HLS 23RS-391 ENGROSSED
2023 Regular Session
HOUSE BILL NO. 562
BY REPRESENTATIVE SCHEXNAYDER
TAX CREDITS: Provides relative to the Motion Picture Production Tax Credit
1 AN ACT
2To amend and reenact R.S. 47:6007(B)(11), (C)(4)(h)(iii)(bb), (D)(2)(c)(i) and (d)(i), (I),
3 and (J)(1), relative to the motion picture production tax credit; to provide relative to
4 Louisiana promotional graphics requirements for productions; to provide relative to
5 uses of the Louisiana Entertainment Development Dedicated Fund Account; to
6 provide relative to expenditure data collection; to provide with respect to the
7 Department of Economic Development program issuance cap; to remove certain
8 limitations with respect to the issuance cap; to extend the sunset date of the tax
9 credit; and to provide for related matters.
10Be it enacted by the Legislature of Louisiana:
11 Section 1. R.S. 47:6007(B)(11), (C)(4)(h)(iii)(bb), (D)(2)(c)(i) and (d)(i), (I), and
12(J)(1) are hereby amended and reenacted to read as follows:
13 ยง6007. Motion picture production tax credit
14 B. Definitions. For the purposes of this Section:
15 * * *
16 (11) "Louisiana promotional graphic" means a graphical brand or logo for
17 promotion of the state which has been approved by the office. for a production and
18 consists of the following:
19 (a) Either of the following:
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1 (i) Up to a five-second long static or animated graphic that promotes
2 Louisiana in the end credits before the below-the-line crew crawl for the life of the
3 production.
4 (ii) Up to a five-second long static or animated embedded graphic that
5 promotes Louisiana during each broadcast worldwide, in the end credits before the
6 below-the-line crew crawl for the life of the production.
7 (b) An electronic press kit or a customized video for use by the office or an
8 alternative asset as determined by the office.
9 * * *
10 C. Production tax credit; specific productions and projects.
11 * * *
12 (4) Transferability of the credit. Except as provided for in Subparagraph (g)
13 of this Paragraph, motion picture tax credits not previously claimed by any taxpayer
14 against its income tax may be transferred or sold to another Louisiana taxpayer or
15 to the Department of Revenue, subject to the following conditions:
16 * * *
17 (h)
18 * * *
19 (iii) The money in the account shall be appropriated by the legislature as
20 follows:
21 * * *
22 (bb) Seventy-five percent to the Department of Economic Development,
23 office for motion picture and television education development initiatives, matching
24 grants for Louisiana filmmakers, a loan guarantee program, and a deal closing fund.
25 Louisiana workforce development programs, and other motion picture and television
26 related programs as determined by rule.
27 * * *
28 D. Certification and administration.
29 * * *
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1 (2)
2 * * *
3 (c)(i) In order to protect the integrity of the motion picture investor tax credit
4 program by ensuring that tax credits are certified only for eligible expenditures and
5 to provide for uniformity in expenditure verification reporting, the department shall
6 directly engage and assign an independent certified public accountant, hereinafter
7 referred to as "CPA", to prepare, for the department, the required production
8 expenditure verification report on a tax credit applicant's cost report of expenditures
9 or claims. The applicant shall be responsible for and assessed any production
10 expenditure verification report fee that may be required by law, including any
11 up-front deposit of the fee. For purposes of the report, the applicant shall make all
12 records related to the tax credit application available to the CPA. For applications
13 received on or after July 1, 2023, these records shall include a listing of all Louisiana
14 expenditures detailing the date of the expenditure, the vendor's address including the
15 zip code, and the amount of the expenditure.
16 * * *
17 (d)(i) Project-based production tax credit. After application review and
18 consideration of all discretionary factors, the office and the secretary shall submit
19 their initial certification or written denial of a project as a state-certified production
20 to investors and to the secretary of the Department of Revenue indicating the total
21 base investment which shall be expended in the state on the state-certified production
22 within sixty days of their receipt of all required information. The initial certification
23 shall include a unique identifying number for each state-certified production and
24 shall provide for a preliminary allocation of tax credits by year.
25 * * *
26 I. No credits shall be allowed pursuant to this Section for applications
27 received on or after July 1, 2025 2035.
28 J. Credit caps, structured pay outs, and project size limitations.
29 (1) Department of Economic Development program issuance cap.
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1 (a) The department shall by rule establish the method of provisionally
2 allocating available tax credits in initial certification letters, and the method for
3 granting tax credits in final tax credit certification letters, including but not limited
4 to a first-come, first-served system, reservation of tax credits for a specific time
5 period, or other method which the department, in its discretion, may find beneficial
6 to the program.
7 (b) For applications for state-certified productions and qualified
8 entertainment companies submitted on or after July 1, 2017, but prior to July 1, 2023,
9 the total amount of all tax credits granted in a final certification letter by the
10 department in any fiscal year shall not exceed one hundred fifty million dollars.
11 Twenty percent of the annual program cap shall be reserved as follows: five percent
12 for qualified entertainment companies, five percent for Louisiana screenplay
13 productions, and ten percent for independent film productions. If the total amount
14 of credits applied for in any particular year exceeds the aggregate amount of tax
15 credits allowed for that year, the excess shall be treated as having been applied for
16 on the first day of the subsequent year.
17 (c) (i) If the total amount of credits granted to QECs in any fiscal year is less
18 than the QEC cap, any residual amount of unused credits shall carry forward for use
19 in subsequent years and may be granted in addition to the QEC cap for each year.
20 (ii) If the total amount of credits granted in any fiscal year to screenplay
21 productions or independent film productions is less than their respective caps, any
22 residual amount may be available for issuance by the department during that fiscal
23 year as established by rule.
24 (d) (iii) The department shall make reasonable efforts to post a listing of
25 estimated amounts available under the cap on its website.
26 (c) For applications for state-certified productions and qualified
27 entertainment companies submitted on or after July 1, 2023, the total amount of all
28 tax credits granted in a final certification letter by the department in any fiscal year
29 shall not exceed one hundred fifty million dollars. If the total amount of credits
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1 applied for in any particular year exceeds the aggregate amount of tax credits
2 allowed for that year, the excess shall be treated as having been applied for on the
3 first day of the subsequent year.
4 * * *
DIGEST
The digest printed below was prepared by House Legislative Services. It constitutes no part
of the legislative instrument. The keyword, one-liner, abstract, and digest do not constitute
part of the law or proof or indicia of legislative intent. [R.S. 1:13(B) and 24:177(E)]
HB 562 Engrossed 2023 Regular Session Schexnayder
Abstract: Extends the sunset of the motion picture production tax credit from July 1, 2025,
to July 1, 2035, and expands the definition of a "La. promotional graphic".
Present law authorizes the following tax credits for state-certified productions:
(1)A 25% tax credit if the base investment is in excess of $300,000 or if the production
is a La. screenplay production.
(2)An additional 5% base investment credit for projects filmed outside the New Orleans
Metro Zone, but not including St. John the Baptist Parish.
(3)An additional 10% base investment credit for certain expenditures equal to or greater
than $50,000 but less than $5 million for projects meeting certain La. screenplay
criteria.
(4)A 15% credit for La. resident payroll expenditures.
(5)A 5% credit for certain La.-based visual effects expenditures meeting certain
requirements.
Proposed law retains present law.
Present law defines a "La. promotional graphic" as a graphical brand or logo for promotion
of the state that has been approved by the office of entertainment industry development in
the Dept. of Economic Development (DED), hereinafter "office", and requires productions
to acknowledge the financial assistance of the state, either through the inclusion of a La.
promotional graphic or an alternative marketing option approved by the office.
Proposed law expands the definition of "La. promotional graphic" to include an electronic
press kit or a customized video for use by the office or an alternative asset as determined by
the office and either of the following:
(1)Up to a five-second long static or animated graphic that promotes La. in the end
credits before the below-the-line crew crawl for the life of the production.
(2)Up to a five-second long static or animated embedded graphic that promotes La.
during each broadcast worldwide, in the end credits before the below-the-line crew
crawl for the life of the production.
Present law provides for a cap of $150M in any fiscal year on tax credits that may be granted
in a final certification letter by DED for state-certified productions and qualified
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entertainment companies (QEC) submitted on or after July 1, 2017. If the total amount of
credits applied for in a year exceeds the aggregate amount of tax credits allowed for that
year, the excess shall be treated as having been applied for on the first day of the subsequent
year.
Present law reserves 20% of the annual program cap as follows: 5% for qualified
entertainment companies, 5% for La. screenplay productions, and 10% for independent film
productions.
Proposed law retains present law with respect to the $150M DED program issuance cap but
repeals the reservation of tax credits in present law for state-certified productions and QEC
applications submitted on or after July 1, 2023.
Present law provides for establishment of the La. Entertainment Development Dedicated
Fund Account for deposit of fees collected by the Dept. of Revenue (DOR) pursuant to
notifications of transfer of tax credits. Present law requires 25% of the monies in the
account to be appropriated to DOR for administrative purposes and 75% of the monies to
be appropriated to the office for education development initiatives, matching grants for La.
filmmakers, a loan guarantee program, and a deal closing fund.
Proposed law retains present law but changes the use of the monies in the account
appropriated to the office by eliminating the loan guarantee program and a deal closing fund
and including La. workforce development programs, and other motion picture and television
related programs as determined by rule.
Present law requires DED to engage an independent certified public accountant to prepare
a production expenditure verification report on a tax credit applicant's cost report of
expenditures or claims. Present law further requires the applicant to make all records
available to the CPA.
Proposed law requires the records to include a listing of all La. expenditures detailing the
date of the expenditure, the vendor's address including the zip code, and the amount of the
expenditure for applications received on or after July 1, 2023.
Present law requires DED to submit an initial certification or written denial of a project as
a state-certified production to investors and the secretary of DOR within 60 days of receipt
of required information. Further requires the initial certification to include a primary
allocation of tax credits by year.
Proposed law retains present law with respect to submission of an initial certification or
written denial but repeals present law provisions with respect to inclusion of a primary
allocation of tax credits by year in an initial certification.
Present law prohibits motion picture production tax credits from being allowed for
applications received on or after July 1, 2025.
Proposed law extends the sunset of this tax credit from July 1, 2025, to July 1, 2035.
(Amends R.S. 47:6007(B)(11), (C)(4)(h)(iii)(bb), (D)(2)(c)(i) and (d)(i), (I), and (J)(1))
Summary of Amendments Adopted by House
The Committee Amendments Proposed by House Committee on Ways and Means to the
original bill:
1. Expand the definition of a "Louisiana promotional graphic".
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2. Remove provision that would have eliminated the alternative marketing option
for productions submitting an application on or after July 1, 2023.
3. Remove provision that would have eliminated the $150M Dept. of Economic
Development program issuance cap.
4. Add provision that specifies that the 20% allotment of the $150M Dept. of
Economic Development program issuance cap in present law reserved for
qualified entertainment companies (QEC), La. screenplay productions, and
independent film productions shall not apply to state-certified productions and
QEC applications submitted on or after July 1, 2023.
5. Delete the repeal of the sunset provision of this tax credit in favor of extending
the sunset from July 1, 2025, to July 1, 2035.
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