Bill Text: MI SB0511 | 2009-2010 | 95th Legislature | Engrossed
Bill Title: Sales tax; other; department of history, arts, and libraries; eliminate references. Amends sec. 4cc of 1933 PA 167 (MCL 205.54cc). TIE BAR WITH: SB 0503'09
Spectrum: Partisan Bill (Republican 5-0)
Status: (Engrossed - Dead) 2009-09-02 - Referred To Committee On Judiciary [SB0511 Detail]
Download: Michigan-2009-SB0511-Engrossed.html
SB-0511, As Passed Senate, August 27, 2009
SENATE BILL No. 511
April 30, 2009, Introduced by Senators ALLEN, BROWN, BIRKHOLZ, KUIPERS and JELINEK and referred to the Committee on Commerce and Tourism.
A bill to amend 1933 PA 167, entitled
"General sales tax act,"
by amending section 4cc (MCL 205.54cc), as amended by 2008 PA 78.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 4cc. (1) For tax years that begin after December 31, 2006
through February 29, 2008, the Michigan film office, with the
concurrence of the state treasurer, may enter into an agreement
with a motion picture production company providing a credit against
the tax imposed by this act as provided under subsection (2). To
qualify for the credit under this section, a motion picture
production company shall meet all of the following requirements:
(a) Shall spend at least $200,000.00 in this state for
purposes related to the filming or production of a single motion
picture.
(b) Shall enter into an agreement as provided in this section.
(c) Shall receive a postproduction certificate of completion
under subsection (5).
(d) Shall submit a postproduction certificate of completion
issued under subsection (5) to the department of treasury under
subsection (7).
(e) Shall not be delinquent in a tax or other obligation owed
to this state or be owned or under common control of an entity that
is delinquent in a tax or other obligation owed to this state.
(2) An agreement under this section may provide for a motion
picture production company to claim a tax credit under this section
as follows:
(a) If the company incurs between $200,000.00 and
$1,000,000.00 in production spending, up to 12% of its production
spending.
(b) If the company incurs between $1,000,000.01 and
$5,000,000.00 in production spending, up to 16% of its production
spending.
(c) If the company incurs between $5,000,000.01 and
$10,000,000.00 in production spending, up to 20% of its production
spending. However, if a company incurs more than $10,000,000.00 in
production spending, the agreement may provide tax credits based
only on the first $10,000,000.00 of its production spending.
(3) A motion picture production company intending to engage in
motion picture production in this state may submit an application
to enter into an agreement under this section to the Michigan film
office. The request shall be submitted in a form prescribed by the
Michigan film office and shall be accompanied by all of the
information and records requested by the Michigan film office. The
Michigan film office shall not process the application until it is
complete. As part of the application, the motion picture production
company shall estimate its expected production spending for an
identified motion picture. If the Michigan film office with the
concurrence of the state treasurer determines to enter into an
agreement under this section, the agreement shall provide for all
of the following:
(a) A requirement that the motion picture production company
shall commence work in this state on the identified motion picture
within 90 days of the date of the agreement or else the agreement
shall expire. However, upon request submitted by the motion picture
production company based on good cause, the Michigan film office
may extend the period for commencement of production for an
additional 90 days.
(b) A statement identifying the motion picture production
company and the motion picture that the company intends to produce
in whole or in part in this state.
(c) The maximum amount of the credit under this section
available to the motion picture production company for the motion
picture it plans to produce in whole or in part in this state.
(d) A unique number assigned to the motion picture production
project by the Michigan film office.
(e) A requirement that the motion picture not depict obscene
matter or an obscene performance.
(4) The film office and the state treasurer shall not enter
into an agreement with any motion picture production company
providing credits for more than 4 motion pictures for any 1 tax
year. In determining whether to enter into an agreement under this
section, the film office and the state treasurer shall consider all
of the following:
(a) The likelihood that in the absence of the credit the
filming will take place in a location other than this state.
(b) The extent to which the filming may have the effect of
promoting this state as a tourist destination.
(c) The motion picture production company's record in
completing commitments to engage in motion picture production.
(5) If the Michigan film office determines that a motion
picture production company has complied with the terms of an
agreement entered into under this section, the office shall issue a
postproduction certificate to that motion picture production
company. The motion picture production company shall submit a
request to the Michigan film office on a form prescribed by the
Michigan film office for a postproduction certificate, along with
any documentation the Michigan film office requires. The office
shall process each request within 60 days after it is complete.
However, the office may request additional information and
documentation before issuing a postproduction certificate of
completion and need not issue the postproduction certificate until
satisfied that production spending is adequately established. Each
postproduction certificate of completion shall be signed by the
Michigan film commissioner or his or her designee and shall include
the following information:
(a) The name of the motion picture production company.
(b) The name of the motion picture produced in whole or in
part in this state.
(c) The motion picture production company's production
spending for the motion picture and the amount of the tax credit
the company is entitled to claim under this section.
(d) The date of completion for the motion picture production
in this state.
(e) The unique number assigned to the motion picture
production project by the Michigan film office under subsection
(3).
(f) The motion picture production company's federal employer
identification number or Michigan treasury number.
(6) Information and records submitted by a motion picture
production company to the Michigan film office under this section
shall be considered confidential and exempt from disclosure under
the freedom of information act, 1976 PA 442, MCL 15.231 to 15.246,
to the extent that they describe the commercial and financial
operations of the company, they have not been publicly disseminated
at any time, and their disclosure might put the company at a
competitive disadvantage. A company submitting materials under this
section shall specifically designate any information and records
that the company deems confidential. The Michigan film office may
release any information and records submitted under this section
that have not been designated confidential by the company.
(7) A motion picture production company shall submit a
postproduction certificate of completion issued under subsection
(5) to the department of treasury. Subject to subsection (8), if
the credit allowed under this section exceeds the tax liability of
the motion picture production company for the tax year or if the
motion picture production company does not have a tax liability
under this act for the tax year, the department of treasury shall
refund the excess or pay the amount of the credit to that motion
picture production company.
(8) The total amount of tax credits available for all motion
picture production companies and their assignees under this section
shall not exceed $7,000,000.00 for any 1 tax year.
(9) The state school aid fund established in section 11 of
article IX of the state constitution of 1963 and all local units of
government shall be held harmless for any credit or refund paid
under this section. Any credit or refund paid under this section
shall be paid from the general fund in the state treasury.
(10) Not later than March 1 of each year, the Michigan film
office shall submit to the governor, the chairperson of the senate
finance committee, and the house tax policy committee an annual
report concerning the operation and effectiveness of the credit
under this section. The requirements of section 28(1)(f) of 1941 PA
122, MCL 205.28, do not apply to disclosure of tax information
required by this subsection. The report shall include all of the
following:
(a) A brief assessment of the overall effectiveness of the
credit under this section at attracting motion picture productions
to this state during the immediately preceding year.
(b) The number of motion picture productions requesting tax
credit approval during the immediately preceding year, the names of
the motion pictures produced in this state for which credits were
begun or completed in the immediately preceding year, and the
locations in this state that were used in the production of
approved motion pictures in the immediately preceding year.
(c) The amount of money spent by each motion picture
production company identified in subdivision (b) to produce the
motion pictures in this state and a breakdown of all production
spending by all companies classified as goods, services, or
salaries and wages.
(d) An estimate of the number of persons employed in this
state by motion picture production companies that qualify for the
credit under this section.
(e) The value of all tax credit certificates of completion
issued under this section.
(f) An estimate of the cost to the general fund resulting from
the tax credits claimed under this section and an estimate of
increased direct and indirect spending in this state due to motion
picture production.
(11) As used in this section:
(a) "Michigan film office" or "office" means the Michigan film
office housed within the former department of history, arts, and
libraries before May 4, 2008, and housed within the Michigan
strategic fund after May 3, 2008.
(b) "Motion picture" means a feature-length film produced for
distribution in 2 or more states that is a production for which
records are not required to be maintained with respect to any
performer in the production under 18 USC 2257, or a television
series or a commercial or series of commercials made in this state
in whole or in part for theatrical or television viewing or as a
television pilot. Motion picture does not include the production of
any of the following:
(i) Televised news or current events programs.
(ii) Live sporting events.
(iii) Political advertising.
(iv) Radio programs.
(v) Weather shows.
(vi) Financial market reports.
(vii) Talk shows.
(viii) Game shows.
(ix) Product or service marketing.
(x) Awards shows or other events.
(c) "Motion picture production company" or "company" means an
entity in the business of producing motion pictures. However,
motion picture production company does not include an entity that
is more than 30% owned, affiliated, or controlled by an entity or
individual who is in default on a loan made by this state, a loan
guaranteed by this state, or a loan made or guaranteed by any other
state.
(d) "Obscene matter or an obscene performance" means matter
described in 1984 PA 343, MCL 752.361 to 752.374.
(e) "Production spending" means the following expenditures
made in this state to film or produce a single motion picture:
(i) Payments to vendors in this state to purchase tangible
personal property that is used in making the motion picture.
(ii) Payments to vendors doing business in this state for
services relating to motion picture production, editing, and
processing.
(iii) Payments and compensation, not to exceed $100,000.00 for
any 1 employee, for contractual or salaried employees who are
residents of this state who perform services with respect to the
production.
Enacting section 1. This amendatory act does not take effect
unless Senate Bill No. 503
of the 95th Legislature is enacted into law.
