HB373INTRODUCED
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HB373
8A7TF2F-1
By Representatives Kiel, Stadthagen, Underwood, Butler, Estes,
Moore (P), Wilcox, Collins
RFD: Economic Development and Tourism
First Read: 27-Feb-25
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6 8A7TF2F-1 02/12/2025 KHF (F)KHF 2025-784
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First Read: 27-Feb-25
SYNOPSIS:
This bill would rename the Alabama Film Office
the Alabama Entertainment Office; allows music albums
to be included as a qualified production; increases the
maximum expenditure threshold eligible for a rebate;
establishes a minimum spend threshold for musical
albums to qualify for incentives; increases the annual
cap for incentives; sets aside incentives for music
albums until July 1 of each year; and allows up to
three million dollars ($3,000,000) in unspent
incentives to be carried forward each fiscal year,
provided that the total amount carried over does not
exceed three million dollars ($3,000,000).
A BILL
TO BE ENTITLED
AN ACT
Relating to the Entertainment Industry Incentive Act of
2009; to amend Sections 41-7A-1, 41-7A-42, 41-7A-43, as last
amended by Act 2024-406 of the 2024 Regular Session, and
Section 41-7A-48, Code of Alabama 1975, to rename the Alabama
Film Office the Alabama Entertainment Office; to increase the
maximum expenditure threshold eligible for a rebate; to
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maximum expenditure threshold eligible for a rebate; to
include music albums as a qualified production; to set minimum
expenditure limits for music albums to qualify for incentives;
to increase the annual cap on incentives; to set aside a
portion of the incentives annually for music albums; and to
allow a portion on unspent incentives to be carried
forward.
BE IT ENACTED BY THE LEGISLATURE OF ALABAMA:
Section 1. Sections 41-7A-1, 41-7A-42, 41-7A-43, as
last amended by Act 2024-406 of the 2024 Regular Session, and
Section 41-7A-48, Code of Alabama 1975, are amended as
follows:
"§41-7A-1
On September 1, 1995, the management of the Alabama
FilmEntertainment Office shall be vested in a director who
shall be appointed by the secretary of the department and
shall serve at his or her pleasure. The salary shall be
established by the secretary of the department and approved by
the Governor. 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-42
For purposes of this article, the following terms have
the following meanings:
(1) COMPANY. A corporation, partnership, limited
liability company, or any other business entity.
(2) DEPARTMENT. The Alabama Department of Commerce.
(3) ENTERTAINMENT INDUSTRY. Those persons or entities
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(3) ENTERTAINMENT INDUSTRY. Those persons or entities
engaged in the production of entertainment content as defined
under paragraph (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 FilmEntertainment 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
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
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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,
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
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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 fundraising, 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 that is in default on a loan.
(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
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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 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 -five million dollars
($20,000,000)($25,000,000) 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
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
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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
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
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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
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 department and the Commissioner of the
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(h)(i) The department and the Commissioner of the
Department of Revenue shall 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 For the fiscal year
ending September 30, 2015, through the fiscal year ending
September 30, 2025 , the aggregate cap of incentives granted
under this article shall not exceed twenty million dollars
($20,000,000) for all qualified production companies. For the
fiscal year ending September 30, 2026, and all subsequent
fiscal years, the aggregate cap of incentives granted under
this article shall not exceed thirty million dollars
($30,000,000) for all qualified production expenditures.
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($30,000,000) for all qualified production expenditures.
(b) For the fiscal year ending September 30, 2026, and
all subsequent fiscal years, 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 be used for rebates to other
qualified production companies.
(c) Any unspent incentives under this article in a
fiscal year shall be carried over to the following fiscal
year, provided that the total amount carried over in any
fiscal year does not exceed three million dollars
($3,000,000)."
Section 2. This act shall become effective on October
1, 2025.
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