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AN ACT relating to the film industry. 1
Be it enacted by the General Assembly of the Commonwealth of Kentucky: 2
SECTION 1. A NEW SECTION OF SUBCHAPTER 12 OF KRS CHAPTER 3
154 IS CREATED TO READ AS FOLLOWS: 4
(1) There is created the Kentucky Film Office, which shall be attached to the Cabinet 5
for Economic Development for administrative purposes only. The office shall be 6
headed by an executive director selected and compensated as provided in 7
subsection (2)(e) of Section 2 of this Act. The executive director shall have the 8
authority to hire staff, including a marketing and development director, contract 9
for services, expend funds, and operate the normal business activities of the 10
council. 11
(2) The duties of the Kentucky Film Office shall include but not be limited to: 12
(a) Coordinating with local and regional film offices or local tourism 13
commissions on issues impacting the film industry in Kentucky, including 14
streamlining local permitting processes; 15
(b) Marketing Kentucky as a location for film production; 16
(c) Providing assistance to production companies for compliance with 17
Subchapter 61 of KRS Chapter 154; 18
(d) Assisting film studios and workforce training programs to increase the film 19
production workforce; 20
(e) Coordinating with the Kentucky Film Leadership Council established in 21
Section 2 of this Act to develop marketing strategies to promote and grow 22
the film production industry in Kentucky; 23
(f) Creating a Kentucky Film Office website and a one-stop portal to provide 24
information to film producers regarding studios, local and regional 25
commissions, personnel, filming locations, permitting, and other matters 26
relevant to the film industry; and 27 UNOFFICIAL COPY 25 RS SB 1/GA
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(g) Adopting the recommendations of the council created pursuant to Section 2 1
of this Act and promulgating regulations in accordance with KRS Chapter 2
13A necessary to conduct the operations of the office. 3
(3) The office shall receive and retain all tax incentive application fees collected 4
pursuant to Section 7 of this Act. The nonrefundable application fee that's 5
currently payable to the office upon submission of a tax incentive application 6
shall be determined by the total amount of qualifying expenditures and qualifying 7
payroll expenditures, as defined in Section 5 of this Act. If the total is: 8
(a) Less than fifty thousand dollars ($50,000), the application fee shall be two 9
hundred fifty dollars ($250); 10
(b) Between fifty thousand dollars ($50,000) and one hundred thousand dollars 11
($100,000), the application fee shall be five hundred dollars ($500); or 12
(c) More than one hundred thousand dollars ($100,000), the application fee 13
shall be one thousand dollars ($1,000). 14
(4) The office may accept contributions, grants, and other property of value to hold 15
and apply to projects for which the office is created. Any funds not expended at 16
the close of a fiscal year shall not lapse but shall be carried forward into the next 17
fiscal year. Notwithstanding KRS 142.406, for the period beginning July 1, 2025, 18
and ending June 30, 2027, two and one-half percent (2.5%) of the transient room 19
tax collected pursuant to KRS 142.400, up to the maximum amount of five 20
hundred thousand dollars ($500,000) shall be transferred to the office and 21
dedicated to staff and operational costs. 22
SECTION 2. A NEW SECTION OF SUBCHAPTER 12 OF KRS CHAPTER 23
154 IS CREATED TO READ AS FOLLOWS: 24
(1) There is hereby established the Kentucky Film Leadership Council. The council 25
shall be administratively attached to the Kentucky Film Office established in 26
Section 1 of this Act. 27 UNOFFICIAL COPY 25 RS SB 1/GA
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(2) The functions and purposes of the council shall be to: 1
(a) Review all applications for tax incentives under Section 4 of this Act and 2
Subchapter 61 of KRS Chapter 154 to determine eligibility within twenty 3
(20) days of receipt and forward each eligible application to the cabinet for 4
an economic analysis of the project. Notwithstanding Section 6 of this Act, 5
if the analysis supports the project, the application and all related 6
documents shall be submitted back to the council to make the final decision 7
at a meeting held at the call of the chair regarding whether to authorize a 8
tax incentive agreement. The cabinet shall be responsible for negotiating, 9
preparing, and executing tax incentive agreements under this section; 10
(b) Recommend policies and standards for the Kentucky Film Office created in 11
Section 1 of this Act; 12
(c) Develop comprehensive film industry strategies in partnership with the 13
Cabinet for Economic Development, the Tourism, Arts and Heritage 14
Cabinet, and the Education and Labor Cabinet; 15
(d) Partner with local and regional film offices, production studios, and 16
relevant workforce training programs in Kentucky; and 17
(e) Conduct a nationwide search for the executive director of the Kentucky 18
Film Office and make decisions regarding hiring and compensation. The 19
salary of the executive director of the Kentucky Film Office shall be exempt 20
from KRS 64.640. 21
(3) (a) The council shall consist of the following seven (7) voting members: 22
1. The secretary of the Cabinet for Economic Development or his or her 23
designee; 24
2. The secretary of the Tourism, Arts and Heritage Cabinet or his or her 25
designee; 26
3. The secretary of the Education and Labor Cabinet or his or her 27 UNOFFICIAL COPY 25 RS SB 1/GA
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designee; and 1
4. Four (4) members who shall be appointed by the Governor as follows: 2
a. Two (2) representatives from Kentucky film production 3
companies; 4
b. One (1) representative from a film profession, including but not 5
limited to producers, actors, production accountants with film 6
industry experience, or film financiers; and 7
c. One (1) representative who is the head of a local or regional film 8
commission. 9
(b) All members appointed by the Governor under paragraph (a)4. of this 10
subsection shall have knowledge of or experience in the Kentucky film 11
industry. After the expiration of their initial terms, the appointed members 12
shall serve a term of four (4) years and until a successor is appointed and 13
qualified in accordance with paragraph (a)4. of this subsection. Any 14
vacancy that occurs shall be filled for the unexpired term in the same 15
manner as the original appointment. All members appointed by the 16
Governor shall be subject to confirmation by the Senate as provided in KRS 17
11.160. 18
(c) A majority of the members shall appoint the chair from among the members 19
of the council. 20
(d) Members shall serve without compensation but shall be reimbursed for 21
necessary travel expenses. 22
(e) The council shall meet at the call of the chair. 23
(f) A quorum shall be a majority of the membership of the council. 24
Section 3. KRS 12.020 (Effective July 1, 2025) is amended to read as follows: 25
Departments, program cabinets and their departments, and the respective major 26
administrative bodies that they include are enumerated in this section. It is not intended 27 UNOFFICIAL COPY 25 RS SB 1/GA
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that this enumeration of administrative bodies be all-inclusive. Every authority, board, 1
bureau, interstate compact, commission, committee, conference, council, office, or any 2
other form of organization shall be included in or attached to the department or program 3
cabinet in which they are included or to which they are attached by statute or statutorily 4
authorized executive order; except in the case of the Personnel Board and where the 5
attached department or administrative body is headed by a constitutionally elected 6
officer, the attachment shall be solely for the purpose of dissemination of information and 7
coordination of activities and shall not include any authority over the functions, 8
personnel, funds, equipment, facilities, or records of the department or administrative 9
body. 10
I. Cabinet for General Government - Departments headed by elected officers: 11
(1) The Governor. 12
(2) Lieutenant Governor. 13
(3) Department of State. 14
(a) Secretary of State. 15
(b) Board of Elections. 16
(c) Registry of Election Finance. 17
(4) Department of Law. 18
(a) Attorney General. 19
(5) Department of the Treasury. 20
(a) Treasurer. 21
(6) Department of Agriculture. 22
(a) Commissioner of Agriculture. 23
(b) Agricultural Development Board. 24
(c) Kentucky Agricultural Finance Corporation. 25
(7) Auditor of Public Accounts. 26
(a) Commonwealth Office of the Ombudsman. 27 UNOFFICIAL COPY 25 RS SB 1/GA
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II. Program cabinets headed by appointed officers: 1
(1) Justice and Public Safety Cabinet: 2
(a) Department of Kentucky State Police. 3
1. Office of Administrative Services. 4
a. Division of Operational Support. 5
b. Division of Management Services. 6
2. Office of Operations. 7
a. Division of West Troops. 8
b. Division of East Troops. 9
c. Division of Special Enforcement. 10
d. Division of Commercial Vehicle Enforcement. 11
3. Office of Technical Services. 12
a. Division of Forensic Sciences. 13
b. Division of Electronic Services. 14
c. Division of Records Management. 15
(b) Department of Criminal Justice Training. 16
(c) Department of Corrections. 17
(d) Department of Juvenile Justice. 18
(e) Office of the Secretary. 19
(f) Office of Drug Control Policy. 20
(g) Office of Legal Services. 21
(h) Office of the Kentucky State Medical Examiner. 22
(i) Parole Board. 23
(j) Kentucky State Corrections Commission. 24
(k) Office of Legislative and Intergovernmental Services. 25
(l) Office of Human Resource Management. 26
1. Division of Human Resource Administration. 27 UNOFFICIAL COPY 25 RS SB 1/GA
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2. Division of Employee Management. 1
(m) Department of Public Advocacy. 2
(n) Office of Communications. 3
1. Information Technology Services Division. 4
(o) Office of Financial Management Services. 5
1. Division of Financial Management. 6
(p) Grants Management Division. 7
(2) Energy and Environment Cabinet: 8
(a) Office of the Secretary. 9
1. Office of Legislative and Intergovernmental Affairs. 10
2. Office of Legal Services. 11
a. Legal Division I. 12
b. Legal Division II. 13
3. Office of Administrative Hearings. 14
4. Office of Communication. 15
5. Mine Safety Review Commission. 16
6. Office of Kentucky Nature Preserves. 17
7. Kentucky Public Service Commission. 18
(b) Department for Environmental Protection. 19
1. Office of the Commissioner. 20
2. Division for Air Quality. 21
3. Division of Water. 22
4. Division of Environmental Program Support. 23
5. Division of Waste Management. 24
6. Division of Enforcement. 25
7. Division of Compliance Assistance. 26
(c) Department for Natural Resources. 27 UNOFFICIAL COPY 25 RS SB 1/GA
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1. Office of the Commissioner. 1
2. Division of Mine Permits. 2
3. Division of Mine Reclamation and Enforcement. 3
4. Division of Abandoned Mine Lands. 4
5. Division of Oil and Gas. 5
6. Division of Mine Safety. 6
7. Division of Forestry. 7
8. Division of Conservation. 8
9. Office of the Reclamation Guaranty Fund. 9
(d) Office of Energy Policy. 10
1. Division of Energy Assistance. 11
(e) Office of Administrative Services. 12
1. Division of Human Resources Management. 13
2. Division of Financial Management. 14
3. Division of Information Services. 15
(3) Public Protection Cabinet. 16
(a) Office of the Secretary. 17
1. Office of Communications and Public Outreach. 18
2. Office of Legal Services. 19
a. Insurance Legal Division. 20
b. Alcoholic Beverage Control Legal Division. 21
c. Housing, Buildings and Construction Legal Division. 22
d. Financial Institutions Legal Division. 23
e. Professional Licensing Legal Division. 24
3. Office of Administrative Hearings. 25
4. Office of Administrative Services. 26
a. Division of Human Resources. 27 UNOFFICIAL COPY 25 RS SB 1/GA
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b. Division of Fiscal Responsibility. 1
(b) Office of Claims and Appeals. 2
1. Board of Tax Appeals. 3
2. Board of Claims. 4
3. Crime Victims Compensation Board. 5
(c) Kentucky Boxing and Wrestling Commission. 6
(d) Department of Alcoholic Beverage Control. 7
1. Division of Distilled Spirits. 8
2. Division of Malt Beverages. 9
3. Division of Enforcement. 10
(e) Department of Financial Institutions. 11
1. Division of Depository Institutions. 12
2. Division of Non-Depository Institutions. 13
3. Division of Securities. 14
(f) Department of Housing, Buildings and Construction. 15
1. Division of Fire Prevention. 16
2. Division of Plumbing. 17
3. Division of Heating, Ventilation, and Air Conditioning. 18
4. Division of Building Code Enforcement. 19
(g) Department of Insurance. 20
1. Division of Health and Life Insurance and Managed Care. 21
2. Division of Property and Casualty Insurance. 22
3. Division of Administrative Services. 23
4. Division of Financial Standards and Examination. 24
5. Division of Licensing. 25
6. Division of Insurance Fraud Investigation. 26
7. Division of Consumer Protection. 27 UNOFFICIAL COPY 25 RS SB 1/GA
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(h) Department of Professional Licensing. 1
1. Real Estate Authority. 2
2. Division of Real Property Boards. 3
(4) Transportation Cabinet: 4
(a) Department of Highways. 5
1. Office of Project Development. 6
2. Office of Project Delivery and Preservation. 7
3. Office of Highway Safety. 8
4. Highway District Offices One through Twelve. 9
(b) Department of Vehicle Regulation. 10
(c) Department of Aviation. 11
(d) Department of Rural and Municipal Aid. 12
1. Office of Local Programs. 13
2. Office of Rural and Secondary Roads. 14
(e) Office of the Secretary. 15
1. Office of Public Affairs. 16
2. Office for Civil Rights and Small Business Development. 17
3. Office of Budget and Fiscal Management. 18
4. Office of Inspector General. 19
5. Secretary's Office of Safety. 20
(f) Office of Support Services. 21
(g) Office of Transportation Delivery. 22
(h) Office of Audits. 23
(i) Office of Human Resource Management. 24
(j) Office of Information Technology. 25
(k) Office of Legal Services. 26
(5) Cabinet for Economic Development: 27 UNOFFICIAL COPY 25 RS SB 1/GA
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(a) Office of the Secretary. 1
1. Office of Legal Services. 2
2. Department for Business and Community Development. 3
a. Development and Retention Division – West Kentucky. 4
b. Development, Retention, and Administrative Division – 5
Central and East Kentucky. 6
c. Community and Workforce Development Division. 7
3. Department for Financial Services. 8
a. Kentucky Economic Development Finance Authority. 9
b. Finance and Personnel Division. 10
c. IT and Resource Management Division. 11
d. Compliance Division. 12
e. Program Administration Division. 13
f. Bluegrass State Skills Corporation. 14
g. The GRANT Commission. 15
4. Office of Strategy and Public Affairs. 16
a. Marketing and Communications Division. 17
b. Research and Strategy Division. 18
5. Office of Entrepreneurship and Innovation. 19
a. Commission on Small Business Innovation and Advocacy. 20
6. Kentucky Film Office. 21
a. Kentucky Film Leadership Council. 22
(6) Cabinet for Health and Family Services: 23
(a) Office of the Secretary. 24
1. Office of Public Affairs. 25
2. Office of Legal Services. 26
3. Office of Inspector General. 27 UNOFFICIAL COPY 25 RS SB 1/GA
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4. Office of Human Resource Management. 1
5. Office of Finance and Budget. 2
6. Office of Legislative and Regulatory Affairs. 3
7. Office of Administrative Services. 4
8. Office of Application Technology Services. 5
9. Office of Data Analytics. 6
10. Office of Medical Cannabis. 7
a. Division of Enforcement and Compliance. 8
b. Division of Licensure and Access. 9
(b) Department for Public Health. 10
(c) Department for Medicaid Services. 11
(d) Department for Behavioral Health, Developmental and Intellectual 12
Disabilities. 13
(e) Department for Aging and Independent Living. 14
(f) Department for Community Based Services. 15
(g) Department for Family Resource Centers and Volunteer Services. 16
(7) Finance and Administration Cabinet: 17
(a) Office of the Secretary. 18
(b) Office of the Inspector General. 19
(c) Office of Legislative and Intergovernmental Affairs. 20
(d) Office of General Counsel. 21
(e) Office of the Controller. 22
(f) Office of Administrative Services. 23
(g) Office of Policy and Audit. 24
(h) Department for Facilities and Support Services. 25
(i) Department of Revenue. 26
(j) Commonwealth Office of Technology. 27 UNOFFICIAL COPY 25 RS SB 1/GA
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(k) State Property and Buildings Commission. 1
(l) Office of Equal Employment Opportunity and Contract Compliance. 2
(m) Kentucky Employees Retirement Systems. 3
(n) Commonwealth Credit Union. 4
(o) State Investment Commission. 5
(p) Kentucky Housing Corporation. 6
(q) Kentucky Local Correctional Facilities Construction Authority. 7
(r) Kentucky Turnpike Authority. 8
(s) Historic Properties Advisory Commission. 9
(t) Kentucky Higher Education Assistance Authority. 10
(u) Kentucky River Authority. 11
(v) Kentucky Teachers' Retirement System Board of Trustees. 12
(w) Executive Branch Ethics Commission. 13
(x) Office of Fleet Management. 14
(8) Tourism, Arts and Heritage Cabinet: 15
(a) Kentucky Department of Tourism. 16
1. Division of Tourism Services. 17
2. Division of Marketing and Administration. 18
3. Division of Communications and Promotions. 19
(b) Kentucky Department of Parks. 20
1. Division of Information Technology. 21
2. Division of Human Resources. 22
3. Division of Financial Operations. 23
4. Division of Purchasing. 24
5. Division of Facilities. 25
6. Division of Park Operations. 26
7. Division of Sales, Marketing, and Customer Service. 27 UNOFFICIAL COPY 25 RS SB 1/GA
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8. Division of Engagement. 1
9. Division of Food Services. 2
10. Division of Rangers. 3
(c) Department of Fish and Wildlife Resources. 4
1. Division of Law Enforcement. 5
2. Division of Administrative Services. 6
3. Division of Engineering, Infrastructure, and Technology. 7
4. Division of Fisheries. 8
5. Division of Information and Education. 9
6. Division of Wildlife. 10
7. Division of Marketing. 11
(d) Kentucky Horse Park. 12
1. Division of Support Services. 13
2. Division of Buildings and Grounds. 14
3. Division of Operational Services. 15
(e) Kentucky State Fair Board. 16
1. Office of Administrative and Information Technology Services. 17
2. Office of Human Resources and Access Control. 18
3. Division of Expositions. 19
4. Division of Kentucky Exposition Center Operations. 20
5. Division of Kentucky International Convention Center. 21
6. Division of Public Relations and Media. 22
7. Division of Venue Services. 23
8. Division of Personnel Management and Staff Development. 24
9. Division of Sales. 25
10. Division of Security and Traffic Control. 26
11. Division of Information Technology. 27 UNOFFICIAL COPY 25 RS SB 1/GA
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12. Division of the Louisville Arena. 1
13. Division of Fiscal and Contract Management. 2
14. Division of Access Control. 3
(f) Office of the Secretary. 4
1. Office of Finance. 5
2. Office of Government Relations and Administration. 6
(g) Office of Legal Affairs. 7
(h) Office of Human Resources. 8
(i) Office of Public Affairs and Constituent Services. 9
(j) Office of Arts and Cultural Heritage. 10
(k) Kentucky African-American Heritage Commission. 11
(l) Kentucky Foundation for the Arts. 12
(m) Kentucky Humanities Council. 13
(n) Kentucky Heritage Council. 14
(o) Kentucky Arts Council. 15
(p) Kentucky Historical Society. 16
1. Division of Museums. 17
2. Division of Oral History and Educational Outreach. 18
3. Division of Research and Publications. 19
4. Division of Administration. 20
(q) Kentucky Center for the Arts. 21
1. Division of Governor's School for the Arts. 22
(r) Kentucky Artisans Center at Berea. 23
(s) Northern Kentucky Convention Center. 24
(t) Eastern Kentucky Exposition Center. 25
(9) Personnel Cabinet: 26
(a) Office of the Secretary. 27 UNOFFICIAL COPY 25 RS SB 1/GA
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(b) Department of Human Resources Administration. 1
(c) Office of Employee Relations. 2
(d) Kentucky Public Employees Deferred Compensation Authority. 3
(e) Office of Administrative Services. 4
(f) Office of Legal Services. 5
(g) Governmental Services Center. 6
(h) Department of Employee Insurance. 7
(i) Office of Diversity, Equality, and Training. 8
(j) Office of Public Affairs. 9
(10) Education and Labor Cabinet: 10
(a) Office of the Secretary. 11
1. Office of Legal Services. 12
a. Workplace Standards Legal Division. 13
b. Workers' Claims Legal Division. 14
c. Workforce Development Legal Division. 15
2. Office of Administrative Services. 16
a. Division of Human Resources Management. 17
b. Division of Fiscal Management. 18
c. Division of Operations and Support Services. 19
3. Office of Technology Services. 20
a. Division of Information Technology Services. 21
4. Office of Policy and Audit. 22
5. Office of Legislative Services. 23
6. Office of Communications. 24
7. Office of the Kentucky Center for Statistics. 25
8. Board of the Kentucky Center for Statistics. 26
9. Early Childhood Advisory Council. 27 UNOFFICIAL COPY 25 RS SB 1/GA
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10. Governors' Scholars Program. 1
11. Governor's School for Entrepreneurs Program. 2
12. Foundation for Adult Education. 3
(b) Department of Education. 4
1. Kentucky Board of Education. 5
2. Kentucky Technical Education Personnel Board. 6
3. Education Professional Standards Board. 7
(c) Board of Directors for the Center for School Safety. 8
(d) Department for Libraries and Archives. 9
(e) Kentucky Environmental Education Council. 10
(f) Kentucky Educational Television. 11
(g) Kentucky Commission on the Deaf and Hard of Hearing. 12
(h) Department of Workforce Development. 13
1. Career Development Office. 14
2. Office of Vocational Rehabilitation. 15
a. Division of Kentucky Business Enterprise. 16
b. Division of the Carl D. Perkins Vocational Training Center. 17
c. Division of Blind Services. 18
d. Division of Field Services. 19
e. Statewide Council for Vocational Rehabilitation. 20
f. Employment First Council. 21
3. Office of Employer and Apprenticeship Services. 22
a. Division of Apprenticeship. 23
4. Kentucky Apprenticeship Council. 24
5. Division of Technical Assistance. 25
6. Office of Adult Education. 26
7. Office of the Kentucky Workforce Innovation Board. 27 UNOFFICIAL COPY 25 RS SB 1/GA
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(i) Department of Workplace Standards. 1
1. Division of Occupational Safety and Health Compliance. 2
2. Division of Occupational Safety and Health Education and 3
Training. 4
3. Division of Wages and Hours. 5
(j) Office of Unemployment Insurance. 6
(k) Kentucky Unemployment Insurance Commission. 7
(l) Department of Workers' Claims. 8
1. Division of Workers' Compensation Funds. 9
2. Office of Administrative Law Judges. 10
3. Division of Claims Processing. 11
4. Division of Security and Compliance. 12
5. Division of Specialist and Medical Services. 13
6. Workers' Compensation Board. 14
(m) Workers' Compensation Funding Commission. 15
(n) Kentucky Occupational Safety and Health Standards Board. 16
(o) State Labor Relations Board. 17
(p) Employers' Mutual Insurance Authority. 18
(q) Kentucky Occupational Safety and Health Review Commission. 19
(r) Workers' Compensation Nominating Committee. 20
(s) Office of Educational Programs. 21
(t) Kentucky Workforce Innovation Board. 22
(u) Kentucky Commission on Proprietary Education. 23
(v) Kentucky Work Ready Skills Advisory Committee. 24
(w) Kentucky Geographic Education Board. 25
(x) Disability Determination Services Program. 26
III. Other departments headed by appointed officers: 27 UNOFFICIAL COPY 25 RS SB 1/GA
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(1) Council on Postsecondary Education. 1
(2) Department of Military Affairs. 2
(3) Department for Local Government. 3
(4) Kentucky Commission on Human Rights. 4
(5) Kentucky Commission on Women. 5
(6) Department of Veterans' Affairs. 6
(7) Kentucky Commission on Military Affairs. 7
(8) Office of Minority Empowerment. 8
(9) Governor's Council on Wellness and Physical Activity. 9
(10) Kentucky Communications Network Authority. 10
Section 4. KRS 141.383 is amended to read as follows: 11
(1) As used in this section: 12
(a) "Above-the-line production crew" has the same meaning as in KRS 154.61-13
010; 14
(b) "Approved company" has the same meaning as in KRS 154.61-010; 15
(c) ["Authority" has the same meaning as in KRS 154.61-010; 16
(d) ]"Below-the-line production crew" has the same meaning as in KRS 154.61-17
010; 18
(d)[(e)] "Continuous film production" has the same meaning as in KRS 154.61-19
010; 20
(e) "Council" means the Kentucky Film Leadership Council created in Section 21
2 of this Act; 22
(f) "Loan-out entity" has the same meaning as in KRS 154.61-010; 23
(g) "Qualifying expenditure" has the same meaning as in KRS 154.61-010; 24
(h) "Qualifying payroll expenditure" has the same meaning as in KRS 154.61-25
010; 26
(i) "Secretary" has the same meaning as in KRS 154.61-010; and 27 UNOFFICIAL COPY 25 RS SB 1/GA
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(j) "Tax incentive agreement" has the same meaning as KRS 154.61-010. 1
(2) (a) There is hereby created a tax credit against the tax imposed under KRS 2
141.020 or 141.040 and 141.0401, with the ordering of credits as provided in 3
KRS 141.0205. 4
(b) The incentive available under paragraph (a) of this section is: 5
1. A refundable credit for applications approved prior to April 27, 2018; 6
2. A nonrefundable and nontransferable credit for applications approved on 7
or after April 27, 2018, but before January 1, 2022; and 8
3. A refundable credit for applications approved on or after January 1, 9
2022, if the provisions of paragraph (c) of this subsection are met. 10
(c) 1. The total tax incentive approved under KRS 154.61-020 shall be limited 11
to: 12
a. One hundred million dollars ($100,000,000) for calendar year 13
2018 and each calendar year through the calendar year 2021; 14
b. Seventy-five million dollars ($75,000,000) for the calendar year 15
2022 and each calendar year thereafter; and 16
c. Beginning with calendar year 2024, the amount in subdivision b. 17
of this subparagraph shall be allocated accordingly: 18
i. Twenty-five million dollars ($25,000,000) shall be allocated 19
for all approved companies with a continuous film 20
production; and 21
ii. On the first day of July of each calendar year, any unused 22
balance allocated under subpart i. of this subdivision for 23
continuous film productions shall be made available for all 24
approved companies with a motion picture or entertainment 25
production. 26
2. To qualify for the refundable credit, all applicants shall: 27 UNOFFICIAL COPY 25 RS SB 1/GA
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a. Begin filming or production in Kentucky within six (6) months of 1
approval by the council[authority]; and 2
b. Complete filming or production in Kentucky within two (2) years 3
of their production start date. 4
(3) An approved company may receive a refundable tax credit if: 5
(a) The department has received notification from the council[authority] that the 6
approved company has satisfied all requirements of KRS 154.61-020 and 7
154.61-030; and 8
(b) The approved company has provided a detailed cost report and sufficient 9
documentation to the council[authority], which has been forwarded by the 10
council[authority] to the department, that: 11
1. The purchases of qualifying expenditures were made after the execution 12
of the tax incentive agreement; and 13
2. The approved company or loan-out entity has withheld income tax as 14
required by KRS 141.310 on all qualified payroll expenditures, and 15
remitted and certified the withheld amount to the department. 16
(4) Interest shall not be allowed or paid on any refundable credits provided under this 17
section. 18
(5) The department may promulgate administrative regulations under KRS Chapter 19
13A to administer this section. 20
(6) On or before September 1, 2010, and on or before each September 1 thereafter, for 21
the immediately preceding fiscal year, the department shall report to the 22
council[authority] and the Interim Joint Committee on Appropriations and Revenue 23
the names of the approved companies and the amounts of refundable income tax 24
credit claimed. 25
(7) No later than September 1, 2021, and by November 1 every four (4) years 26
thereafter, the department and the Cabinet for Economic Development shall 27 UNOFFICIAL COPY 25 RS SB 1/GA
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cooperatively provide historical data related to the tax credit allowed in this section 1
and KRS 154.61-020 and 154.61-030, including data items beginning with tax 2
credits claimed for taxable years beginning on or after January 1, 2018: 3
(a) The name of the taxpayer claiming the tax credit; 4
(b) The date that the application was approved and the date the filming or 5
production was completed; 6
(c) The taxable year in which the taxpayer claimed the tax credit; 7
(d) The total amount of the tax credit, including any amount denied, any amount 8
applied against a tax liability, any amount refunded, and any amount 9
remaining that may be claimed on a return filed in the future; 10
(e) Whether the taxpayer is a Kentucky-based company as defined in KRS 11
154.61-010; 12
(f) Whether the taxpayer films or produces a: 13
1. Feature-length film, television program, or industrial film; 14
2. National touring production of a Broadway show; or 15
3. Documentary; 16
(g) Whether the filming or production was performed: 17
1. Entirely in an enhanced county; or 18
2. In whole or in part in any Kentucky county other than in an enhanced 19
incentive county; 20
(h) The amount of qualifying expenditures incurred by the taxpayer; 21
(i) The amount of qualifying payroll expenditures paid to: 22
1. Resident below-the-line crew; and 23
2. Nonresident below-the-line production crew; 24
including the number of crew members in each category; 25
(j) The amount of qualifying payroll expenditures paid to: 26
1. Resident above-the-line crew; and 27 UNOFFICIAL COPY 25 RS SB 1/GA
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2. Nonresident above-the-line crew; 1
including the number of crew members in each category; and 2
(k) A brief description of the type of motion picture or entertainment production 3
project. 4
(8) The information required to be reported under this section shall not be considered 5
confidential taxpayer information and shall not be subject to KRS Chapter 131 or 6
any other provisions of the Kentucky Revised Statutes prohibiting disclosure or 7
reporting of information. 8
Section 5. KRS 154.61-010 is amended to read as follows: 9
As used in this subchapter: 10
(1) "Above-the-line production crew" means employees involved with the production 11
of a motion picture or entertainment production whose salaries are negotiated prior 12
to commencement of production, such as actors, directors, producers, and writers; 13
(2) "Animated production" means a nationally distributed feature-length film created 14
with the rapid display of a sequence of images using 2-D or 3-D graphics of 15
artwork or model positions in order to create an illusion of movement; 16
(3) "Approved company" means an eligible company approved for incentives provided 17
under KRS 141.383 and 154.61-020; 18
(4) ["Authority" means the Kentucky Economic Development Finance Authority 19
created in KRS 154.20-010; 20
(5) ]"Below-the-line production crew" means employees involved with the production 21
of a motion picture or entertainment production except above-the-line production 22
crew. "Below-the-line production crew" includes but is not limited to: 23
(a) Casting assistants; 24
(b) Costume design; 25
(c) Extras; 26
(d) Gaffers; 27 UNOFFICIAL COPY 25 RS SB 1/GA
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(e) Grips; 1
(f) Location managers; 2
(g) Production assistants; 3
(h) Set construction staff; and 4
(i) Set design staff; 5
(5)[(6)] "Cabinet" means the Cabinet for Economic Development; 6
(6)[(7)] "Commonwealth" means the Commonwealth of Kentucky; 7
(7)[(8)] "Compensation" means compensation included in adjusted gross income as 8
defined in KRS 141.010; 9
(8)[(9)] "Continuous film production" means a motion picture or entertainment 10
production that: 11
(a) 1. Has a projected budget of a minimum of ten million dollars 12
($10,000,000) per calendar year for qualifying expenditures and 13
qualifying payroll expenditures allocated to all qualifying motion picture 14
or entertainment productions to be filmed or produced in Kentucky, with 15
a minimum of one million five hundred thousand dollars ($1,500,000) 16
per production in Kentucky; and 17
2. Has a minimum of fifty percent (50%) of the funds available and the 18
ability to raise the remaining funds necessary to complete the filming 19
and production, which may be verified by: 20
a. Bank statements or other financial documents; or 21
b. A fundraising plan at the request of the council[authority]; 22
(b) Demonstrates a distribution contract for each motion or entertainment 23
production; 24
(c) Films and produces a minimum of twelve (12) or more days per production 25
within the Commonwealth; and 26
(d) Maintains: 27 UNOFFICIAL COPY 25 RS SB 1/GA
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1. An apprenticeship program or on-the-job training program as defined in 1
KRS 343.010; or 2
2. Partners with a film studies program with an accredited institution of 3
postsecondary education located in the Commonwealth; 4
(9) "Council" means the Kentucky Film Leadership Council created in Section 2 of 5
this Act; 6
(10) "Documentary" means a production based upon factual information and not 7
subjective interjections; 8
(11) "Eligible company" means any person that intends to film or produce a motion 9
picture or entertainment production in the Commonwealth; 10
(12) "Employee" has the same meaning as in KRS 141.010, and, for purposes of this 11
subchapter, also may include the employees or independent contractors of an 12
approved company or the employees of a loan-out entity engaged by an approved 13
company if they meet the requirements of KRS 141.310; 14
(13) "Enhanced incentive county" has the same meaning as in KRS 154.32-010; 15
(14) "Feature-length film" means a live-action or animated production that is: 16
(a) More than thirty (30) minutes in length; and 17
(b) Produced for distribution in theaters or via digital format, including but not 18
limited to DVD, Internet, or mobile electronic devices; 19
(15) "Industrial film" means a business-to-business film that may be viewed by the 20
public, including but not limited to videos used for training or for viewing at a trade 21
show; 22
(16) "Kentucky-based company" has the same meaning as in KRS 164.6011; 23
(17) "Loan-out entity" means a corporation, partnership, limited liability company, or 24
other entity through which an artist or other person is loaned out to perform services 25
for the approved company. A loan-out entity shall be registered and in good 26
standing with the Kentucky Secretary of State. Notwithstanding the business 27 UNOFFICIAL COPY 25 RS SB 1/GA
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organization, the loan-out entity and all employees of and other persons performing 1
services for the loan-out entity shall be subject to all applicable provisions of the 2
Kentucky personal income tax and any applicable payroll or other tax provisions; 3
(18) (a) "Motion picture or entertainment production" means: 4
1. The following if filmed in whole or in part, or produced in whole or in 5
part, in the Commonwealth: 6
a. A feature-length film; 7
b. A television program; 8
c. An industrial film; or 9
d. A documentary; or 10
2. A national touring production of a Broadway show produced in 11
Kentucky. 12
(b) "Motion picture or entertainment production" does not include the filming or 13
production of obscene material or television coverage of news or athletic 14
events; 15
(19) "Obscene" has the same meaning as in KRS 531.010; 16
(20) "Person" has the same meaning as in KRS 141.010; 17
(21) (a) "Qualifying expenditure" means expenditures made in the Commonwealth for 18
the following if directly used in or for a motion picture or entertainment 19
production: 20
1. The production script and synopsis; 21
2. Set construction and operations, wardrobe, accessories, and related 22
services; 23
3. Lease or rental of real property in Kentucky as a set location; 24
4. Photography, sound synchronization, lighting, and related services; 25
5. Editing and related services; 26
6. Rental of facilities and equipment; 27 UNOFFICIAL COPY 25 RS SB 1/GA
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7. Vehicle leases; 1
8. Food; and 2
9. Accommodations. 3
(b) "Qualifying expenditure" does not include Kentucky sales and use tax paid by 4
the approved company on the qualifying expenditure; 5
(22) "Qualifying payroll expenditure" means compensation paid to above-the-line crew 6
and below-the line crew while working on a motion picture or entertainment 7
production in the Commonwealth if the compensation is for services performed in 8
the Commonwealth; 9
(23) "Resident" has the same meaning as in KRS 141.010; 10
(24) "Secretary" means the secretary of the Cabinet for Economic Development; 11
(25) "Tax incentive agreement" means the agreement entered into pursuant to KRS 12
154.61-030 between the council[authority] and the approved company; and 13
(26) "Television program" means any live-action or animated production or 14
documentary, including but not limited to: 15
(a) An episodic series; 16
(b) A miniseries; 17
(c) A television movie; or 18
(d) A television pilot; 19
that is produced for distribution on television via broadcast, cable, or any digital 20
format, including but not limited to cable, satellite, internet, or mobile electronic 21
devices. 22
Section 6. KRS 154.61-020 is amended to read as follows: 23
(1) The purposes of KRS 141.383 and this subchapter are to encourage: 24
(a) The film and entertainment industry to choose locations in the 25
Commonwealth for the filming and production of motion picture or 26
entertainment productions; 27 UNOFFICIAL COPY 25 RS SB 1/GA
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(b) The development of a film and entertainment industry in Kentucky; 1
(c) Increased employment opportunities for the citizens of the Commonwealth 2
within the film and entertainment industry; and 3
(d) The development of a production and postproduction infrastructure in the 4
Commonwealth for film production and touring Broadway show production 5
facilities containing state-of-the-art technologies. 6
(2) The council[authority], together with the Department of Revenue, shall administer 7
the tax credit established by KRS 141.383, this section, and KRS 154.61-030. 8
(3) To qualify for the tax incentive provided in subsection (5) of this section, the 9
following requirements shall be met: 10
(a) For an approved company that is also a Kentucky-based company that: 11
1. Films or produces a feature-length film, television program, or industrial 12
film in whole or in part in the Commonwealth, the minimum combined 13
total of qualifying expenditures and qualifying payroll expenditures 14
shall be one hundred twenty-five thousand dollars ($125,000); 15
2. Produces a national touring production of a Broadway show in whole or 16
in part in the Commonwealth, the minimum combined total of 17
qualifying expenditures and qualifying payroll expenditures shall be 18
twenty thousand dollars ($20,000); or 19
3. Films or produces a documentary in whole or in part in the 20
Commonwealth, the minimum combined total of qualifying 21
expenditures and qualifying payroll expenditures shall be ten thousand 22
dollars ($10,000); and 23
(b) For an approved company that is not a Kentucky-based company that: 24
1. Films or produces a feature-length film, television program, or industrial 25
film in whole or in part in the Commonwealth, the minimum combined 26
total of qualifying expenditures and qualifying payroll expenditures 27 UNOFFICIAL COPY 25 RS SB 1/GA
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shall be two hundred fifty thousand dollars ($250,000); or 1
2. Films or produces a documentary in whole or in part in the 2
Commonwealth or that produces a national touring production of a 3
Broadway show, the minimum combined total of qualifying 4
expenditures and qualifying payroll expenditures shall be twenty 5
thousand dollars ($20,000). 6
(4) (a) Beginning on January 1, 2022, the total tax incentive approved under KRS 7
141.383 and this subchapter shall be limited to seventy-five million dollars 8
($75,000,000) for calendar year 2022 and each calendar year thereafter; and 9
(b) Beginning with calendar year 2024: 10
1. Twenty-five million dollars ($25,000,000) shall be allocated for all 11
approved companies with a continuous film production; and 12
2. On the first day of July of each calendar year, any unused balance of the 13
amount allocated under subparagraph 1. of this paragraph for continuous 14
film productions shall be made available for all approved companies 15
with motion picture or entertainment productions. 16
(5) (a) To qualify for the tax incentive available under KRS 141.383 and this 17
subchapter all applicants shall: 18
1. Begin filming or production in Kentucky within six (6) months of 19
approval by the council[authority]; and 20
2. Complete filming or production in Kentucky within two (2) years of the 21
filming or production start date. 22
(b) The tax credit shall be against the Kentucky income tax imposed under KRS 23
141.020 or 141.040, and the limited liability entity tax imposed under KRS 24
141.0401, and shall be refundable as provided in KRS 141.383. 25
(c) 1. For a motion picture or entertainment production or continuous film 26
production filmed or produced in its entirety in an enhanced incentive 27 UNOFFICIAL COPY 25 RS SB 1/GA
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county, the amount of the incentive shall be equal to thirty-five percent 1
(35%) of the approved company's: 2
a. Qualifying expenditures; 3
b. Qualifying payroll expenditures paid to resident and nonresident 4
below-the-line production crew; and 5
c. Qualifying payroll expenditures paid to resident and nonresident 6
above-the-line production crew not to exceed one million dollars 7
($1,000,000) in payroll expenditures per employee. 8
2. a. To the extent the approved company films or produces a motion 9
picture or entertainment production or continuous film production 10
in part in an enhanced incentive county and in part a Kentucky 11
county that is not an enhanced incentive county, the approved 12
company shall be eligible to receive the incentives provided in this 13
paragraph for those expenditures incurred in the enhanced 14
incentive county and all other expenditures shall be subject to the 15
incentives provided in paragraph (d) of this subsection. 16
b. The approved company shall track the requisite expenditures by 17
county. If the approved company can demonstrate to the 18
satisfaction of the cabinet that it is not practical to use a separate 19
accounting method to determine the expenditures by county, the 20
approved company shall determine the correct expenditures by 21
county using an alternative method approved by the cabinet. 22
(d) For a motion picture or entertainment production or continuous film 23
production filmed or produced in whole or in part in any Kentucky county 24
other than in an enhanced incentive county, the amount of the incentive shall 25
be equal to: 26
1. Thirty percent (30%) of the approved company's: 27 UNOFFICIAL COPY 25 RS SB 1/GA
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a. Qualifying expenditures; 1
b. Qualifying payroll expenditures paid to below-the-line production 2
crew that are not residents; and 3
c. Qualifying payroll expenditures paid to above-the-line production 4
crew that are not residents, not to exceed one million dollars 5
($1,000,000) in payroll expenditures per employee; and 6
2. Thirty-five percent (35%) of the approved company's: 7
a. Qualifying payroll expenditures paid to resident below-the-line 8
production crew; and 9
b. Qualifying payroll expenditures paid to resident above-the-line 10
production crew not to exceed one million dollars ($1,000,000) in 11
payroll expenditures per employee. 12
Section 7. KRS 154.61-030 is amended to read as follows: 13
(1) An eligible company shall, at least thirty (30) days prior to incurring any 14
expenditure for which recovery will be sought, file an application for tax incentives 15
with the council[authority]. The application shall include: 16
(a) The name and address of the applicant; 17
(b) Verification that the applicant is a Kentucky-based company; 18
(c) The preliminary production script or a detailed synopsis of the script; 19
(d) The locations where the filming or production will occur; 20
(e) The anticipated date on which filming or production shall begin in Kentucky; 21
(f) The anticipated date on which the applicant will complete incurring 22
expenditures in Kentucky; 23
(g) The total anticipated qualifying expenditures; 24
(h) The total anticipated qualifying payroll expenditures for resident and 25
nonresident above-the-line crew by county; 26
(i) The total anticipated qualifying payroll expenditures for resident and 27 UNOFFICIAL COPY 25 RS SB 1/GA
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nonresident below-the-line crew by county; 1
(j) The address of a Kentucky location at which records of the production will be 2
kept; 3
(k) An affirmation that if not for the incentive offered under this subchapter, the 4
eligible company would not film or produce the production in the 5
Commonwealth; and 6
(l) Any other information the council[authority] may require. 7
(2) The council[authority] shall notify the eligible company within thirty (30) days 8
after receiving the application of its status. 9
(3) Upon receipt of the application and any additional information submitted, the 10
council[authority] shall consider all submitted information and, if appropriate, 11
authorize the execution of a tax incentive agreement between the council[authority] 12
and the approved company, if the amount of anticipated tax credit from the 13
application would not make the total tax credit approved for the calendar year 14
exceed the annual tax credit cap under KRS 154.61-020(4). 15
(4) The tax incentive agreement shall include the following provisions: 16
(a) The duties and responsibilities of the parties; 17
(b) A detailed description of the motion picture or entertainment production for 18
which incentives are requested; 19
(c) The anticipated qualifying expenditures and qualifying payroll expenditures 20
for resident and nonresident above-the-line and below-the-line crews by 21
county; 22
(d) The minimum combined total of qualifying expenditures and qualifying 23
payroll expenditures necessary for the approved company to qualify for 24
incentives; 25
(e) That the approved company shall: 26
1. Begin filming or production in Kentucky within six (6) months of 27 UNOFFICIAL COPY 25 RS SB 1/GA
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approval by the council[authority]; and 1
2. Complete production in Kentucky within two (2) years of their 2
production start date; 3
(f) That the motion picture or entertainment production shall not include obscene 4
materials and shall not negatively impact the economy or the tourism industry 5
of the Commonwealth; 6
(g) That the execution of the agreement is not a guarantee of tax incentives and 7
that actual receipt of the incentives shall be contingent upon the approved 8
company meeting the requirements established by the tax incentive 9
agreement; 10
(h) That the approved company shall submit to the council[authority] within one 11
hundred eighty (180) days of the completion of production in Kentucky for 12
the motion picture or entertainment production a detailed cost report of the 13
qualifying expenditures, qualifying payroll expenditures, and the latest 14
version of the production script at the time of cost report submission; 15
(i) That the approved company shall provide the council[authority] with 16
documentation that the approved company or the associated loan-out entity 17
has withheld income tax as required by KRS 141.310 or the individual income 18
tax rate imposed by KRS 141.020 on all qualified payroll expenditures for 19
which an incentive under this subchapter is sought; 20
(j) That, if the council[authority] determines that the approved company has 21
failed to comply with any of its obligations under the tax incentive agreement: 22
1. The council[authority] may deny the incentives available to the 23
approved company; 24
2. Both the council[authority] and the Department of Revenue may pursue 25
any remedy provided under the tax incentive agreement; 26
3. The council[authority] may terminate the tax incentive agreement; and 27 UNOFFICIAL COPY 25 RS SB 1/GA
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4. Both the council[authority] and the Department of Revenue may pursue 1
any other remedy at law to which it may be entitled; 2
(k) That the council[authority] and the Department of Revenue shall monitor the 3
tax incentive agreement; 4
(l) That the approved company shall provide to the council[authority] and the 5
Department of Revenue all information necessary to monitor the tax incentive 6
agreement; 7
(m) That the council[authority] may share information with the Department of 8
Revenue and the Interim Joint Committee on Appropriations and Revenue or 9
any other entity the council[authority] determines is necessary for the 10
purposes of monitoring and enforcing the terms of the tax incentive 11
agreement; 12
(n) That the motion picture or entertainment production shall contain an 13
acknowledgment that the motion picture or entertainment production was 14
produced or filmed in the Commonwealth of Kentucky; 15
(o) That the approved company shall include screen credits in its final production, 16
indicating the approved company received tax incentives from the 17
Commonwealth of Kentucky; 18
(p) Terms of default; 19
(q) The method and procedures by which the approved company shall request and 20
receive the incentive provided under KRS 141.383 and 154.61-020; 21
(r) That the approved company may be required to pay an administrative fee as 22
authorized under subsection (5) of this section; and 23
(s) Any other provisions deemed necessary or appropriate by the parties to the tax 24
incentive agreement. 25
(5) The council[authority] may require the approved company to pay an administrative 26
fee, the amount of which shall be established by administrative regulation 27 UNOFFICIAL COPY 25 RS SB 1/GA
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promulgated in accordance with KRS Chapter 13A. The administrative fee shall not 1
exceed one-half of one percent (0.5%) of the estimated amount of tax incentive 2
sought or five hundred dollars ($500), whichever is greater. 3
(6) Prior to commencement of activity as provided in a tax incentive agreement, the tax 4
incentive agreement shall be approved by the council[authority]. Following 5
approval by the council[authority], the tax incentive agreement shall be submitted 6
to the Government Contract Review Committee established by KRS 45A.705 for 7
review, as provided in KRS 45A.695, 45A.705, and 45A.725. 8
(7) The council[authority] shall notify the Department of Revenue following approval 9
of an approved company. The notification shall include the name of the approved 10
company, the name of the motion picture or entertainment production, the estimated 11
amount of qualifying expenditures, the estimated date on which the approved 12
company will complete filming or production in Kentucky, and any other 13
information required by the department. 14
(8) Within one hundred eighty days (180) days of completion of production in 15
Kentucky for the motion picture or entertainment production, the approved 16
company shall submit to the council[authority] a detailed cost report of: 17
(a) Qualifying expenditures; 18
(b) Qualifying payroll expenditures for resident and nonresident above-the-line 19
crew by county; 20
(c) Qualifying payroll expenditures for resident and nonresident below-the-line 21
crew by county; and 22
(d) The latest version of the production script available at the time of cost report 23
submission. 24
(9) (a) Cabinet staff shall review all information submitted for accuracy and shall 25
confirm that all relevant provisions of the tax incentive agreement have been 26
met. 27 UNOFFICIAL COPY 25 RS SB 1/GA
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(b) Upon confirmation that all requirements of the tax incentive agreement have 1
been met, cabinet staff shall review the latest version of the production script 2
available at the time of cost report submission, and if they determine that the 3
motion picture or entertainment production does not: 4
1. Contain visual or implied scenes that are obscene; or 5
2. Negatively impact the economy or the tourism industry of the 6
Commonwealth; 7
the council[authority] shall forward the detailed cost report to the Department 8
of Revenue for calculation of the refundable credit. 9
(10) The Department of Revenue shall: 10
(a) Verify that the approved company withheld the proper amount of income tax 11
on qualifying payroll expenditures; and 12
(b) Notify the council[authority] of the total amount of refundable credit 13
available on qualifying expenditures and qualifying payroll expenditures. 14
Section 8. Notwithstanding subsection (3)(b) of Section 2 of this Act, the initial 15
terms of the Kentucky Film Leadership Council members appointed by the Governor 16
shall be staggered as follows: 17
(1) One representative of a Kentucky film production company shall serve a one-18
year term; 19
(2) The other representative of a Kentucky film production company shall serve a 20
two-year term; 21
(3) The representative of a film profession shall serve a three-year term; and 22
(4) The representative who is the head of a local or regional film commission 23
shall serve a four-year term. 24
Section 9. This Act takes effect July 1, 2025. 25