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Texas House Bill HB1142

Texas 2009 - 81st Regular

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11 81R21701 CLG-D
22 By: Anchia H.B. No. 1142
33 Substitute the following for H.B. No. 1142:
44 By: Miklos C.S.H.B. No. 1142
55
66
77 A BILL TO BE ENTITLED
88 AN ACT
99 relating to the designation of qualified media production locations
1010 in media production development zones and to exemptions from the
1111 sales and use tax for items used for media production facilities in
1212 qualified media production locations.
1313 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1414 SECTION 1. Subtitle F, Title 4, Government Code, is amended
1515 by adding Chapter 485A to read as follows:
1616 CHAPTER 485A. MEDIA PRODUCTION DEVELOPMENT ZONES
1717 SUBCHAPTER A. GENERAL PROVISIONS
1818 Sec. 485A.001. SHORT TITLE. This chapter may be cited as
1919 the Media Production Development Zone Act.
2020 Sec. 485A.002. DEFINITIONS. In this chapter:
2121 (1) "Media production facility" means a structure,
2222 building, or room used for the specific purpose of creating a moving
2323 image project. The term includes:
2424 (A) a soundstage and scoring stage;
2525 (B) a production office;
2626 (C) an editing facility, an animation production
2727 facility, and a video game production facility;
2828 (D) a storage and construction space; and
2929 (E) a sound recording studio and motion capture
3030 studio.
3131 (2) "Media production development zone" means an area
3232 recognized by a nominating body and approved by the office as a
3333 media production development zone under this chapter.
3434 (3) "Moving image project" means a visual and sound
3535 production, including a film, television program, national or
3636 multistate commercial, or digital interactive media production.
3737 The term does not include a production that is obscene, as defined
3838 by Section 43.21, Penal Code.
3939 (4) "Nominating body" means the governing body of a
4040 municipality or county, or a combination of the governing bodies of
4141 municipalities or counties, that:
4242 (A) recognizes a qualified area as a media
4343 production development zone; and
4444 (B) nominates and applies for designation of a
4545 location in a media production development zone as a qualified
4646 media production location.
4747 (5) "Office" means the Music, Film, Television, and
4848 Multimedia Office within the office of the governor.
4949 (6) "Qualified media production location" means a
5050 location in a media production development zone that has been
5151 designated by the office as a qualified media production location
5252 in accordance with this chapter.
5353 (7) "Qualified person" means a person certified as a
5454 qualified person under Section 485A.201.
5555 Sec. 485A.003. JURISDICTION OF MUNICIPALITY. For the
5656 purposes of this chapter, territory in the extraterritorial
5757 jurisdiction of a municipality is considered to be in the
5858 jurisdiction of the municipality.
5959 [Sections 485A.004-485A.050 reserved for expansion]
6060 SUBCHAPTER B. OFFICE POWERS AND DUTIES IN GENERAL
6161 Sec. 485A.051. GENERAL POWERS AND DUTIES. (a) Except as
6262 provided by Subsection (b), the office shall administer and monitor
6363 the implementation of this chapter.
6464 (b) The office and the comptroller's office shall jointly
6565 establish criteria and procedures for:
6666 (1) approving a qualified area recognized as a media
6767 production development zone by a nominating body;
6868 (2) designating a qualified location in a media
6969 production development zone as a qualified media production
7070 location; and
7171 (3) certifying a person as a qualified person under
7272 Section 485A.201.
7373 Sec. 485A.052. RULEMAKING AUTHORITY. The office shall
7474 adopt rules necessary to implement this chapter.
7575 Sec. 485A.053. ANNUAL REPORT. On or before December 15 of
7676 each year, the office shall submit to the governor, the
7777 legislature, and the Legislative Budget Board a report that:
7878 (1) evaluates the effectiveness of the media
7979 production development zone program; and
8080 (2) describes the use of state and local incentives
8181 under this chapter and their effect on revenue.
8282 Sec. 485A.054. ASSISTANCE. The office shall provide to
8383 persons desiring to construct, expand, maintain, improve, or
8484 renovate a media production facility in a qualified media
8585 production location information and appropriate assistance
8686 relating to the required legal authorization, including a permit,
8787 certificate, approval, and registration, necessary in this state to
8888 accomplish that objective.
8989 [Sections 485A.055-485A.100 reserved for expansion]
9090 SUBCHAPTER C. APPROVAL OF MEDIA PRODUCTION DEVELOPMENT ZONE AND
9191 DESIGNATION OF QUALIFIED MEDIA PRODUCTION LOCATIONS
9292 Sec. 485A.101. CRITERIA FOR MEDIA PRODUCTION DEVELOPMENT
9393 ZONE RECOGNITION. To be approved as a media production development
9494 zone, an area:
9595 (1) must be in a metropolitan area, the principal
9696 municipality of which:
9797 (A) has a population of more than 250,000; and
9898 (B) has the adequate workforce, infrastructure,
9999 facilities, or resources to support the production and completion
100100 of moving image projects;
101101 (2) must be recognized as a media production
102102 development zone by ordinance or order, as appropriate, of a
103103 municipality or the commissioners court of a county; and
104104 (3) will contain a qualified media production location
105105 within its geographical boundaries that meets the criteria under
106106 Section 485A.102.
107107 Sec. 485A.102. CRITERIA FOR QUALIFIED MEDIA PRODUCTION
108108 LOCATION DESIGNATION. To be designated a qualified media
109109 production location, a location must be land or other real property
110110 that is in a media production development zone and will:
111111 (1) be used exclusively to build or construct one or
112112 more media production facilities;
113113 (2) if the real property is a building or other
114114 facility, be renovated solely for the purpose of being converted
115115 into one or more media production facilities; or
116116 (3) if the real property consists solely of one or more
117117 media production facilities, be improved or renovated for that
118118 purpose or will be expanded into one or more additional media
119119 production facilities.
120120 Sec. 485A.103. MAXIMUM NUMBER OF ZONES AND LOCATIONS
121121 THROUGHOUT STATE. (a) There may not be more than five media
122122 production development zones under this chapter in a region at any
123123 one time.
124124 (b) Each media production development zone may not contain
125125 more than three media production locations at any one time.
126126 (c) For purposes of Subsection (a), the office shall divide
127127 the state into regions consisting of geographical boundaries
128128 prescribed by office rule.
129129 Sec. 485A.104. NOMINATION OF QUALIFIED MEDIA PRODUCTION
130130 LOCATION. (a) The governing body of a municipality or county,
131131 individually or in combination with other municipalities or
132132 counties, by ordinance or order, as appropriate, may nominate as a
133133 qualified media production location a location within its
134134 jurisdiction that meets the criteria under Section 485A.102.
135135 (b) The governing body of a county may not nominate
136136 territory in a municipality, including extraterritorial
137137 jurisdiction of a municipality, to be included in a proposed
138138 qualified media production location unless the governing body of
139139 the municipality also nominates the territory and together with the
140140 county files a joint application under Section 485A.106.
141141 Sec. 485A.105. NOMINATING ORDINANCE OR ORDER. An ordinance
142142 or order nominating a location as a qualified media production
143143 location must:
144144 (1) describe precisely both the media production
145145 development zone in which the location is to be included and the
146146 proposed location by a legal description or reference to municipal
147147 or county boundaries;
148148 (2) state a finding that the location meets the
149149 requirements of this chapter and that the media production
150150 development zone in which the location is to be included has been
151151 recognized as a zone by ordinance or order, as appropriate, by the
152152 nominating body;
153153 (3) summarize briefly the local financial incentives,
154154 including tax incentives, that, at the election of the nominating
155155 body, will apply to a qualified person;
156156 (4) contain a brief description of the project or
157157 activity to be conducted by a qualified person at the location;
158158 (5) nominate the location as a qualified media
159159 production location; and
160160 (6) contain an economic impact analysis from a local
161161 land use or economic development expert.
162162 Sec. 485A.106. APPLICATION FOR DESIGNATION. (a) For a
163163 location in a media production development zone to be designated as
164164 a qualified media production location, the nominating body, after
165165 nominating the location as a qualified media production location,
166166 must send to the office a written application for designation of the
167167 location in the zone as a qualified media production location.
168168 (b) The application must include:
169169 (1) a certified copy of the ordinance or order, as
170170 appropriate, nominating the location as a media production
171171 location;
172172 (2) a certified copy of the ordinance or order, as
173173 appropriate, recognizing the zone in which the location is to be
174174 included as a media production development zone;
175175 (3) appropriate supporting documents demonstrating
176176 that the location qualifies for designation as a qualified media
177177 production location;
178178 (4) an estimate of the economic impact of the
179179 designation of the location as a qualified media production
180180 location on the revenues of the governmental entity or entities
181181 nominating the location as a qualified media production location,
182182 considering the financial incentives and benefits contemplated;
183183 (5) an economic impact analysis of the proposed
184184 project or activities to be conducted at the proposed qualified
185185 media production location, which must include:
186186 (A) an estimate of the amount of revenue to be
187187 generated to the state by the project or activity;
188188 (B) an estimate of any secondary economic
189189 benefits to be generated by the project or activity; and
190190 (C) any other information required by the
191191 comptroller for purposes of making the certification required by
192192 Section 485A.109(b); and
193193 (6) any additional information the office requires.
194194 (c) Information required by Subsection (b) is for
195195 evaluation purposes only.
196196 (d) The economic impact analysis required by Subsection
197197 (b)(5) must also be submitted to the comptroller.
198198 Sec. 485A.107. ADVISORY COMMITTEE. (a) The media
199199 production advisory committee is composed of the following members:
200200 (1) the director of the Texas Film Commission division
201201 of the governor's office;
202202 (2) one representative of the comptroller's office,
203203 appointed by the comptroller; and
204204 (3) subject to Subsection (b), nine representatives of
205205 the media production industry appointed by the comptroller.
206206 (b) In making appointments to the advisory committee under
207207 Subsection (a)(3), the comptroller shall provide for a balanced
208208 representation of the different geographic regions of this state.
209209 Each of the following types of companies or organizations must be
210210 represented by at least one member serving on the advisory
211211 committee:
212212 (1) animation production companies;
213213 (2) film and television production companies;
214214 (3) labor or workforce organizations;
215215 (4) equipment vendors;
216216 (5) the video gaming industry; and
217217 (6) commercial production companies.
218218 (c) The director of the Texas Film Commission division of
219219 the office of the governor serves as the presiding officer of the
220220 advisory committee. The advisory committee shall meet at the call
221221 of the presiding officer.
222222 (d) The advisory committee, through review of applications
223223 submitted under Section 485A.108, shall make recommendations to the
224224 office for designation of qualified media production locations
225225 under this subchapter. The office may provide administrative
226226 support to the advisory committee.
227227 (e) Section 2110.008 does not apply to the advisory
228228 committee.
229229 Sec. 485A.108. REVIEW OF APPLICATION. (a) On receipt of an
230230 application for the designation of a qualified media production
231231 location, the office shall review the application to determine
232232 whether the nominated location qualifies for designation as a
233233 qualified media production location under this chapter.
234234 (b) The office shall consider recommendations submitted by
235235 the media production advisory committee with respect to
236236 applications received by the office.
237237 Sec. 485A.109. DESIGNATION. (a) If the office determines
238238 that a nominated location for which a designation application has
239239 been received satisfies the criteria under Section 485A.102 and on
240240 recommendation of the media production advisory committee, the
241241 office may designate the nominated location as a qualified media
242242 production location unless the office determines that the
243243 designation request should be denied for the reasons specified by
244244 Section 485A.110.
245245 (b) A designation of a qualified media production location
246246 may not be made under this section until the comptroller, based on
247247 an evaluation of the economic impact analysis submitted under
248248 Section 485A.106(b)(5), certifies that the project or activity to
249249 be conducted at the designated location will have a positive
250250 economic impact on this state.
251251 (c) On designation of the first qualified media production
252252 location in a media production development zone recognized by the
253253 nominating body for that purpose, the office shall simultaneously
254254 approve the media production development zone.
255255 Sec. 485A.110. DENIAL OF APPLICATION; NOTICE. (a) The
256256 office shall deny an application for the designation of a qualified
257257 media production location if:
258258 (1) the office determines that the nominated
259259 location does not satisfy the criteria under Section 485A.102;
260260 (2) the office determines that the number of media
261261 production location designations or number of approved media
262262 production development zones at the time of the application are at
263263 the maximum limit prescribed by Section 485A.103; or
264264 (3) the comptroller has not certified that the
265265 proposed project or activity to be conducted at the location will
266266 have a positive economic impact on this state.
267267 (b) The office shall inform the nominating body of the
268268 specific reasons for denial of an application under this section.
269269 Sec. 485A.111. PERIOD OF APPROVAL OR DESIGNATION. (a) An
270270 area may be approved by the office as a media production development
271271 zone for a maximum of five years after the date the last qualified
272272 media production location was designated within the zone's
273273 boundaries.
274274 (b) A location may be designated as a qualified media
275275 production location for a maximum of two years.
276276 (c) Except as provided by Section 485A.112, a media
277277 production development zone approval and qualified media
278278 production location designation remains in effect until September 1
279279 of the final year of the approval or designation, as appropriate.
280280 Sec. 485A.112. REMOVAL OF APPROVAL OR DESIGNATION. (a) The
281281 office may remove the approval of an area recognized as a media
282282 production development zone if the area no longer meets the
283283 criteria for that recognition under this chapter or by office rule
284284 adopted under this chapter.
285285 (b) The office may remove the designation of a location as a
286286 qualified media production location if the location no longer meets
287287 the criteria for that designation under this chapter or by office
288288 rule adopted under this chapter.
289289 (c) The removal of a designation or approval does not affect
290290 the validity of a tax incentive granted or accrued before the
291291 removal.
292292 [Sections 485A.113-485A.150 reserved for expansion]
293293 SUBCHAPTER D. ADMINISTRATION OF MEDIA PRODUCTION LOCATION
294294 Sec. 485A.151. ANNUAL REPORT. (a) For purposes of this
295295 section, the governing body of a qualified media production
296296 location is the governing body of the municipality or county, or the
297297 governing bodies of the combination of municipalities or counties,
298298 that applied to have the location designated as a qualified media
299299 production location.
300300 (b) Not later than October 1 of each year, the governing
301301 body of a qualified media production location shall submit to the
302302 office a report in the form prescribed by the office.
303303 (c) The report must include for the year preceding the date
304304 of the report:
305305 (1) the use of local incentives for which the
306306 governing body provided in the ordinance or order nominating the
307307 qualified media production location and the effect of those
308308 incentives on revenue;
309309 (2) the number of qualified persons engaging in a
310310 project or activity related to a media production facility at the
311311 qualified media production location; and
312312 (3) the types of projects or activities engaged or to
313313 be engaged in by qualified persons at the qualified media
314314 production location.
315315 [Sections 485A.152-485A.200 reserved for expansion]
316316 SUBCHAPTER E. QUALIFIED PERSON DESIGNATION AND CERTIFICATION
317317 Sec. 485A.201. QUALIFIED PERSON. A person is a qualified
318318 person if the office, for the purpose of state benefits under this
319319 chapter, or the nominating body of a qualified media production
320320 location, for the purpose of local benefits, certifies that the
321321 person, not later than 18 months after the date of the designation:
322322 (1) will build or construct one or more media
323323 production facilities at a location;
324324 (2) will renovate a building or facility solely for
325325 the purpose of being converted into one or more media production
326326 facilities at a location; or
327327 (3) will renovate or expand one or more media
328328 production facilities at a location.
329329 Sec. 485A.202. PROHIBITION ON QUALIFIED PERSON
330330 CERTIFICATION. If the office determines that the nominating body
331331 of a qualified media production location is not complying with this
332332 chapter, the office shall prohibit the certification of a qualified
333333 person at the location until the office determines that the
334334 nominating body is complying with this chapter.
335335 Sec. 485A.203. DURATION OF DESIGNATION. Except as provided
336336 by Section 485A.204, the office's certification of a person as a
337337 qualified person is effective until the second anniversary of the
338338 date the designation is made, regardless of whether the designation
339339 of the qualified media production location at which the qualified
340340 person is to perform its commitments under this chapter is
341341 terminated before that date.
342342 Sec. 485A.204. REMOVAL OF DESIGNATION. The office shall
343343 remove the certification of a qualified person for state benefits
344344 under this chapter if the office determines that the construction,
345345 renovation, improvement, maintenance, or expansion of a media
346346 production facility has not been completed at the qualified media
347347 production location for which it has received its certification
348348 within the period prescribed by Section 485A.201.
349349 [Sections 485A.205-485A.250 reserved for expansion]
350350 SUBCHAPTER F. MEDIA PRODUCTION LOCATION BENEFITS
351351 Sec. 485A.251. EXEMPTION FROM SALES AND USE TAX. Certain
352352 items are exempt from the sales and use tax as provided by Section
353353 151.3415, Tax Code.
354354 Sec. 485A.252. MONITORING QUALIFIED PERSON COMMITMENTS.
355355 (a) The office may monitor a qualified person to determine whether
356356 and to what extent the qualified person has followed through on the
357357 commitments made by the qualified person under this chapter.
358358 (b) The office may determine that the qualified person is
359359 not entitled to a tax exemption under Section 151.3415, Tax Code, if
360360 the office determines that the qualified person:
361361 (1) is not willing to cooperate with the office in
362362 providing information needed by the office to make the
363363 determination under Subsection (a);
364364 (2) has substantially failed to follow through on the
365365 commitments made by the person under this chapter before the first
366366 anniversary of the date of the qualified media production location
367367 designation; or
368368 (3) fails to submit the report required by Section
369369 151.3415, Tax Code.
370370 SECTION 2. Subchapter H, Chapter 151, Tax Code, is amended
371371 by adding Section 151.3415 to read as follows:
372372 Sec. 151.3415. ITEMS SOLD TO OR USED TO CONSTRUCT,
373373 MAINTAIN, EXPAND, IMPROVE, EQUIP, OR RENOVATE MEDIA PRODUCTION
374374 FACILITIES AT MEDIA PRODUCTION LOCATIONS; REPORT. (a) In this
375375 section, "qualified person" and "qualified media production
376376 location" have the meanings assigned by Section 485A.002,
377377 Government Code.
378378 (b) The sale, lease, or rental of a taxable item to a
379379 qualified person is exempted from the taxes imposed by this chapter
380380 if the item is used:
381381 (1) for the construction, maintenance, expansion,
382382 improvement, or renovation of a media production facility at a
383383 qualified media production location;
384384 (2) to equip a media production facility at a
385385 qualified media production location; or
386386 (3) for the renovation of a building or facility at a
387387 qualified media production location that is to be used exclusively
388388 as a media production facility.
389389 (c) A qualified person shall submit an annual report to the
390390 comptroller regarding the sale, lease, or rental of taxable items
391391 for which a tax exemption is granted to the qualified person under
392392 this section. The report must be in the form and manner prescribed
393393 by the comptroller.
394394 (d) The comptroller shall share information from reports
395395 submitted under Subsection (c), on request, with the Music, Film,
396396 Television, and Multimedia Office within the office of the
397397 governor.
398398 SECTION 3. This Act takes effect September 1, 2009.