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Regular Session, 2013 ENROLLED
SENATE BILL NO. 165
BY SENATOR MARTINY
AN ACT1
To amend and reenact R.S. 47:6007(B)(9), (10), (11), (12), (13), (14), (C)(4)(b), (D)(2)(c)2
and (d) and to enact R.S. 47:6007(B)(15) and (16), and (D)(9), relative to the motion3
picture investor tax credit; to provide for definitions; to provide for production audit4
reports and requirements; to provide for submission of a production audit report prior5
to being certified as a state-certified production for application for the credit; to6
provide for a production audit report; to provide relative to notification of transfer7
or sale of tax credits; and to provide for related matters.8
Be it enacted by the Legislature of Louisiana:9
Section 1. R.S. 47:6007(B)(9), (10), (11), (12), (13), (14), (C)(4)(b), (D)(2)(c) and10
(d) are hereby amended and reenacted and R.S. 47:6007(B)(15) and (16), and (D)(9) are11
hereby enacted to read as follows:12
§6007. Motion picture investor tax credit13
* * *14
B. Definitions. For the purposes of this Section:15
* * *16
(9) "Production audit report" means an audit report issued by a17
qualified accountant who is unrelated to the motion picture production18
company and that is a report of the qualified accountant’s audit of the motion19
picture production’s cost report of production expenditures. The production20
audit report shall contain an opinion from the qualified accountant stating that21
the production’s cost report of production expenditures presents fairly, in all22
material aspects, the production expenditures expended in Louisiana pursuant23
to the provisions of this Section. The production audit shall require:24
(a) The production audit report to be performed in accordance with the25
auditing standards generally accepted in the United States.26
(b) The production audit report to be addressed to the party which has27
ACT No. 178 SB NO. 165 ENROLLED
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engaged the qualified accountant.1
(c) The production audit report to contain the qualified accountant's2
name, address, and telephone number.3
(d) The production audit report to contain a certification that the4
qualified accountant is unrelated to the motion picture production company.5
(e) The production audit report to be dated as of the date of completion6
of the qualified accountant's field work.7
(f) The production audit report to contain a statement of8
acknowledgment by the qualified accountant that the state is relying on the9
qualified cost report in the issuance of the tax credits under the provisions of10
this Section.11
(10) "Production expenditures" means preproduction, production, and12
postproduction expenditures in this state directly relating to a state-certified13
production, including without limitation the following: set construction and14
operation; wardrobes, makeup, accessories, and related services; costs associated15
with photography and sound synchronization, lighting, and related services and16
materials; editing and related services; rental of facilities and equipment; leasing of17
vehicles; costs of food and lodging; digital or tape editing, film processing, transfer18
of film to tape or digital format, sound mixing, special and visual effects; and19
payroll. This term shall not include expenditures for marketing and distribution, non-20
production related overhead, amounts reimbursed by the state or any other21
governmental entity, costs related to the transfer of tax credits, amounts that are paid22
to persons or entities as a result of their participation in profits from the exploitation23
of the production, the application fee, or state or local taxes.24
(11) "Qualified accountant" means an independent certified public25
accountant authorized to practice in this state who has sufficient knowledge of26
accounting principles and practices generally recognized in the film and27
television industry.28
(10) (12) "Resident" or "resident of Louisiana" means a natural person29
domiciled in the state. A person who maintains a permanent place of abode within30 SB NO. 165 ENROLLED
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the state and spends in the aggregate more than six months of each year within the1
state shall be presumed to be domiciled in the state.2
(11) (13) "Secretary" means the secretary of the Department of Economic3
Development.4
(12) (14) "Source within the state" means a physical facility in Louisiana,5
operating with posted business hours and employing at least one full-time equivalent6
employee.7
(13) (15) "State" means the state of Louisiana.8
(14) (16) "State-certified production" shall mean a production approved by9
the office and the secretary which is produced by a motion picture production10
company domiciled and headquartered in Louisiana and which has a viable multi-11
market commercial distribution plan.12
* * *13
C. Investor tax credit; specific productions and projects.14
* * *15
(4) Transferability of the credit. Any motion picture tax credits not16
previously claimed by any taxpayer against its income tax may be transferred or sold17
to another Louisiana taxpayer or to the office, subject to the following conditions:18
* * *19
(b) Transferors and transferees shall submit to the office, and to the20
Department of Revenue in writing, a notification of any transfer or sale of tax credits21
within thirty ten days after the transfer or sale of such tax credits. The notification22
shall include the transferor's tax credit balance prior to transfer, a copy of any tax23
credit certification letter(s) issued by the office and the secretary of the Department24
of Economic Development and, the transferor's remaining tax credit balance after25
transfer, all tax identification numbers for both transferor and transferee, the date of26
transfer, the amount transferred, a copy of the credit certificate, price paid by the27
transferee to the transferor, in the case when the transferor is a state-certified28
production, for the tax credits, and any other information required by the office or29
the Department of Revenue. For the purpose of reporting transfer prices, the term30 SB NO. 165 ENROLLED
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"transfer" shall include allocations pursuant to Paragraph (2) of this Subsection as1
provided by rule. The office may post on its website an average tax credit transfer2
value, as determined by the office and the secretary of the Department of Economic3
Development to reflect adequately the current average tax credit transfer value. The4
tax credit transfer value means the percentage as determined by the price paid by the5
transferee to the transferor divided by the dollar value of the tax credits that were6
transferred in return. The notification submitted to the office Department of7
Revenue shall include a processing fee of up to two hundred dollars per transferee,8
and any pricing information submitted by a transferor or transferee shall be treated9
by the office and the Department of Revenue as proprietary to the entity reporting10
such information and therefore confidential. However, this shall not prevent the11
publication of summary data that includes no fewer than three transactions.12
* * *13
D. Certification and administration.14
* * *15
(2)(a) * * *16
(c) The office and the secretary shall submit their initial certification, or17
written denial of a project as a state-certified production to investors and to the18
secretary of the Department of Revenue indicating the total base investment which19
shall be expended in the state on the state-certified production within sixty days of20
their receipt of all required information. The initial certification shall include a21
unique identifying number for each state-certified production.22
(d)(i) Prior to any final certification of the state-certified production, the23
motion picture production company shall submit to the office and the secretary an24
audit of the production expenditures certified by an independent certified public25
accountant as determined by rule a production audit report. The office and the26
secretary shall review the audit, the production expense details, production audit27
report and may require additional information needed to make a determination.28
Upon approval of the audit Within one hundred twenty days of the receipt of the29
production audit report and all required supporting information, the office and30 SB NO. 165 ENROLLED
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the secretary shall issue a final tax credit certification letter indicating the amount of1
tax credits certified for the state-certified production to the investors for all2
qualifying expenditures verified by the office. Any expenditures for which tax3
credits were neither denied nor certified due to insufficient information or other4
issues, the office and secretary shall diligently work to resolve the outstanding5
issues in a timely manner, and the office and secretary may subsequently issue6
a supplemental tax credit certification at the time of such resolution. 7
(ii) The department may request an additional production audit report8
of the expenditures submitted by the motion picture production company with9
the cost of the additional report paid by the motion picture production10
company. The motion picture production company may submit an amended11
production audit report if additional expenditures are incurred or discovered12
after the approval of the initial production audit reports issued pursuant to13
Item (i) of this Subparagraph, and the office and secretary may issue a14
supplemental tax credit certification if so warranted. The rules required by this15
Subparagraph shall, at a minimum, require that:16
(i) The auditor shall be a certified public accountant licensed in the state of17
Louisiana and shall be an independent third party, not related to the producer.18
(ii) The auditor's opinion shall be addressed to the party which has engaged19
the auditor (e.g., directors of the production company, producer of the production).20
(iii) The auditor's name, address, and telephone number shall be evident on21
the report.22
(iv) The auditor's opinion shall be dated as of the completion of the audit23
fieldwork.24
(v) The audit shall be performed in accordance with auditing standards25
generally accepted in the United States of America and the auditor shall have26
sufficient knowledge of accounting principles and practices generally recognized in27
the film and television industry.28
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(9) It is recognized that, while legitimate related party transactions often30 SB NO. 165 ENROLLED
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occur as production expenditures, some related party transactions may be1
conducted in such a manner as to abuse the purpose and intent of the program.2
The secretary of the Department of Economic Development and the office shall3
promulgate rules regarding related party transactions in accordance with the4
Administrative Procedure Act.5
PRESIDENT OF THE SENATE
SPEAKER OF THE HOUSE OF REPRESENTATIVES
GOVERNOR OF THE STATE OF LOUISIANA
APPROVED: