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Maryland House Bill HB270

Maryland 2023 Regular Session

Maryland House Bill HB270 Compare Versions

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33 EXPLANATION: CAPITALS INDICATE MAT TER ADDED TO EXISTIN G LAW.
44 [Brackets] indicate matter deleted from existing law.
5- Underlining indicates amendments to bill.
6- Strike out indicates matter stricken from the bill by amendment or deleted from the law by
7-amendment.
85 *hb0270*
96
107 HOUSE BILL 270
118 Q3 3lr0508
129 HB 432/22 – W&M
1310 By: Delegate Wells
1411 Introduced and read first time: January 25, 2023
1512 Assigned to: Ways and Means
16-Committee Report: Favorable with amendments
17-House action: Adopted
18-Read second time: March 5, 2023
1913
20- CHAPTER ______
14+ A BILL ENTITLED
2115
2216 AN ACT concerning 1
2317
24-Income Tax – Film Production Activity Income Tax Credit – Alterations and 2
25-Maryland Entertainment Council 3
18+Income Tax – Film Production Activity Tax Credit – Alterations 2
2619
27-FOR the purpose of altering the aggregate amount of film production activity tax credit 4
28-certificates that the Secretary of Commerce may issue each fiscal year; establishing 5
29-the Maryland Entertainment Council to study and make recommendations 6
30-regarding Maryland’s film, television, and entertainment industry; and generally 7
31-relating to the film production activity tax credit and the Maryland Entertainment 8
32-Council. 9
20+FOR the purpose of altering the aggregate amount of film production activity tax credit 3
21+certificates that the Secretary of Commerce may issue each fiscal year; and generally 4
22+relating to the film production activity tax credit. 5
3323
34-BY repealing and reenacting, without amendments, 10
35- Article – Tax – General 11
36-Section 10–730(a)(1), (4), and (7) and (b) 12
37- Annotated Code of Maryland 13
38- (2022 Replacement Volume) 14
24+BY repealing and reenacting, without amendments, 6
25+ Article – Tax – General 7
26+Section 10–730(a)(1), (4), and (7) and (b) 8
27+ Annotated Code of Maryland 9
28+ (2022 Replacement Volume) 10
3929
40-BY repealing and reenacting, with amendments, 15
41- Article – Tax – General 16
42-Section 10–730(f) 17
43- Annotated Code of Maryland 18
44- (2022 Replacement Volume) 19
30+BY repealing and reenacting, with amendments, 11
31+ Article – Tax – General 12
32+Section 10–730(f) 13
33+ Annotated Code of Maryland 14
34+ (2022 Replacement Volume) 15
4535
46- SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 20
47-That the Laws of Maryland read as follows: 21
48- 2 HOUSE BILL 270
36+ SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 16
37+That the Laws of Maryland read as follows: 17
4938
39+Article – Tax – General 18
5040
51-Article – Tax – General 1
41+10–730. 19
5242
53-10–730. 2
43+ (a) (1) In this section the following words have the meanings indicated. 20
5444
55- (a) (1) In this section the following words have the meanings indicated. 3
45+ (4) (i) “Film production activity” means: 21
5646
57- (4) (i) “Film production activity” means: 4
58-
59- 1. the production of a film or video project that is intended 5
60-for nationwide commercial distribution; and 6
61-
62- 2. for a television series, each season of the television series. 7
63-
64- (ii) “Film production activity” includes the production of: 8
65-
66- 1. a feature film; 9
67-
68- 2. a television project; 10
69-
70- 3. a commercial; 11
71-
72- 4. a corporate film; 12
73-
74- 5. a music video; or 13
75-
76- 6. a digital animation project. 14
77-
78- (iii) “Film production activity” does not include production of: 15
79-
80- 1. a student film; 16
81-
82- 2. a noncommercial personal video; 17
83-
84- 3. a sports broadcast; 18
85-
86- 4. a broadcast of a live event; 19
87-
88- 5. a talk show; 20
89-
90- 6. a video, computer, or social networking game; 21
91-
92- 7. pornography; 22
93-
94- 8. an infomercial; 23
95-
96- 9. a digital project or an animation project other than a 24
97-digital animation project; or 25 HOUSE BILL 270 3
47+ 1. the production of a film or video project that is intended 22
48+for nationwide commercial distribution; and 23 2 HOUSE BILL 270
9849
9950
10051
101- 10. a multimedia project. 1
52+ 2. for a television series, each season of the television series. 1
10253
103- (7) “Qualified film production entity” means an entity that: 2
54+ (ii) “Film production activity” includes the production of: 2
10455
105- (i) is carrying out a film production activity; and 3
56+ 1. a feature film; 3
10657
107- (ii) the Secretary determines to be eligible for the tax credit under 4
108-this section in accordance with subsection (c) of this section. 5
58+ 2. a television project; 4
10959
110- (b) (1) A qualified film production entity may claim a credit against the State 6
111-income tax for film production activities in the State in an amount equal to the amount 7
112-stated in the final tax credit certificate approved by the Secretary for film production 8
113-activities. 9
60+ 3. a commercial; 5
11461
115- (2) If the tax credit allowed under this section in any taxable year exceeds 10
116-the total tax otherwise payable by the qualified film production entity for that taxable year, 11
117-the qualified film production entity may claim a refund in the amount of the excess. 12
62+ 4. a corporate film; 6
11863
119- (f) (1) Except as provided in paragraph (2) of this subsection, the Secretary 13
120-may not issue tax credit certificates for credit amounts in the aggregate totaling more than: 14
64+ 5. a music video; or 7
12165
122- (i) for fiscal year 2014, $25,000,000; 15
66+ 6. a digital animation project. 8
12367
124- (ii) for fiscal year 2015, $7,500,000; 16
68+ (iii) “Film production activity” does not include production of: 9
12569
126- (iii) for fiscal year 2016, $7,500,000; 17
70+ 1. a student film; 10
12771
128- (iv) for fiscal year 2019, $8,000,000; 18
72+ 2. a noncommercial personal video; 11
12973
130- (v) for fiscal year 2020, $11,000,000; [and] 19
74+ 3. a sports broadcast; 12
13175
132- (vi) for EACH OF fiscal [year] YEARS 2021 [and each fiscal year 20
133-thereafter] THROUGH 2023, $12,000,000; 21
76+ 4. a broadcast of a live event; 13
13477
135- (VII) FOR FISCAL YEAR 2024, $25,000,000; AND 22
78+ 5. a talk show; 14
13679
137- (VII) FOR EACH OF FISCAL Y EARS 2024 THROUGH 2026, 23
138-$15,000,000; AND 24
80+ 6. a video, computer, or social networking game; 15
13981
140- (VIII) FOR FISCAL YEAR 2025 2027 AND EACH FISCAL YEAR 25
141-THEREAFTER , $50,000,000 $12,000,000. 26
82+ 7. pornography; 16
14283
143- (2) If the aggregate credit amounts under the tax credit certificates issued 27
144-by the Secretary total less than the maximum provided under paragraph (1) of this 28 4 HOUSE BILL 270
84+ 8. an infomercial; 17
85+
86+ 9. a digital project or an animation project other than a 18
87+digital animation project; or 19
88+
89+ 10. a multimedia project. 20
90+
91+ (7) “Qualified film production entity” means an entity that: 21
92+
93+ (i) is carrying out a film production activity; and 22
94+
95+ (ii) the Secretary determines to be eligible for the tax credit under 23
96+this section in accordance with subsection (c) of this section. 24
97+ HOUSE BILL 270 3
14598
14699
147-subsection in any fiscal year, any excess amount may be carried forward and issued under 1
148-tax credit certificates in a subsequent fiscal year. 2
100+ (b) (1) A qualified film production entity may claim a credit against the State 1
101+income tax for film production activities in the State in an amount equal to the amount 2
102+stated in the final tax credit certificate approved by the Secretary for film production 3
103+activities. 4
149104
150- (3) The Secretary may not issue tax credit certificates for credit amounts 3
151-totaling more than $10,000,000 in the aggregate for a single film production activity. 4
105+ (2) If the tax credit allowed under this section in any taxable year exceeds 5
106+the total tax otherwise payable by the qualified film production entity for that taxable year, 6
107+the qualified film production entity may claim a refund in the amount of the excess. 7
152108
153- (4) (i) For fiscal year 2019 and each fiscal year thereafter, the Secretary 5
154-shall make 10% of the credit amount authorized under paragraph (1) of this subsection 6
155-available for Maryland small or independent film entities. 7
109+ (f) (1) Except as provided in paragraph (2) of this subsection, the Secretary 8
110+may not issue tax credit certificates for credit amounts in the aggregate totaling more than: 9
156111
157- (ii) If the total amount of credits applied for by Maryland small or 8
158-independent film entities is less than the amount made available under subparagraph (i) 9
159-of this paragraph, the Secretary shall make available the unused amount of credits for use 10
160-by qualified film production entities. 11
112+ (i) for fiscal year 2014, $25,000,000; 10
161113
162- SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect July 12
163-1, 2023, and shall be applicable to all taxable years beginning after December 31, 2022. 13
114+ (ii) for fiscal year 2015, $7,500,000; 11
164115
165- SECTION 2. AND BE IT FURTHER ENACTED, That: 14
116+ (iii) for fiscal year 2016, $7,500,000; 12
166117
167- (a) There is a Maryland Entertainment Council. 15
118+ (iv) for fiscal year 2019, $8,000,000; 13
168119
169- (b) (1) Subject to paragraph (2) of this subsection, the Council consists of: 16
120+ (v) for fiscal year 2020, $11,000,000; [and] 14
170121
171- (i) one member of the Senate of Maryland, appointed by the 17
172-President of the Senate; 18
122+ (vi) for EACH OF fiscal [year] YEARS 2021 [and each fiscal year 15
123+thereafter] THROUGH 2023, $12,000,000; 16
173124
174- (ii) one member of the House of Delegates, appointed by the Speaker 19
175-of the House; 20
125+ (VII) FOR FISCAL YEAR 2024, $25,000,000; AND 17
176126
177- (iii) the Governor’s appointed Senior Advisor on Film, Television, and 21
178-Entertainment; and 22
127+ (VIII) FOR FISCAL YEAR 2025 AND EACH FISCAL YEAR 18
128+THEREAFTER , $50,000,000. 19
179129
180- (iv) the following members, appointed by the Governor: 23
130+ (2) If the aggregate credit amounts under the tax credit certificates issued 20
131+by the Secretary total less than the maximum provided under paragraph (1) of this 21
132+subsection in any fiscal year, any excess amount may be carried forward and issued under 22
133+tax credit certificates in a subsequent fiscal year. 23
181134
182- 1. one expert in the business of the film, television, and 24
183-entertainment industry, such as an executive, producer, studio representative, or an 25
184-individual holding a leadership role within the industry; 26
135+ (3) The Secretary may not issue tax credit certificates for credit amounts 24
136+totaling more than $10,000,000 in the aggregate for a single film production activity. 25
185137
186- 2. one expert in workforce development or higher education 27
187-related to the film, television, and entertainment industry; 28
138+ (4) (i) For fiscal year 2019 and each fiscal year thereafter, the Secretary 26
139+shall make 10% of the credit amount authorized under paragraph (1) of this subsection 27
140+available for Maryland small or independent film entities. 28
188141
189- 3. one expert in emerging technologies or specialties of the 29
190-film, television, and entertainment industry, such as an expert in gaming, artificial 30
191-intelligence, visual effects, animation, post–production, or another related specialty; 31
192- HOUSE BILL 270 5
193-
194-
195- 4. one expert in legal or policy fields specific to the film, 1
196-television, and entertainment industry; 2
197-
198- 5. one representative of the independent film and television 3
199-community; and 4
200-
201- 6. one representative of nongovernmental entities or 5
202-philanthropic institutions that support film, television, or entertainment directly or 6
203-creative economies more broadly. 7
204-
205- (2) The Governor may appoint up to three additional individuals as 8
206-honorary cochairs of the Council who are: 9
207-
208- (i) individuals with extraordinary cultural capital and commanding 10
209-significant influence within the film, television, and entertainment industry; 11
210-
211- (ii) business leaders commanding a significant stake within the film, 12
212-television, and entertainment industry; or 13
213-
214- (iii) individuals who have defined the current cultural brand of the 14
215-film, television, and entertainment industry within the State. 15
216-
217- (3) An individual appointed as an honorary cochair of the Council shall be 16
218-a nonvoting member of the Council whose responsibilities shall be limited to the promotion 17
219-and business development of Maryland’s film, television, and entertainment industry. 18
220-
221- (c) The Senior Advisor on Film, Television, and Entertainment shall chair the 19
222-Council. 20
223-
224- (d) The Department of Commerce shall provide staff for the Council. 21
225-
226- (e) A member of the Council: 22
227-
228- (1) may not receive compensation as a member of the Council; but 23
229-
230- (2) is entitled to reimbursement for expenses under the Standard State 24
231-Travel Regulations, as provided in the State budget. 25
232-
233- (f) The Council shall: 26
234-
235- (1) assess Maryland’s existing assets, opportunities, and competitive 27
236-position within the film, television, and entertainment industry; 28
237-
238- (2) study: 29
239-
240- (i) Maryland’s State, local, and private assets that currently 30
241-support Maryland’s film, television, and entertainment industry, including key 31 6 HOUSE BILL 270
242-
243-
244-infrastructure, existing workforce, workforce pipelines, scenic profile, emerging specialties, 1
245-and independent creative communities; 2
246-
247- (ii) existing State programs, agencies, offices, grant programs, and 3
248-commissions across State agencies that support the film, television, and entertainment 4
249-industry; 5
250-
251- (iii) models, competitive profiles, methods, and legislation that states 6
252-have utilized to incentivize necessary infrastructure and workforce to support the film, 7
253-television, and entertainment industry; 8
254-
255- (iv) industry needs, disruptive trends, and emerging technologies 9
256-within the film, television, and entertainment industry; and 10
257-
258- (v) complementary industries, aligned businesses, and potential 11
259-corporate, philanthropic, and other partners for the film, television, and entertainment 12
260-industry; and 13
261-
262- (3) make recommendations on the development of a coordinated, 14
263-comprehensive strategic plan to position Maryland as an emerging leader in the film, 15
264-television, and entertainment industry. 16
265-
266- (g) On or before December 1, 2023, the Council shall submit a preliminary report 17
267-to the Governor, the Secretary of Commerce, and, in accordance with § 2–1257 of the State 18
268-Government Article, the General Assembly that includes: 19
269-
270- (1) an assessment of Maryland’s existing infrastructure, creative profile, 20
271-and core structural advantages that the State is uniquely positioned to leverage; 21
272-
273- (2) recommendations on how to best utilize existing State offices, 22
274-commissions, and programs to advance Maryland’s film, television, and entertainment 23
275-industry and what, if any, additional investments should be made to support these State 24
276-functions; 25
277-
278- (3) a clear definition of Maryland’s creative and competitive profile; and 26
279-
280- (4) recommendations to measure the economic impact of additional 27
281-investment in the film, television, and entertainment industry. 28
282-
283- (h) On or before September 1, 2024, the Council shall submit its final report to 29
284-the Governor, the Secretary of Commerce, and, in accordance with § 2–1257 of the State 30
285-Government Article, the General Assembly on: 31
286-
287- (1) the matters included in the Council’s preliminary report; 32
288- HOUSE BILL 270 7
289-
290-
291- (2) recommendations to strengthen the structure and funding of the State’s 1
292-existing film and theatrical production incentives to ensure a greater return on investment 2
293-on Maryland’s investment in the film, television, and entertainment industry; 3
294-
295- (3) recommendations for additional State investment to bolster identified 4
296-specialties and high–leverage growth opportunities in the film, television, and 5
297-entertainment industry; 6
298-
299- (4) recommendations to support and grow Maryland’s independent 7
300-creative community and incentivize export promotions of Maryland–based talent; 8
301-
302- (5) methods to bolster film–, television–, and entertainment–related 9
303-business development and identify potential industry partnerships; 10
304-
305- (6) methods to sustainably grow the film, television, and entertainment 11
306-workforce and identify potential workforce development and higher education partners; 12
307-and 13
308-
309- (7) other recommendations, as appropriate, to support and grow the 14
310-economic impact of Maryland’s film, television, and entertainment industry. 15
311-
312- SECTION 3. AND BE IT FURTHER ENACTED, That Section 1 of this Act shall be 16
313-applicable to all taxable years beginning after December 31, 2022. 17
314-
315- SECTION 4. AND BE IT FURTHER ENACTED, That this Act shall take effect July 18
316-1, 2023. Section 2 of this Act shall remain effective for a period of 2 years and, at the end of 19
317-June 30, 2025, Section 2 of this Act, with no further action required by the General 20
318-Assembly, shall be abrogated and of no further force and effect. 21
142+ (ii) If the total amount of credits applied for by Maryland small or 29
143+independent film entities is less than the amount made available under subparagraph (i) 30
144+of this paragraph, the Secretary shall make available the unused amount of credits for use 31
145+by qualified film production entities. 32 4 HOUSE BILL 270
319146
320147
321148
149+ SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect July 1
150+1, 2023, and shall be applicable to all taxable years beginning after December 31, 2022. 2
322151
323-Approved:
324-________________________________________________________________________________
325- Governor.
326-________________________________________________________________________________
327- Speaker of the House of Delegates.
328-________________________________________________________________________________
329- President of the Senate.