AL
Alabama House Bill HB326

Alabama 2024 Regular Session

Alabama House Bill HB326 Compare Versions

Only one version of the bill is available at this time.
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33 HB326
44 2HFHSKS-1
55 By Representative Kiel
66 RFD: Ways and Means Education
77 First Read: 19-Mar-24
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1212 5 2HFHSKS-1 03/19/2024 KHF (F)KHF 2024-1188
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1414 First Read: 19-Mar-24
1515 SYNOPSIS:
1616 Under existing law, certain state rebates and
1717 sales, use, and lodging tax exemptions are provided for
1818 qualified production companies in the entertainment
1919 industry working in efforts to attract the
2020 entertainment industry to Alabama.
2121 This bill would amend the Entertainment Industry
2222 Incentive Act of 2009 to rename the Alabama Film Office
2323 as the Alabama Entertainment Office, allow music albums
2424 to be included as qualified production, set the minimum
2525 expenditure threshold for music albums to qualify for
2626 incentives, and set aside incentives for music albums
2727 until July 1 of each year.
2828 A BILL
2929 TO BE ENTITLED
3030 AN ACT
3131 Relating to the Entertainment Industry Incentive Act of
3232 2009; to amend Sections 41-7A-1, 41-7A-2, 41-7A-42, 41-7A-43,
3333 and 41-7A-48, Code of Alabama 1975, to rename the Alabama Film
3434 Office as the Alabama Entertainment Office; to include music
3535 albums as a qualified production; to set minimum expenditure
3636 limits for music albums to qualify for incentives; and to set
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6666 limits for music albums to qualify for incentives; and to set
6767 aside a portion of the incentives annually for music albums
6868 until July 1 of each year.
6969 BE IT ENACTED BY THE LEGISLATURE OF ALABAMA:
7070 Section 1. Sections 41-7A-1, 41-7A-2, 41-7A-42,
7171 41-7A-43, and 41-7A-48, Code of Alabama 1975, are amended to
7272 read as follows:
7373 "§41-7A-1
7474 On September 1, 1995, the management of the Alabama
7575 Entertainment Film Office shall be vested in a director who
7676 shall be appointed by the Governor and shall serve at his or
7777 her pleasure. The salary shall be established by the Governor
7878 at an amount not to exceed forty-eight thousand dollars
7979 ($48,000) annually and adjusted thereafter consistent with
8080 general cost-of-living adjustments approved for state
8181 employees. In fixing the salary, the Governor shall give due
8282 consideration to the salaries of comparable positions in other
8383 states in the southeast. The director shall have the same
8484 rights, privileges, benefits, and membership status in the
8585 Employees' Retirement System as other unclassified employees
8686 in the state service."
8787 "§41-7A-2
8888 All other employees necessary to carry out the duties
8989 and functions of the Alabama Entertainment Film Office shall
9090 be employed subject to the provisions of the Merit System law.
9191 The State Personnel Board, with the assistance of the Director
9292 of the Alabama Development Office, shall establish positions
9393 as needed in the classified service for the employees of the
9494 Alabama Entertainment Film Office."
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124124 Alabama Entertainment Film Office."
125125 "§41-7A-42
126126 For purposes of this article, the following terms shall
127127 have the following meanings:
128128 (1) COMPANY. A corporation, partnership, limited
129129 liability company, or any other business entity.
130130 (2) DEPARTMENT. The Alabama Department of Revenue.
131131 (3) ENTERTAINMENT INDUSTRY. Those persons or entities
132132 engaged in the production of entertainment content as defined
133133 under paragraph a. of subdivision (8) a.
134134 (4) EXPENDED IN ALABAMA. In the case of tangible
135135 property, property which is acquired or leased from a source
136136 within the State of Alabama; in the case of services, services
137137 performed for a qualified production project in the State of
138138 Alabama.
139139 (5) OFFICE. The Alabama Entertainment Film Office.
140140 (6) PAYROLL. All salary, wages, and other compensation,
141141 including related benefits, including specifically, but not
142142 limited to, compensation and benefits provided to resident and
143143 nonresident producers, directors, writers, actors, and other
144144 personnel involved in qualified production projects in
145145 Alabama.
146146 (7) PRODUCTION EXPENDITURES.
147147 a. The term includes preproduction, production, and
148148 postproduction expenditures incurred in the State of Alabama
149149 that are directly used in a state-certified production,
150150 including, but not limited to, the following: Set construction
151151 and operation, wardrobe, makeup, set accessories, and related
152152 services; costs associated with photography and sound
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182182 services; costs associated with photography and sound
183183 synchronization, lighting, and related services and materials;
184184 editing and related services; rental of facilities and
185185 equipment; leasing of vehicles; costs of food and lodging;
186186 costs of catering; digital or tape editing, film processing,
187187 transfer of film to tape or digital format; transfer direct to
188188 DVD, cable, or satellite for distribution; sound mixing,
189189 special and visual effects including duplication, film
190190 processing digital, DVD, music composition, and satellite
191191 distribution; total aggregate payroll; music; airfare;
192192 insurance costs of bonding; or other similar production
193193 expenditures as determined by rule or regulation.
194194 b. The term includes financial contributions or
195195 educational or workforce development in partnership with
196196 related educational institutions, or local industry
197197 organizations, or both, contributed toward the furtherance of
198198 the local entertainment media industries.
199199 c. The term does not include postproduction
200200 expenditures for marketing or any amounts that are paid to
201201 persons or entities as a result of their participation in
202202 profits from the exploitation of a motion picture production.
203203 (8) QUALIFIED PRODUCTION.
204204 a. The term means entertainment content created in
205205 whole or in part within the state, including motion pictures;
206206 soundtracks for motion pictures; documentaries; long-form,
207207 specials, miniseries, series, sound recordings, music albums,
208208 videos and music videos, and interstitials television
209209 programming; interactive television; interactive games; video
210210 games; commercials; infomercials; any format of digital media,
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240240 games; commercials; infomercials; any format of digital media,
241241 including an interactive website that is intended for national
242242 or international distribution or exhibition to the general
243243 public; and any trailer, pilot, video teaser, or demo created
244244 primarily to stimulate the sale, marketing, promotion, or
245245 exploitation of future investment in either a product or a
246246 qualified production via any means and media in any digital
247247 media format, film, or videotape, provided such program meets
248248 all the underlying criteria of a qualified production.
249249 b. The term does not include any ongoing television
250250 program created primarily as news, weather, or financial
251251 market reports, a production featuring current events,
252252 sporting events, an awards show or other gala event, a
253253 production whose sole purpose is fund-raising, a long-form
254254 production that primarily markets a product or service, a
255255 production used for corporate training or in-house corporate
256256 advertising or other similar productions; nor does the term
257257 include any production for which records are required to be
258258 maintained under 18 U.S.C. § 2257 with respect to sexually
259259 explicit content; nor does the term mean or include any form
260260 of gambling, gaming, wagering, or pari-mutuel wagering
261261 activity or enterprise.
262262 (9) QUALIFIED PRODUCTION COMPANY.
263263 a. The term means a company engaged in the business of
264264 producing a qualified production, as that term is defined.
265265 b. The term does not mean or include any company owned,
266266 affiliated, or controlled, in whole or in part, by any company
267267 or person which is in default on a loan.
268268 (10) RESIDENT OF ALABAMA. A natural person and, for the
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298298 (10) RESIDENT OF ALABAMA. A natural person and, for the
299299 purpose of determining eligibility for the incentives provided
300300 by this article, any person domiciled in the State of Alabama
301301 and any other person who maintains a permanent place of abode
302302 within the state and spends in the aggregate more than six
303303 months of each year within the State of Alabama.
304304 (11) STATE-CERTIFIED PRODUCTION. A qualified production
305305 approved by the office, produced by a qualified production
306306 company."
307307 "§41-7A-43
308308 (a) Beginning January 1, 2009, a qualified production
309309 company shall be entitled to a rebate for production
310310 expenditures, as defined in subdivision (7) of Section
311311 41-7A-42(7), related to a state-certified production. The
312312 rebate shall be equal to 25 percent of the state-certified
313313 production's production expenditures excluding payroll paid to
314314 residents of Alabama plus 35 percent of all payroll paid to
315315 residents of Alabama for the state-certified production,
316316 provided the total production expenditures for a project must
317317 equal or exceed at least five hundred thousand dollars
318318 ($500,000), but no rebate shall be available for production
319319 expenditures incurred after the first twenty million dollars
320320 ($20,000,000) of production expenditures expended in Alabama
321321 on a state-certified production.
322322 (b) A single episode in a television series or
323323 miniseries may be considered a single production project for
324324 purposes of this section. However, in determining the total
325325 production expenditures incurred by a qualified production
326326 company on a qualified production, the total production
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356356 company on a qualified production, the total production
357357 expenditures of a television series or miniseries, whether a
358358 single season or multiple seasons thereof, to be filmed within
359359 a period of 12 consecutive months, each individual episode of
360360 which separately and independently meets the definition of a
361361 qualified production, may be aggregated to meet the monetary
362362 requirements set forth in subsection (a) as long as each
363363 individual episode within the series pertains to the same
364364 subject as the other episodes in the series.
365365 (c) A single commercial may be considered a single
366366 production project for purposes of this section. However, in
367367 determining the total production expenditures incurred by a
368368 qualified production company on a qualified production, the
369369 total production expenditures of a series of commercials to be
370370 filmed within a period of 12 consecutive months, each of which
371371 separately and independently meets the definition of a
372372 qualified production, may be aggregated to meet the monetary
373373 requirements set forth in subsection (a) as long as each
374374 individual commercial within the series pertains to the same
375375 subject as the other commercials in the series and was planned
376376 as part of a series of commercials to be filmed within a
377377 period of 12 consecutive months at the time the qualified
378378 production company applied for the incentives.
379379 (d) A qualified production company shall be entitled to
380380 the rebate for production expenditures as provided in
381381 subsection (a) for a qualified project that is limited only to
382382 the production of a soundtrack used in a motion picture or
383383 documentary, provided that the production expenditures for the
384384 soundtrack project must equal or exceed at least fifty
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414414 soundtrack project must equal or exceed at least fifty
415415 thousand dollars ($50,000), but no rebate shall be available
416416 for production expenditures incurred after the first three
417417 hundred thousand dollars ($300,000) of production expenditures
418418 expended in Alabama.
419419 (e) A qualified production company shall be entitled to
420420 the rebate for production expenditures as provided in
421421 subsection (a) for a qualified project that is limited only to
422422 the production of a music video, provided that the production
423423 expenditures for the music video equal or exceed fifty
424424 thousand dollars ($50,000), but no rebate shall be available
425425 for production expenditures incurred after the first two
426426 hundred thousand dollars ($200,000) of production expenditures
427427 expended in Alabama.
428428 (f) A qualified production company shall be entitled to
429429 the rebate for production expenditures as provided in
430430 subsection (a) for a qualified project that is limited only to
431431 the production of a music album, provided that the production
432432 expenditures for the music album equal or exceed thirty
433433 thousand dollars ($30,000), but no rebate shall be available
434434 for production expenditures incurred after the first two
435435 hundred thousand dollars ($200,000) of production expenditures
436436 expended in Alabama.
437437 (f)(g) The rebate described in this section may be
438438 applied to offset any income tax liability applicable to a
439439 qualified production company for the tax year in which
440440 production activity in Alabama on the state-certified
441441 production concludes.
442442 (g)(h) If the rebate available under this section
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472472 (g)(h) If the rebate available under this section
473473 exceeds a qualified production company's Alabama income tax
474474 liability for the tax year in which production activity in
475475 Alabama concludes on the state-certified production, the
476476 excess of the rebate over a qualified production company's
477477 Alabama income tax liability shall be rebated to the qualified
478478 production company.
479479 (h)(i) The Commissioner of the Department of Revenue
480480 and the office shall promulgate adopt rules necessary to
481481 administer this section."
482482 "§41-7A-48
483483 (a) For the fiscal year ending September 30, 2009, the
484484 aggregate cap of incentives granted under this article shall
485485 not exceed five million dollars ($5,000,000) for all qualified
486486 production companies. For the fiscal year ending September 30,
487487 2010, the aggregate cap of incentives granted under this
488488 article shall not exceed seven million five hundred thousand
489489 dollars ($7,500,000) for all qualified production companies.
490490 For fiscal years ending September 30, 2011, and September 30,
491491 2012, the aggregate cap of incentives granted under this
492492 article shall not exceed ten million dollars ($10,000,000) for
493493 all qualified production companies. For the fiscal year ending
494494 September 30, 2013, the aggregate cap of incentives granted
495495 under this article shall not exceed fifteen million dollars
496496 ($15,000,000). For the fiscal year ending September 30, 2014,
497497 the aggregate cap of incentives granted under this article
498498 shall not exceed fifteen million dollars ($15,000,000) and for
499499 all subsequent fiscal years thereafter, the aggregate cap of
500500 incentives granted under this article shall not exceed twenty
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530530 incentives granted under this article shall not exceed twenty
531531 million dollars ($20,000,000) for all qualified production
532532 companies.
533533 (b) For each fiscal year beginning October 1, 2024, two
534534 million dollars ($2,000,000) of the amounts in subsection (a)
535535 shall be reserved for music albums. In the event applications
536536 are not received and incentives are not allocated for music
537537 albums by July 1 of each year, the funds may revert for
538538 rebates to other qualified production companies. "
539539 Section 2. This act shall become effective on June 1,
540540 2024.
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