Oklahoma 2024 Regular Session

Oklahoma House Bill HB2459 Compare Versions

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Version 2 (New)

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1		-	An Act
2		-	ENROLLED HOUSE
3		-	BILL NO. 2459 By: Hill and McDugle of the
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	28	+	STATE OF OKLAHOMA
	29	+
	30	+	1st Session of the 59th Legislature (2023)
	31	+
	32	+	CONFERENCE COMMITTEE
	33	+	SUBSTITUTE
	34	+	FOR ENGROSSED
	35	+	HOUSE BILL NO. 2459 By: Hill and McDugle of the
4	36		House
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6	38		and
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8	40		Hall of the Senate
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	46	+	CONFERENCE COMMITTEE SUBSTITUTE
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15	48		An Act relating to revenue and taxation; amending 68
16	49		O.S. 2021, Sections 3632, 3635, and 3638, which
17	50		relate to the Filmed in Oklahoma Act of 2021;
18	51		modifying definitions; modifying incentive related to
19		-	certain post-production activity; prescribing limit
20		-	on incentive amounts; modifying provisions related to
21		-	appearance of logo in finished productions; providing
22		-	an effective date; and declaring an emergency.
	52	+	certain post production activity; modifying
	53	+	provisions related to appearance of logo in finished
	54	+	productions; prescribing limit on incentive amounts;
	55	+	providing an effective date; and declaring an
	56	+	emergency.
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27		-	SUBJECT: Revenue and taxation
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29	62		BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
30		-
31	63		SECTION 1. AMENDATORY 68 O.S. 2021, Section 3632, is
32	64		amended to read as follows:
33		-
34	65		Section 3632. As used in the Filmed in Oklahoma Act of 2021:
35		-
36	66		1. "Above-the-line personnel" means producers, principal cast,
37	67		screenwriters, and directors who work on production of films or
38	68		television series. The qualifying salary of above-the-line
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39	95		personnel may be included as crew, as defined in paragraph 3 of this
40	96		section, if the salaries are paid to loan -out corporations and
41	97		limited liability companies registered to do business in this state
42	98		or the salaries are paid to Oklahoma-based above-the-line personnel.
43	99		The qualifying salary of above -the-line personnel shall not comprise
44	100		more than twenty-five percent (25%) of total expenditures as defined
45		-	in paragraph 5 of this section. For purposes of this paragraph, ~~ENR. H. B. NO. 2459 Page 2~~
	101	+	in paragraph 5 of this section. For purposes of this paragraph,
46	102		"Oklahoma-based" means a company or individual with an Oklahoma
47	103		income tax requirement;
48		-
49	104		2. "Apprentice" means a person who works for a skilled or
50	105		qualified person in order to learn a trade or profes sion for an
51	106		agreed-upon period of time. An apprentice may work in any of the
52	107		trades recognized by the Oklahoma Department of Commerce as
53	108		necessary for a film production. An apprentice shall be required to
54	109		complete safety training appropriate for the duti es to be performed
55	110		in connection with a qualified project and als o to complete a course
56	111		related to and with the objective of preventing wo rkplace
57	112		misbehavior, such as bullying and sexual harassment;
58		-
59	113		3. "Crew" means any person who works on preproduction,
60	114		principal photography and postproduction post-production, with the
61	115		exception of above-the-line-personnel above-the-line personnel;
62		-
63	116		4. "Eligible television series" means a project if either
64	117		seventy-five percent (75%) of the series season is filmed within the
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65	144		state or, for an episodic television pilot, if more than seventy-
66	145		five percent (75%) of the pilot is filmed within the state;
67		-
68	146		5. "Expenditure" or "production cost" includes but is not
69	147		limited to:
70		-
71	148		a. wages or salaries of persons who are residents of this
72	149		state or who are enrolled as full -time students at a
73	150		college or university located in the state offering an
74	151		undergraduate degree program or who are on active
75	152		military duty and stati oned in Oklahoma or involved in
76	153		a restorative workforce program and who have earned
77	154		income from working on a film in this state including
78	155		payments to personal services corporations with
79	156		respect to the servi ces of qualified performing
80	157		artists, pursuant to the provisions of the Internal
81	158		Revenue Code, 26 U.S.C., Section 62(a)(2),
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83	159		b. the cost of construction and operations, wardrobe,
84	160		accessories and related services,
85		-
86	161		c. the cost of photography, sound synchroniza tion,
87	162		lighting and related services,
	163	+	d. the cost of editing and related services,
	164	+	e. rental of facilities and equipment,
	165	+	f. other direct costs of producing a film, and
88	166
89		-	d. the cost of editing and related services,
90		-	ENR. H. B. NO. 2459 Page 3
91		-	e. rental of facilities and equipment,
92		-
93		-	f. other direct costs of producing a film, and
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95	192		g. the wages and salaries of persons who are defined and
96	193		registered as an Oklahoma Expat riate by the Office of
97	194		the Oklahoma Film and Music Commission Office;
98		-
99	195		6. "Film" means a professional single media, multimedia program
100	196		or feature, which is not child pornography as defined i n subsection
101	197		A of Section 1024.1 of Title 21 of the Oklahoma Statutes or obscene
102	198		material as defined in paragraph 1 of sub section B of Section 1024.1
103	199		of Title 21 of the Oklahoma Statutes including, but not limited to,
104	200		national advertising messages that are broadcast on a national
105	201		affiliate or cable network, fixed on film or dig ital video, which
106	202		can be viewed or reproduced and which is exhibited in theaters,
107	203		licensed for exhibition by individual television stations, groups of
108	204		stations, networks, cable televi sion stations or other means or
109	205		licensed for home viewing markets. The term shall also include
110	206		filming for interactive an d video gaming including, but not limited
111	207		to, green screen, motion capture and similar production techniques;
112		-
113	208		7. "Multi-film deal" means a project in which a production
114	209		company films at least seventy-five percent (75%) of main crew
115	210		principal photography f or three (3) or more films in this state
116	211		within three (3) years or where the third film starts main crew
117	212		principal photography within the three (3) year period;
118		-
119	213		8. "Nonresident crew member" means a person who is not an
120	214		Oklahoma resident, hired for a quali fying production project
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121	241		occurring within the state and who is subject to the payment of
122	242		Oklahoma employment taxes;
123		-
124	243		9. "Production company" means a person, producer or company who
125	244		produces film for exhib ition in theaters, on television or
126	245		elsewhere;
127		-
128	246		10. "Qualified production expenditure amount" means an
129	247		expenditure defined pursuant to paragraph 5 of this section; and
130		-
131	248		11. "Qualified soundstage facility" means a state certified
132	249		industry standard soundst age facility having not less than seven
133	250		thousand five hundred (7,500) square feet of combined soundstage
134		-	space and with a total state rental cost to the production company ~~ENR. H. B. NO. 2459 Page 4~~
	251	+	space and with a total state rental cost to the production company
135	252		equal to at least one percent (1%) three percent (3%) of the
136	253		qualifying Oklahoma expenditures with respect to a production.
137		-
138	254		SECTION 2. AMENDATORY 68 O.S. 2021, Section 3635, is
139	255		amended to read as follows:
140		-
141	256		Section 3635. A. Subject to the final a pproval of the
142	257		eligibility application by the Oklahoma Department of Comm erce, a
143	258		requirement that the incentive payments made pursuant to the
144	259		provisions of this act the Filmed in Oklahoma Act of 2021 achieve
145	260		the maximum positive impact for the Oklahoma economy and subject to
146	261		the Oklahoma workforce requirements of Secti on 7 3637 of this act
147	262		title, the base incentive amount for a project filmed in this state,
148	263		not including above-the-line personnel, shall be a maximum of twenty
149	264		thirty percent (20%) (30%) of the qualified production expenditure
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150	291		amount. An incentive for a project filmed in this state for wages
151	292		paid to nonresident crew, not including above-the-line personnel,
152	293		before July 1, 2023, shall be provided in the amount of seven and
153		-	one-half percent (7.5%) for wages paid before April 1, 2023, and
	294	+	one-half percent (7.5%) for wages paid before April 1, 2023 and
154	295		twenty percent (20%) for wages paid on or after April 1, 2023.
155		-
156	296		B. In addition to the amount authorized by subsection A of this
157	297		section, there may be an additional incentive amount, sub ject to the
158	298		final approval of the Oklahoma Department of Commerce, in the
159	299		maximum amount of:
160		-
161	300		1. Three percent (3%) of the qualified production expenditure
162	301		amount for projects where at least twenty-five percent (25%) of main
163	302		crew principal photography days are filmed on location, excluding
164	303		sound stage production, in any county of this state if the county
165	304		has a population of less than two hundred fifty thousand (250,000)
166	305		persons according to the federal Federal Decennial Census or most
167	306		recent population estimate;
168		-
169	307		2. Two percent (2%) of the qualified production expenditure
170	308		amount for projects whose hub location, as determined by the
171	309		Department, is or projects where at least twenty-five percent (25%)
172	310		of main crew principal p hotography days are filmed o n location,
173	311		excluding sound stage production, in a municipality having a
174	312		population of thirteen thousand (13,000) twenty-five thousand
175	313		(25,000) or fewer persons according to the federal Federal Decennial
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176	340		Census or most recent po pulation estimate regardless of the county
177	341		in which the municipality is located or partially located;
178		-	ENR. H. B. NO. 2459 Page 5
179	342		3. Five percent (5%) of the qualified production expenditure
180	343		amount for soundstage expenditures if at least twenty-five percent
181	344		(25%) of main crew princi pal photography days are filmed at a
182	345		qualified soundstage facility;
183		-
184	346		4. For eligible television series as defined in paragraph 4 of
185	347		Section 2 3632 of this act title:
186		-
187	348		a. two percent (2%) of the qualified production
188	349		expenditure amount for an eligible television episodic
189	350		pilot, and
190		-
191	351		b. five percent (5%) of the qualified production
192	352		expenditure amount if a television series is filmed
193	353		for one or more seasons;
194		-
195	354		5. Five percent (5%) of the qualified production expenditure
196	355		amount for an eligible multi-film deal as defined in paragraph 7 of
197	356		Section 2 3632 of this act title; and
198		-
199	357		6. On or after July 1, 2023, two percent (2%) of the qualified
200	358		production expenditure amount for t he post-production expenses of:
201		-
202	359		a. music production, recording, mixing, or composition,
203	360		or
204		-
205	361		b. licensing of Oklahoma music ; and
206		-
207	362		7. Three percent (3%) of the qualified production expenditure
208	363		amount based on expenditures paid to Oklahoma vendors for post-
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209	390		production expenses with a minimum expenditure of three percent (3%)
210	391		of Oklahoma production expend itures. Post-production expenditures
211	392		include but are not limited to the following categories:
212		-
213	393		a. sound recording or mixing,
214		-
215	394		b. color grading,
216		-
217	395		c. editorial work,
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219	396		d. visual effects,
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221	397		e. animation,
222		-
223		-	f. deliverables, excluding marketing and advertising, ENR. H. B. NO. 2459 Page 6
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	398	+	f. deliverables, excluding marketing and advertising,
225	399		g. music production, recording, mixing or composition,
226		-
227	400		h. licensing of Oklahoma music, and
228		-
229	401		i. editing equipment or editing facility rental,
230		-
231	402		h. color grading or digital intermediate processing,
232		-
233	403		i. audio post-production processes including Foley artist
234	404		processes or services, and
235		-
236	405		j. graphics, including but not limited to the GFX system.
237		-
238	406		C. Notwithstanding any other provisions of this section or the
239	407		provisions of the Filmed In Oklahoma Act of 2021 to the contrary, in
240	408		no case shall the total incentive payments authorized by this
241	409		section exceed thirty percent (30%) of the oth erwise qualified
242	410		production expenditure amount. The incentive payment amount
243	411		prescribed by subsection A of this section may be used in any
244	412		combination with the additional incentive amounts authorized by
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245	439		subsection B of this section, but the combination of the in centive
246	440		amounts shall not exceed thirty percent (30 %).
247		-
248	441		SECTION 3. AMENDATORY 68 O.S. 2021, Section 3638, is
249	442		amended to read as fo llows:
250		-
251	443		Section 3638. All production projects for which any incentive
252	444		is paid pursuant to the provisions of this act the Filmed in
253	445		Oklahoma Act of 2021 shall contain a logo, as approved by the
254	446		Oklahoma Department of Commerce, to be displayed in the end credits
255	447		of the finished production for a period of at least five (5) seconds
256	448		or, if the production does not contain end credits, the Oklahoma
257	449		Department of Commerce shall obtain a commitment by the pr oduction
258	450		company to provide equivalent value as determined by the Oklahoma
259	451		Department of Commerce.
260		-
261	452		SECTION 4. Sections 1 and 3 of this act shall become effective
262	453		July 1, 2023.
263		-
264	454		SECTION 5. It being immediately necessary for the preservation
265	455		of the public peace, health or safety, an emergency is hereby
266	456		declared to exist, by reason whereo f this act shall take effect and
267	457		be in full force from and after its passage and approval.
268		-	ENR. H. B. NO. 2459 Page 7
269	458
270		-	Passed the House of Representatives the 24th day of May, 2023.
271		-
272		-
273		-
274		-
275		-	Presiding Officer of the House
276		-	of Representatives
277		-
278		-
279		-	Passed the Senate the 25th day of May, 2023.
280		-
281		-
282		-
283		-
284		-	Presiding Officer of the Senate
285		-
286		-
287		-	OFFICE OF THE GOVERNOR
288		-	Received by the Office of t he Governor this ____________________
289		-	day of ___________________, 20_______, at _______ o'clock _______ M.
290		-	By: _________________________________
291		-	Approved by the Governor of the State of Oklahoma this _____ ____
292		-	day of _______________ ____, 20_______, at ____ ___ o'clock _______ M.
293		-
294		-
295		-	_________________________________
296		-	Governor of the State of Oklahoma
297		-
298		-	OFFICE OF THE SECRETARY OF STATE
299		-	Received by the Office of the Secretary of State this __________
300		-	day of ___________________, 20_______, at _______ o'clock ____ ___ M.
301		-	By: _________________________________
	459	+	59-1-8379 MAH 05/15/23
302	460