
Community Affairs.

    "Illinois labor expenditure" means
salary or wages paid to 
employees of the
applicant for services on the accredited

production;

    To qualify as an Illinois labor expenditure, the 
expenditure must be:


        (1) Reasonable in the circumstances.


        (2) Included in the federal income tax basis of the 
    property.


        (3) Incurred by the applicant for services on or after 
    January 1, 2004.


        (4) Incurred for the production stages of the 
    accredited production, from
the final
script stage to the 
    end of the post-production stage.


        (5) Limited to the first $25,000 of wages paid or 
    incurred to each
employee of
the production.


        (6) Exclusive of the salary or wages paid to or 
    incurred for the 2 highest
paid
employees of the 
    production.


        (7) Directly attributable to the accredited 
    production.


        (8) Paid in the tax year
for which the applicant is 
    claiming the credit
or no later than 60 days after the end 
    of the tax
year.


        (9) Paid to persons resident in Illinois at the time 
    the payments were
made.


        (10) Paid for services rendered in Illinois.

(Source: P.A. 93-543, eff. 1-1-04; revised 11-3-04.)

 



    (35 ILCS 15/15)



    (Section scheduled to be repealed on January 1, 2006)

    Sec. 15. Powers of the Department. The Department, in 
addition to those
powers granted under the Civil Administrative 
Code of Illinois, is granted and
has all the powers necessary 
or convenient to carry out and effectuate the
purposes and 
provisions of this Act, including, but not limited to, power 
and
authority to:

    (a) Adopt rules deemed necessary and appropriate for the 
administration of
the tax credit program; establish forms for 
applications, notifications,
contracts, or any other 
agreements; and accept applications at any time during
the 
year.

    (b) Assist applicants pursuant to the provisions of this 
Act
to promote, foster, and
support film production and its 
related job creation or retention within the
State.

    (c) Gather information and conduct inquiries, in the manner 
and by the
methods as it deems desirable, including any 
information required for the Department to comply with Section 
45 and, without limitation, gathering
information with respect 
to applicants for the purpose of making any
designations or 
certifications necessary or desirable or to gather information

to assist the Department with any recommendation or guidance in 
the furtherance
of the purposes of this Act, including, but not 
limited to, information as to
whether the applicant 
participated in training, education, and recruitment
programs 
that are organized in cooperation with Illinois colleges and

universities, labor organizations, and the motion picture 
industry, and are
designed to promote and encourage the 
training and hiring of Illinois residents
who represent the 
diversity of the Illinois population.

    (d) Provide for sufficient personnel to permit 
administration, staffing,
operation, and related support 
required to adequately discharge its duties and

responsibilities described in this Act from funds as may be 
appropriated by the
General Assembly for the administration of 
this Act.

    (e) Require applicants, upon written request, to issue any 
necessary
authorization to the appropriate federal, state, or 
local authority for the
release of information concerning a 
project being considered under the
provisions of this Act, with 
the information requested to include, but not be
limited to, 
financial reports, returns, or records relating to the

applicant or the accredited production.

    (f) Require that an applicant must at all times keep proper 
books of record
and account in accordance with generally 
accepted accounting principles
consistently applied, with the 
books, records, or papers related to the
accredited production 
in the custody or control of the taxpayer open for
reasonable

Department inspection and audits, and including, without 
limitation, the making
of copies of the books, records, or 
papers, and the inspection or appraisal of
any of the
assets of 
the applicant or the accredited production.

    (g) Take whatever actions are necessary or appropriate to 
protect the
State's interest in the event of bankruptcy, 
default, foreclosure, or
noncompliance with the terms and 
conditions of financial assistance or
participation required 
under this Act, including the power to sell, dispose,
lease, or 
rent, upon terms and conditions determined by the Director to 
be
appropriate, real or personal property that the Department 
may receive as a
result of these actions.

(Source: P.A. 93-543, eff. 1-1-04.)

 



    (35 ILCS 15/20)



    (Section scheduled to be repealed on January 1, 2006)

    Sec. 20. Tax credit awards. Subject to the conditions set 
forth in this
Act, an applicant is entitled to a credit as
of 
25% of the Illinois labor
expenditure approved by the 
Department under Section 40 of this Act.

(Source: P.A. 93-543, eff. 1-1-04.)

 



    (35 ILCS 15/30)


    (Section scheduled to be repealed on January 1, 2006)

    Sec. 30. Review of application for accredited production 
certificate. 

    (a) In
determining whether to issue an accredited 
production certificate,
the Department must determine that a 
preponderance of the following conditions
exist:


        (1) The applicant's production intends to make the 
    expenditure in the
State required for certification.


        (2) The applicant's production is economically sound 
    and will benefit the
people of the State of Illinois by 
    increasing opportunities for employment and
strengthen the 
    economy of Illinois.


        (3) The applicant has filed a diversity plan with the 
    Department outlining specific goals (i) for hiring 
    minority persons and females, as defined in the Business 
    Enterprise for Minorities, Females, and Persons with 
    Disabilities Act, and (ii) for using vendors receiving 
    certification under the Business Enterprise for 
    Minorities, Females, and Persons with Disabilities Act; 
    the Department has approved the plan as meeting the 
    requirements established by the Department; and the 
    Department has verified that the applicant has met or made 
    good-faith efforts in achieving those goals. The 
    Department must adopt any rules that are necessary to 
    ensure compliance with the provisions of this item (3) and 
    that are necessary to require that the applicant's plan 
    reflects the diversity of this State.
The applicant's 
    production application includes a provision setting
forth 
    the percentage of minority workers that the production 
    company plans to
employ, subject to any applicable 
    collective bargaining agreements with a labor
organization 
    to
which the applicant is a signatory,
 to perform work on 
    the production. This provision should stress the

    importance of hiring the percentage of minorities that is 
    set out in the
application.


        (4) The applicant's production application
indicates 
    whether the applicant intends to participate in training, 
    education,
and
recruitment programs that are organized in 
    cooperation with Illinois colleges
and
universities,
labor 
    organizations, and the motion picture industry and are 
    designed to
promote
and
encourage the training and hiring 
    of Illinois residents who represent the
diversity of the

    Illinois population.


        (5) That, if not for the credit, the applicant's 
    production would not
occur in
Illinois, which may be 
    demonstrated by any means including, but not limited to,

    evidence that the applicant has multi-state or 
    international location options
and could reasonably and 
    efficiently locate outside of the State, or
demonstration 
    that at least one other state or nation is being considered 
    for
the production, or evidence that the receipt of the 
    credit is a major factor in
the
applicant's decision and 
    that without the credit the applicant likely would
not 
    create or retain jobs in Illinois, or demonstration that 
    receiving the
credit is essential to the applicant's 
    decision to create or retain new jobs in
the State.


        (6) Awarding the credit will result in an overall 
    positive impact
to the State, as determined by the 
    Department using the best available
data.

    (b) If any of the provisions in this Section conflict with 
any existing
collective
bargaining agreements, the terms and 
conditions of those collective bargaining
agreements shall 
control.

(Source: P.A. 93-543, eff. 1-1-04.)

 
    (35 ILCS 15/43  new)
    Sec. 43. Training programs for skills in critical demand. 
To accomplish the purposes of this Act, the Department may use 
the training programs provided for Illinois under Section 
605-800 of the Department of Commerce and Economic Opportunity 
Law of the Civil Administrative Code of Illinois.
 



    (35 ILCS 15/45)



    (Section scheduled to be repealed on January 1, 2006)

    Sec. 45. Evaluation of tax credit program; reports to the 
General Assembly. 
    (a) The
Department shall evaluate the tax credit program. 
The evaluation must include
an assessment of the effectiveness 
of the program in creating and retaining new
jobs in Illinois 
and of the revenue impact of the program, and may include a

review of the practices and experiences of other states or 
nations with similar
programs.  Upon completion of this 
evaluation, the Department shall determine
the overall success 
of the program, and may make a recommendation to extend,

modify, or not extend the program based on this evaluation.
    (b) At the end of each fiscal quarter, the Department must 
submit to the General Assembly a report that includes, without 
limitation, the following information:
        (1) the economic impact of the tax credit program, 
    including the number of jobs created and retained, 
    including whether the job positions are entry level, 
    management, talent-related, vendor-related, or 
    production-related;
        (2) the amount of film production spending brought to 
    Illinois, including the amount of spending and type of 
    Illinois vendors hired in connection with an accredited 
    production; and
        (3) an overall picture of whether the human 
    infrastructure of the motion picture industry in Illinois 
    reflects the geographical, racial and ethnic, gender, and 
    income-level diversity of the State of Illinois.


(Source: P.A. 93-543, eff. 1-1-04.)

 



    (35 ILCS 15/90)



    (Section scheduled to be repealed on January 1, 2006)

    Sec. 90. Repeal. This Act is repealed on January 1, 2007
2 
years after its effective date.

(Source: P.A. 93-543, eff. 1-1-04; 93-840, eff. 7-30-04.)

 

    Section 99. Effective date. This Act takes effect upon 
becoming law.