81R10452 CLG-D
By: Watson S.B. No. 1929
A BILL TO BE ENTITLED
AN ACT
relating to the designation of media production development zones
and to exemptions from the sales and use tax for items used for
sound stages in media production development zones.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subtitle F, Title 4, Government Code, is amended
by adding Chapter 485A to read as follows:
CHAPTER 485A. MEDIA PRODUCTION DEVELOPMENT ZONES
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 485A.001. SHORT TITLE. This chapter may be cited as
the Media Production Development Zone Act.
Sec. 485A.002. DEFINITIONS. In this chapter:
(1) "Media production development zone" means an area
designated as a media production development zone under this
chapter.
(2) "Moving image project" means a visual and sound
production, including a film, television program, national or
multistate commercial, or digital interactive media production.
The term does not include a production that is obscene, as defined
by Section 43.21, Penal Code.
(3) "Nominating body" means the governing body of a
municipality or county, or a combination of the governing bodies of
municipalities or counties, that nominates and applies for
designation of an area as a media production development zone.
(4) "Office" means the Music, Film, Television, and
Multimedia Office within the office of the governor.
(5) "Qualified person" means a person certified as a
qualified person under Section 485A.201.
(6) "Sound stage" means a structure, building, or room
used for the specific purpose of creating a moving image project.
Sec. 485A.003. JURISDICTION OF MUNICIPALITY. For the
purposes of this chapter, territory in the extraterritorial
jurisdiction of a municipality is considered to be in the
jurisdiction of the municipality.
[Sections 485A.004-485A.050 reserved for expansion]
SUBCHAPTER B. OFFICE POWERS AND DUTIES IN GENERAL
Sec. 485A.051. GENERAL POWERS AND DUTIES. (a) The office
shall administer and monitor the implementation of this chapter.
(b) The office shall establish criteria and procedures for
designating a qualified area as a media production development zone
and for certifying a person as a qualified person under Section
485A.201.
Sec. 485A.052. RULEMAKING AUTHORITY. The office shall
adopt rules necessary to implement this chapter.
Sec. 485A.053. ANNUAL REPORT. On or before December 15 of
each year, the office shall submit to the governor, the
legislature, and the Legislative Budget Board a report that:
(1) evaluates the effectiveness of the media
production development zone program; and
(2) describes the use of state and local incentives
under this chapter and their effect on revenue.
Sec. 485A.054. ASSISTANCE. The office shall provide to
persons desiring to construct, expand, maintain, improve, or
renovate a sound stage in a media production development zone
information and appropriate assistance relating to the required
legal authorization, including a permit, certificate, approval,
and registration, necessary in this state to accomplish that
objective.
[Sections 485A.055-485A.100 reserved for expansion]
SUBCHAPTER C. DESIGNATION OF MEDIA PRODUCTION DEVELOPMENT ZONE
Sec. 485A.101. CRITERIA FOR MEDIA PRODUCTION DEVELOPMENT
ZONE DESIGNATION. To be designated a media production development
zone, an area must be land or other real property that:
(1) will:
(A) be used exclusively to build or construct one
or more sound stages;
(B) if the real property is a building or other
facility, be renovated solely for the purpose of being converted
into one or more sound stages; or
(C) if the real property consists solely of one
or more sound stages, be improved or renovated for that purpose or
will be expanded into one or more additional sound stages;
(2) is located in a metropolitan area, the principal
municipality of which:
(A) has a population of more than 250,000; and
(B) has the adequate workforce, infrastructure,
facilities, or resources to support the production and completion
of moving image projects;
(3) is:
(A) included in a municipal utility district
created under Section 52, Article III, or Section 59, Article XVI,
Texas Constitution;
(B) designated as a reinvestment zone for tax
increment financing under Chapter 311, Tax Code; or
(C) designated as a defense economic
readjustment zone under Chapter 2310; and
(4) is to be nominated as a media production
development zone by an ordinance or order adopted by the nominating
body.
Sec. 485A.102. MAXIMUM NUMBER OF ZONE DESIGNATIONS
THROUGHOUT STATE. There may not be more than 10 media production
development zone designations under this chapter at any one time.
Sec. 485A.103. NOMINATION OF MEDIA PRODUCTION DEVELOPMENT
ZONE. (a) The governing body of a municipality or county,
individually or in combination with other municipalities or
counties, by ordinance or order, as appropriate, may nominate as a
media production development zone an area within its jurisdiction
that meets the criteria under Section 485A.101.
(b) The governing body of a county may not nominate
territory in a municipality, including extraterritorial
jurisdiction of a municipality, to be included in a proposed media
production development zone unless the governing body of the
municipality also nominates the territory and together with the
county files a joint application under Section 485A.105.
Sec. 485A.104. NOMINATING ORDINANCE OR ORDER. An ordinance
or order nominating an area as a media production development zone
must:
(1) describe precisely the area to be included in the
zone by a legal description or reference to municipal or county
boundaries;
(2) state a finding that the area meets the
requirements of this chapter;
(3) summarize briefly the local financial incentives,
including tax incentives, that, at the election of the nominating
body, will apply to a qualified person;
(4) contain a brief description of the project or
activity to be conducted by a qualified person in the area; and
(5) nominate the area as a media production
development zone.
Sec. 485A.105. APPLICATION FOR DESIGNATION. (a) For an
area to be designated as a media production development zone, the
nominating body, after nominating the area as a media production
development zone, must send to the office a written application for
designation of the area as a media production development zone.
(b) The application must include:
(1) a certified copy of the ordinance or order, as
appropriate, nominating the area as a media production development
zone;
(2) appropriate supporting documents demonstrating
that the area qualifies for designation as a media production
development zone;
(3) an estimate of the economic impact of the
designation of the area as a media production development zone on
the revenues of the governmental entity or entities nominating the
area as a media production development zone, considering the
financial incentives and benefits contemplated; and
(4) any additional information the office requires.
(c) Information required by Subsection (b) is for
evaluation purposes only.
Sec. 485A.106. REVIEW OF APPLICATION. On receipt of an
application for the designation of a media production development
zone, the office shall review the application to determine if the
nominated area qualifies for designation as a media production
development zone under this chapter.
Sec. 485A.107. DESIGNATION. If the office determines that
a nominated area for which a designation application has been
received satisfies the criteria under Section 485A.101, the office
may designate the nominated area as a media production development
zone unless the office determines that the designation request
should be denied for the reasons specified by Section 485A.108.
Sec. 485A.108. DENIAL OF APPLICATION; NOTICE. (a) The
office shall deny an application for the designation of a media
production development zone if the office determines that:
(1) the nominated area does not satisfy the criteria
under Section 485A.101; or
(2) the number of media production development zone
designations at the time of the application is at the maximum limit
prescribed by Section 485A.102.
(b) The office shall inform the nominating body of the
specific reasons for denial of an application under this section.
Sec. 485A.109. PERIOD OF DESIGNATION. (a) An area may be
designated as a media production development zone for a maximum of
five years.
(b) Except as provided by Section 485A.110, a media
production development zone designation remains in effect until
September 1 of the final year of the designation.
Sec. 485A.110. REMOVAL OF DESIGNATION. (a) The office may
remove the designation of an area as a media production development
zone if the area no longer meets the criteria for designation under
this chapter or by office rule adopted under this chapter.
(b) The removal of a designation does not affect the
validity of a tax incentive granted or accrued before the removal.
[Sections 485A.111-485A.150 reserved for expansion]
SUBCHAPTER D. ADMINISTRATION OF MEDIA PRODUCTION DEVELOPMENT ZONE
Sec. 485A.151. ANNUAL REPORT. (a) For purposes of this
section, the governing body of a media production development zone
is the governing body of the municipality or county, or the
governing bodies of the combination of municipalities or counties,
that applied to have the area designated as a media production
development zone.
(b) Not later than October 1 of each year, the governing
body of a media production development zone shall submit to the
office a report in the form prescribed by the office.
(c) The report must include for the year preceding the date
of the report:
(1) the use of local incentives for which the
governing body provided in the ordinance or order nominating the
media production development zone and the effect of those
incentives on revenue;
(2) the number of qualified persons engaging in a
project or activity related to a sound stage in the media production
development zone; and
(3) the types of projects or activities engaged or to
be engaged in by qualified persons in the media production
development zone.
[Sections 485A.152-485A.200 reserved for expansion]
SUBCHAPTER E. QUALIFIED PERSON DESIGNATION AND CERTIFICATION
Sec. 485A.201. QUALIFIED PERSON. A person is a qualified
person if the office, for the purpose of state benefits under this
chapter, or the nominating body of a media production development
zone, for the purpose of local benefits, certifies that the person,
not later than 18 months after the date of the zone designation:
(1) will build or construct one or more sound stages in
the zone;
(2) will renovate a building or facility solely for
the purpose of being converted into one or more sound stages in the
zone; or
(3) will renovate or expand one or more sound stages in
the zone.
Sec. 485A.202. PROHIBITION ON QUALIFIED PERSON
CERTIFICATION. If the office determines that the nominating body
of a media production development zone is not complying with this
chapter, the office shall prohibit the certification of a qualified
person in the zone until the office determines that the nominating
body is complying with this chapter.
Sec. 485A.203. DURATION OF DESIGNATION. Except as provided
by Section 485A.204, the office's certification of a person as a
qualified person is effective until the fifth anniversary of the
date the designation is made, regardless of whether the media
production development zone in which the qualified person is to
perform its commitments under this chapter is terminated before
that date.
Sec. 485A.204. REMOVAL OF DESIGNATION. The office shall
remove the certification of a qualified person for state benefits
under this chapter if the office determines that the construction,
renovation, improvement, maintenance, or expansion of a sound stage
has not been completed in the media production development zone
within the period prescribed by Section 485A.201.
[Sections 485A.205-485A.250 reserved for expansion]
SUBCHAPTER F. MEDIA PRODUCTION DEVELOPMENT ZONE BENEFITS
Sec. 485A.251. EXEMPTION FROM SALES AND USE TAX. Certain
items are exempt from the sales and use tax as provided by Section
151.3415, Tax Code.
Sec. 485A.252. MONITORING QUALIFIED PERSON COMMITMENTS.
(a) The office may monitor a qualified person to determine whether
and to what extent the qualified person has followed through on the
commitments made by the qualified person under this chapter.
(b) The office may determine that the qualified person is
not entitled to a tax exemption under Section 151.3415, Tax Code, if
the office determines that the qualified person:
(1) is not willing to cooperate with the office in
providing information needed by the office to make the
determination under Subsection (a);
(2) has substantially failed to follow through on the
commitments made by the person under this chapter before the first
anniversary of the date of the zone designation; or
(3) fails to submit the report required by Section
151.3415, Tax Code.
SECTION 2. Subchapter H, Chapter 151, Tax Code, is amended
by adding Section 151.3415 to read as follows:
Sec. 151.3415. ITEMS SOLD TO OR USED TO CONSTRUCT,
MAINTAIN, EXPAND, IMPROVE, OR RENOVATE SOUND STAGE IN MEDIA
PRODUCTION DEVELOPMENT ZONES; REPORT. (a) In this section,
"qualified person" and "media production development zone" have the
meanings assigned by Section 485A.002, Government Code.
(b) The sale, lease, or rental of a taxable item to a
qualified person is exempted from the taxes imposed by this chapter
if the item is used for:
(1) the construction, maintenance, expansion,
improvement, or renovation of a sound stage located in a media
production development zone; or
(2) the renovation of a building or facility located
in a media production development zone that is to be used
exclusively as a sound stage.
(c) A qualified person shall submit a quarterly report to
the comptroller regarding the sale, lease, or rental of taxable
items for which a tax exemption is granted to the qualified person
under this section. The report must be in the form and manner
prescribed by the comptroller.
(d) The comptroller shall share information from reports
submitted under Subsection (c), on request, with the Music, Film,
Television, and Multimedia Office within the office of the
governor.
SECTION 3. This Act takes effect September 1, 2009.