Oklahoma 2025 Regular Session

Oklahoma House Bill HB2374 Compare Versions

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Version 2 (New)

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3		-	SENATE FLOOR VERSION - HB2374 SFLR Page 1
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	3	+	ENGR. H. B. NO. 2374 Page 1 1
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29		-	SENATE FLOOR VERSION
30		-	April 16, 2025
31		-	AS AMENDED
32		-
33	28		ENGROSSED HOUSE
34		-	BILL NO. 2374 By: Hill, Deck, and Menz of the
	29	+	BILL NO. 2374 By: Hill, Deck and Menz of the
35	30		House
36	31
37	32		and
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39	34		Thompson of the Senate
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45		-	[ revenue and taxation - procedures - income tax
46		-	treatment - economic impact reviews - codification -
47		-	effective date -
48		-	emergency ]
	40	+
	41	+
	42	+	An Act relating to revenue and taxation; amending 68
	43	+	O.S. 2021, Sections 3632, as last amended by Section
	44	+	44, Chapter 59, O.S.L. 2024, 3633, and 36 37 (68 O.S.
	45	+	Supp. 2024, Section 3632), which relate to the Filmed
	46	+	in Oklahoma Act of 2021; modifying definitions;
	47	+	prescribing procedures for withholding tax;
	48	+	prescribing income tax treatment; providing for set
	49	+	aside amount for economic impact reviews; prov iding
	50	+	for codification; providing an effective date; and
	51	+	declaring an emergency.
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53	56		BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
54	57		SECTION 1. AMENDATORY 68 O.S. 2021, Section 3632, as
55	58		last amended by Section 44, Chapter 59 , O.S.L. 2024 (68 O.S. Supp.
56	59		2024, Section 3632), is amended to read as follows:
57	60		Section 3632. As used in the Filmed in Oklahoma Act of 2021:
58	61		1. "Above-the-line personnel" means producers, principal cast,
59	62		screenwriters, and directors who work on producti on of films or
60	63		television series. The qualifying salary of above -the-line
61	64		personnel may be included as crew, as defined in paragraph 3 of this
62	65		section, if the salaries are paid to loan -out corporations and
63		-	limited liability companies registered to do business in this state
64		-	or the salaries are paid to Ok lahoma-based above-the-line personnel.
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	92	+	limited liability companies registered to do busi ness in this state
	93	+	or the salaries are paid to Oklahoma -based above-the-line personnel.
92	94		The qualifying salary of above -the-line personnel shall not comprise
93	95		more than twenty-five percent (25%) of total expenditures as defined
94	96		in paragraph 5 of this sectio n. For purposes of this paragraph,
95	97		"Oklahoma-based" means a company or individu al with an Oklahoma
96	98		income tax requirement;
97	99		2. "Apprentice" means a person who works for a skilled or
98	100		qualified person in order to learn a trade or profession for an
99	101		agreed-upon period of time. An apprentice may work in any of the
100	102		trades recognized by the Oklahoma Department of Commerce as
101	103		necessary for a film production. An apprentice shall be required to
102	104		complete safety training appropriate for the duties to be performed
103	105		in connection with a qualified project and also to complete a course
104	106		related to and with the objective of preventing workplace
105	107		misbehavior, such as bullying and sexual harassment;
106	108		3. "Crew" means any person who works on preproduction,
107	109		principal photography and post-production, with the exception of
108	110		above-the-line personnel;
109	111		4. "Eligible television series" means a project if either
110	112		seventy-five percent (75%) of the series season is filmed within the
111	113		state or, for an episodic television pilot , if more than seventy-
112	114		five percent (75%) of the pilot is filmed within the state ;
113		-	5. "Expenditure" or "production cost" includes but is not
114		-	limited to:
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	141	+	5. "Expenditure" or "production cost" includes but is not
	142	+	limited to:
142	143		a. wages or salaries of persons who are residents of this
143	144		state or who are enrolled as full -time students at a
144	145		college or university located in the state offering an
145	146		undergraduate degree program or an Oklahoma Career
146	147		Tech Certification Program or who are on active
147	148		military duty and stationed in Oklahoma or involved in
148	149		a restorative workforce program and who have earned
149	150		income from working on a film in this state including
150	151		payments to personal services corporations with
151	152		respect to the services of qualified performing
152	153		artists, pursuant to the provisions of the Internal
153	154		Revenue Code, 26 U.S.C., Section 62(a)(2),
154	155		b. the cost of construction and operations, wardrobe,
155	156		accessories and related services,
156	157		c. the cost of photography, sound synchronization,
157	158		lighting and related services,
158	159		d. the cost of editing and related services,
159	160		e. rental of facilities and equipment,
160	161		f. other direct costs of producing a film, and
161	162		g. the wages and salaries of persons who are defi ned and
162	163		registered as an Oklahoma Expatriate by the Oklahoma
163	164		Film and Music Office;
164		-	6. "Film" means a professional single media, multimedia program
165		-	or feature, which is not child sexual abuse material as defined in
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	191	+	6. "Film" means a professional single media, multimedia program
	192	+	or feature, which is not ch ild sexual abuse material as defined in
193	193		subsection A of Section 1024.1 of Title 21 of the Oklahoma Statutes
194	194		or obscene material as defined in paragraph 1 of subsection B of
195	195		Section 1024.1 of Title 21 of the Oklahoma Statutes including, but
196	196		not limited to, animation, commercials, documentaries, feature
197	197		films, game shows, pilots, realit y television, scripted television,
198	198		talk shows, national advertising messages that are broadcast on a
199	199		national affiliate or cable network, fixed on film or digital video,
200	200		which can be viewed or reproduced and which is exhibited in
201	201		theaters, licensed for exhibition by individual television stations,
202	202		groups of stations, networks, cable television stations or other
203	203		means or licensed for home viewing markets. The term shall also
204	204		include filming for interactive and video gaming including, but not
205	205		limited to, green screen, motion capture and similar production
206	206		techniques;
207	207		7. "Live audience episodic television" means episodic
208	208		television filmed in front of a live audience intended for b roadcast
209	209		on network television, cable and streaming platforms. The audience
210	210		should consist of a minimum of fifty (50) people;
211	211		8. “Loan-out corporation” or “loan -out company” means a
212	212		corporation or limited liability company actively registered with
213	213		the Oklahoma Secretary of State to do business in this state as a
214	214		foreign or domestic entity used by above -the-line personnel and crew
215		-	to report payments received from the production as Oklahoma earnings
216		-	for the personnel or crew member;
217	215
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	241	+	to report payments received from the production as Oklahoma earnings
	242	+	for the personnel or crew member;
244	243		9. "Multi-film deal" means a project in which a production
245	244		company films at least seventy -five percent (75%) of main crew
246	245		principal photography for three (3) or more films in this state
247	246		within three (3) years or where the third film starts main crew
248	247		principal photography within the three-year period;
249	248		8. 10. "Nonresident crew member" means a person who is n ot an
250	249		Oklahoma resident, hired for a qualifying production project
251	250		occurring within the state and who is subject to the payment of
252	251		Oklahoma employment taxes;
253	252		9. 11. "Production company" means a person, producer or company
254	253		who produces film for exhibition in theaters, on television or
255	254		elsewhere;
256	255		10. 12. "Qualified production expenditure amount" means an
257	256		expenditure defined pursuant to paragraph 5 of this section; and
258	257		11. 13. "Qualified soundstage facility" means a state -certified
259	258		industry standard soundst age facility having not less than seven
260	259		thousand five hundred (7,500) square feet of combined soundstage
261	260		space and with a total state rental cost to the production company
262	261		equal to at least three percent (3%) of the qualifying Oklahoma
263	262		expenditures with respect to a production.
264	263		SECTION 2. AMENDATORY 68 O.S. 2021, Section 3633, is
265	264		amended to read as follows:
266		-	Section 3633. A. There is hereby created an incentive rebate
267		-	program for certain film project s and eligible television serie s
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	291	+	Section 3633. A. There is hereby created an incentive rebate
	292	+	program for certain film projects and eligible television serie s
295	293		projects filmed or produced in Oklahoma who meet the requirements of
296	294		this act.
297	295		B. The rebate program shall be administered by the Oklahoma
298	296		Department of Commerce and the Okl ahoma Tax Commission.
299	297		C. By October 1 of each year, the Oklahoma Department of
300	298		Commerce shall submit an annual report to the Speaker of the House
301	299		of Representatives, the President Pro Tempore of the Senate, the
302	300		Chair of the Appropriations and Budget Commi ttee of the House of
303	301		Representatives, the Chair of the Appropriations Committee of the
304	302		Senate and the Director of the Legislative Office of Fiscal
305	303		Transparency detailing the program and incentive rebate payments.
306	304		D. The Oklahoma Department of Commerce and the Oklahoma Tax
307	305		Commission may promulgate rules to implement the provisions of this
308	306		act.
309	307		E. To be eligible for a rebate payment a production company
310	308		shall:
311	309		1. Submit an application and documentation to the Oklahoma
312	310		Department of Commerce as required by the Department;
313	311		2. Have filed any Oklahoma tax returns and tax documents
314	312		required by law;
315		-	3. Provide evidence that all Oklahoma crew and local vendors
316		-	have been paid and that there are no pending liens against the
317		-	production company in this state;
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	339	+	3. Provide evidence that all Oklahoma crew and local vendors
	340	+	have been paid and that there are no pending liens against the
	341	+	production company in this state;
345	342		4. Provide evidence of financing for production prior to the
346	343		commencement of principal photography;
347	344		5. Provide evidence of a certificate of general liability
348	345		insurance with a minimum coverage of One Million Dollars
349	346		($1,000,000.00) and a workers' compensation policy in compliance
350	347		with law, which shall include coverage of employer's liabil ity; and
351	348		6. Provide evidence, as required by the Department, that the
352	349		projects pursuant to this act are completed ; and
353	350		7. The production company, or its payroll service provi der,
354	351		shall withhold Oklahoma income tax at the highest percentage rate
355	352		found in the withholding statutes, on all payments to loan -out
356	353		companies for services performed in Oklahoma. The amounts so
357	354		withheld shall be allocated to the loan -out company's employ ees
358	355		based on the payments made to the loan -out company's employees for
359	356		services performed in Oklahoma. The loan -out company employees
360	357		performing services in Oklahoma shall be considered taxable and the
361	358		loan-out company shall be subject to income taxation in the taxable
362	359		year in which the loan -out company's employees perform services in
363	360		Oklahoma.
364	361		F. A production company shall not be eligible to receive both a
365	362		rebate payment pursuant to the provisions of this act and an
366		-	exemption from sales tax pursuant to the provisions of paragraph 23
367		-	of section Section 1357 of Title 68 of the Oklahom a Statutes. If a
368		-	production company has received the exemption from sales taxes and
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	389	+	exemption from sales tax pursuant to t he provisions of paragraph 23
	390	+	of section Section 1357 of Title 68 of the Oklahom a Statutes. If a
	391	+	production company has received the exemption from sales taxes and
396	392		submits a claim for rebate pursuant to the provisions of this act,
397	393		the company shall be req uired to fully repay the amount of the
398	394		exemption to the Tax Commission. A claim for a rebate shall include
399	395		documentation from the Tax Commission that repayment has been made
400	396		as required in this subsection or shall include an affidavit from
401	397		the production company that the company has not received an
402	398		exemption from sales tax pursuant t o the provisions of paragraph 23
403	399		of Section 1357 of Title 68 of the Oklahoma Statutes.
404	400		G. The Department of Commerce shall approve or disapprove all
405	401		claims for rebate and shal l notify the Tax Commission subject to the
406	402		limitations set forth in Section 4 of this act. Upon notification
407	403		of approval from the Department, the Commission shall issue payment
408	404		for all approved claims from funds held in the Filmed in Oklahoma
409	405		Program Revolving Fund created pursuant to Section 9 of this act and
410	406		subject to the limitati ons set forth in Section 4 of this act. If
411	407		the amount of approved claims exceeds the balance of the revolving
412	408		fund, payments shall be made in the order the claims are approved by
413	409		the Department. If an approved claim is not paid in whole, the
414	410		unpaid claim or unpaid portion of the claim shall be paid upon the
415	411		availability of funds.
416		-	SECTION 3. AMENDATORY 68 O.S. 2021, Section 3637, is
417		-	amended to read as follows:
418		-	Section 3637. To qualify for the maximu m twenty percent (20%)
419		-	base incentive payment authorized for Oklahoma production projects
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	438	+	SECTION 3. AMENDATORY 68 O.S. 2021, Section 3637, is
	439	+	amended to read as follows:
	440	+	Section 3637. To qualify for the maximum twenty percent (20%)
	441	+	base incentive payment authorized for Oklahoma production projects
447	442		pursuant to subsection A of Section 5 of this act, the production
448	443		project shall utilize the services of apprentices a ccording to the
449	444		following requirements:
450	445		1. For a production with Oklahoma expenditures of Seven Million
451	446		Five Hundred Thousand Dollars ($7,500,000.00) or less, two (2)
452	447		apprentices;
453	448		2. For a production with Oklahoma expenditures greater than
454	449		Seven Million Five Hundred Thousand Dollars ($7,500,000.00) and
455	450		Fifteen Million Dollars ($15,0 00,000.00) or less, four (4)
456	451		apprentices;
457	452		3. For a production with Oklahoma expenditures greater than
458	453		Fifteen Million Dollars ($15,000,000.00) and Twenty -five Million
459	454		Dollars ($25,000,000.00) or less, eight (8) apprentices; and
460	455		4. For a production with Oklahoma expenditures greater than
461	456		Twenty-five Million Dollars ($25,000,000.00), sixteen (16)
462	457		apprentices.
463	458		SECTION 4. NEW LAW A new section of law to be codified
464	459		in the Oklahoma Statutes as Section 3642 of Title 68, unless there
465	460		is created a duplication in numbering, reads as follows:
466		-	Every fiscal year the program shall designate Thirty -five
467		-	Thousand Dollars ($35,000.00) from the top tier for the purpose of
468		-	economic impact reviews of the program.
469		-	SECTION 5. This act shall become effective July 1, 2025.
470	461
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	487	+	Every fiscal year the program shall designate Thirty -five
	488	+	Thousand Dollars ($35,000.00) from the top tier for the purpose o f
	489	+	economic impact reviews of the program.
	490	+	SECTION 5. This act shall become effective July 1, 2025.
497	491		SECTION 6. It being immediately necessary for the preservation
498	492		of the public peace, health or safety, an emergency is hereb y
499	493		declared to exist, by reason whereof this act shall take effect and
500	494		be in full force from and after its passage and approval.
501		-	COMMITTEE REPORT BY: COMMITTEE ON APPROPRIATIONS
502		-	April 16, 2025 - DO PASS AS AMENDED
	495	+	Passed the House of Representatives the 25th day of March, 2025.
	496	+
	497	+
	498	+
	499	+
	500	+	Presiding Officer of the House
	501	+	of Representatives
	502	+
	503	+
	504	+
	505	+	Passed the Senate the _____ day of __________, 2025.
	506	+
	507	+
	508	+
	509	+
	510	+	Presiding Officer of the Senate