HB326INTRODUCED
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HB326
2HFHSKS-1
By Representative Kiel
RFD: Ways and Means Education
First Read: 19-Mar-24
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First Read: 19-Mar-24
SYNOPSIS:
Under existing law, certain state rebates and
sales, use, and lodging tax exemptions are provided for
qualified production companies in the entertainment
industry working in efforts to attract the
entertainment industry to Alabama.
This bill would amend the Entertainment Industry
Incentive Act of 2009 to rename the Alabama Film Office
as the Alabama Entertainment Office, allow music albums
to be included as qualified production, set the minimum
expenditure threshold for music albums to qualify for
incentives, and set aside incentives for music albums
until July 1 of each year.
A BILL
TO BE ENTITLED
AN ACT
Relating to the Entertainment Industry Incentive Act of
2009; to amend Sections 41-7A-1, 41-7A-2, 41-7A-42, 41-7A-43,
and 41-7A-48, Code of Alabama 1975, to rename the Alabama Film
Office as the Alabama Entertainment Office; to include music
albums as a qualified production; to set minimum expenditure
limits for music albums to qualify for incentives; and to set
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limits for music albums to qualify for incentives; and to set
aside a portion of the incentives annually for music albums
until July 1 of each year.
BE IT ENACTED BY THE LEGISLATURE OF ALABAMA:
Section 1. Sections 41-7A-1, 41-7A-2, 41-7A-42,
41-7A-43, and 41-7A-48, Code of Alabama 1975, are amended to
read as follows:
"§41-7A-1
On September 1, 1995, the management of the Alabama
Entertainment Film Office shall be vested in a director who
shall be appointed by the Governor and shall serve at his or
her pleasure. The salary shall be established by the Governor
at an amount not to exceed forty-eight thousand dollars
($48,000) annually and adjusted thereafter consistent with
general cost-of-living adjustments approved for state
employees. In fixing the salary, the Governor shall give due
consideration to the salaries of comparable positions in other
states in the southeast. The director shall have the same
rights, privileges, benefits, and membership status in the
Employees' Retirement System as other unclassified employees
in the state service."
"§41-7A-2
All other employees necessary to carry out the duties
and functions of the Alabama Entertainment Film Office shall
be employed subject to the provisions of the Merit System law.
The State Personnel Board, with the assistance of the Director
of the Alabama Development Office, shall establish positions
as needed in the classified service for the employees of the
Alabama Entertainment Film Office."
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Alabama Entertainment Film Office."
"§41-7A-42
For purposes of this article, the following terms shall
have the following meanings:
(1) COMPANY. A corporation, partnership, limited
liability company, or any other business entity.
(2) DEPARTMENT. The Alabama Department of Revenue.
(3) ENTERTAINMENT INDUSTRY. Those persons or entities
engaged in the production of entertainment content as defined
under paragraph a. of subdivision (8) a.
(4) EXPENDED IN ALABAMA. In the case of tangible
property, property which is acquired or leased from a source
within the State of Alabama; in the case of services, services
performed for a qualified production project in the State of
Alabama.
(5) OFFICE. The Alabama Entertainment Film Office.
(6) PAYROLL. All salary, wages, and other compensation,
including related benefits, including specifically, but not
limited to, compensation and benefits provided to resident and
nonresident producers, directors, writers, actors, and other
personnel involved in qualified production projects in
Alabama.
(7) PRODUCTION EXPENDITURES.
a. The term includes preproduction, production, and
postproduction expenditures incurred in the State of Alabama
that are directly used in a state-certified production,
including, but not limited to, the following: Set construction
and operation, wardrobe, makeup, set accessories, and related
services; costs associated with photography and sound
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services; costs associated with photography and sound
synchronization, lighting, and related services and materials;
editing and related services; rental of facilities and
equipment; leasing of vehicles; costs of food and lodging;
costs of catering; digital or tape editing, film processing,
transfer of film to tape or digital format; transfer direct to
DVD, cable, or satellite for distribution; sound mixing,
special and visual effects including duplication, film
processing digital, DVD, music composition, and satellite
distribution; total aggregate payroll; music; airfare;
insurance costs of bonding; or other similar production
expenditures as determined by rule or regulation.
b. The term includes financial contributions or
educational or workforce development in partnership with
related educational institutions, or local industry
organizations, or both, contributed toward the furtherance of
the local entertainment media industries.
c. The term does not include postproduction
expenditures for marketing or any amounts that are paid to
persons or entities as a result of their participation in
profits from the exploitation of a motion picture production.
(8) QUALIFIED PRODUCTION.
a. The term means entertainment content created in
whole or in part within the state, including motion pictures;
soundtracks for motion pictures; documentaries; long-form,
specials, miniseries, series, sound recordings, music albums,
videos and music videos, and interstitials television
programming; interactive television; interactive games; video
games; commercials; infomercials; any format of digital media,
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games; commercials; infomercials; any format of digital media,
including an interactive website that is intended for national
or international distribution or exhibition to the general
public; and any trailer, pilot, video teaser, or demo created
primarily to stimulate the sale, marketing, promotion, or
exploitation of future investment in either a product or a
qualified production via any means and media in any digital
media format, film, or videotape, provided such program meets
all the underlying criteria of a qualified production.
b. The term does not include any ongoing television
program created primarily as news, weather, or financial
market reports, a production featuring current events,
sporting events, an awards show or other gala event, a
production whose sole purpose is fund-raising, a long-form
production that primarily markets a product or service, a
production used for corporate training or in-house corporate
advertising or other similar productions; nor does the term
include any production for which records are required to be
maintained under 18 U.S.C. § 2257 with respect to sexually
explicit content; nor does the term mean or include any form
of gambling, gaming, wagering, or pari-mutuel wagering
activity or enterprise.
(9) QUALIFIED PRODUCTION COMPANY.
a. The term means a company engaged in the business of
producing a qualified production, as that term is defined.
b. The term does not mean or include any company owned,
affiliated, or controlled, in whole or in part, by any company
or person which is in default on a loan.
(10) RESIDENT OF ALABAMA. A natural person and, for the
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(10) RESIDENT OF ALABAMA. A natural person and, for the
purpose of determining eligibility for the incentives provided
by this article, any person domiciled in the State of Alabama
and any other person who maintains a permanent place of abode
within the state and spends in the aggregate more than six
months of each year within the State of Alabama.
(11) STATE-CERTIFIED PRODUCTION. A qualified production
approved by the office, produced by a qualified production
company."
"§41-7A-43
(a) Beginning January 1, 2009, a qualified production
company shall be entitled to a rebate for production
expenditures, as defined in subdivision (7) of Section
41-7A-42(7), related to a state-certified production. The
rebate shall be equal to 25 percent of the state-certified
production's production expenditures excluding payroll paid to
residents of Alabama plus 35 percent of all payroll paid to
residents of Alabama for the state-certified production,
provided the total production expenditures for a project must
equal or exceed at least five hundred thousand dollars
($500,000), but no rebate shall be available for production
expenditures incurred after the first twenty million dollars
($20,000,000) of production expenditures expended in Alabama
on a state-certified production.
(b) A single episode in a television series or
miniseries may be considered a single production project for
purposes of this section. However, in determining the total
production expenditures incurred by a qualified production
company on a qualified production, the total production
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company on a qualified production, the total production
expenditures of a television series or miniseries, whether a
single season or multiple seasons thereof, to be filmed within
a period of 12 consecutive months, each individual episode of
which separately and independently meets the definition of a
qualified production, may be aggregated to meet the monetary
requirements set forth in subsection (a) as long as each
individual episode within the series pertains to the same
subject as the other episodes in the series.
(c) A single commercial may be considered a single
production project for purposes of this section. However, in
determining the total production expenditures incurred by a
qualified production company on a qualified production, the
total production expenditures of a series of commercials to be
filmed within a period of 12 consecutive months, each of which
separately and independently meets the definition of a
qualified production, may be aggregated to meet the monetary
requirements set forth in subsection (a) as long as each
individual commercial within the series pertains to the same
subject as the other commercials in the series and was planned
as part of a series of commercials to be filmed within a
period of 12 consecutive months at the time the qualified
production company applied for the incentives.
(d) A qualified production company shall be entitled to
the rebate for production expenditures as provided in
subsection (a) for a qualified project that is limited only to
the production of a soundtrack used in a motion picture or
documentary, provided that the production expenditures for the
soundtrack project must equal or exceed at least fifty
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soundtrack project must equal or exceed at least fifty
thousand dollars ($50,000), but no rebate shall be available
for production expenditures incurred after the first three
hundred thousand dollars ($300,000) of production expenditures
expended in Alabama.
(e) A qualified production company shall be entitled to
the rebate for production expenditures as provided in
subsection (a) for a qualified project that is limited only to
the production of a music video, provided that the production
expenditures for the music video equal or exceed fifty
thousand dollars ($50,000), but no rebate shall be available
for production expenditures incurred after the first two
hundred thousand dollars ($200,000) of production expenditures
expended in Alabama.
(f) A qualified production company shall be entitled to
the rebate for production expenditures as provided in
subsection (a) for a qualified project that is limited only to
the production of a music album, provided that the production
expenditures for the music album equal or exceed thirty
thousand dollars ($30,000), but no rebate shall be available
for production expenditures incurred after the first two
hundred thousand dollars ($200,000) of production expenditures
expended in Alabama.
(f)(g) The rebate described in this section may be
applied to offset any income tax liability applicable to a
qualified production company for the tax year in which
production activity in Alabama on the state-certified
production concludes.
(g)(h) If the rebate available under this section
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(g)(h) If the rebate available under this section
exceeds a qualified production company's Alabama income tax
liability for the tax year in which production activity in
Alabama concludes on the state-certified production, the
excess of the rebate over a qualified production company's
Alabama income tax liability shall be rebated to the qualified
production company.
(h)(i) The Commissioner of the Department of Revenue
and the office shall promulgate adopt rules necessary to
administer this section."
"§41-7A-48
(a) For the fiscal year ending September 30, 2009, the
aggregate cap of incentives granted under this article shall
not exceed five million dollars ($5,000,000) for all qualified
production companies. For the fiscal year ending September 30,
2010, the aggregate cap of incentives granted under this
article shall not exceed seven million five hundred thousand
dollars ($7,500,000) for all qualified production companies.
For fiscal years ending September 30, 2011, and September 30,
2012, the aggregate cap of incentives granted under this
article shall not exceed ten million dollars ($10,000,000) for
all qualified production companies. For the fiscal year ending
September 30, 2013, the aggregate cap of incentives granted
under this article shall not exceed fifteen million dollars
($15,000,000). For the fiscal year ending September 30, 2014,
the aggregate cap of incentives granted under this article
shall not exceed fifteen million dollars ($15,000,000) and for
all subsequent fiscal years thereafter, the aggregate cap of
incentives granted under this article shall not exceed twenty
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incentives granted under this article shall not exceed twenty
million dollars ($20,000,000) for all qualified production
companies.
(b) For each fiscal year beginning October 1, 2024, two
million dollars ($2,000,000) of the amounts in subsection (a)
shall be reserved for music albums. In the event applications
are not received and incentives are not allocated for music
albums by July 1 of each year, the funds may revert for
rebates to other qualified production companies. "
Section 2. This act shall become effective on June 1,
2024.
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