Public Act 094-0171
 
SB1965 Enrolled LRB094 11475 BDD 42416 b

    AN ACT concerning revenue.
 
    Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
 
    Section 5. The Illinois Income Tax Act is amended by
changing Section 213 as follows:
 
    (35 ILCS 5/213)
    Sec. 213. Film production services credit. For tax years
beginning on or after January 1, 2004, a taxpayer who has been
awarded a tax credit under the Film Production Services Tax
Credit Act is entitled to a credit against the taxes imposed
under subsections (a) and (b) of Section 201 of this Act in an
amount determined by the Department of Commerce and Economic
Opportunity Community Affairs under the Film Production
Services Tax Credit Act. If the taxpayer is a partnership or
Subchapter S corporation, the credit is allowed to the partners
or shareholders in accordance with the determination of income
and distributive share of income under Sections 702 and 704 and
Subchapter S of the Internal Revenue Code.
    A transfer of this credit may be made by the taxpayer
earning the credit within one year after the credit is awarded
in accordance with rules adopted by the Department of Commerce
and Economic Opportunity.
    The Department, in cooperation with the Department of
Commerce and Economic Opportunity Community Affairs, must
prescribe rules to enforce and administer the provisions of
this Section. This Section is exempt from the provisions of
Section 250 of this Act.
    The credit may not be carried forward or back. If the
amount of the credit exceeds the tax liability for the year,
the excess may be carried forward and applied to the tax
liability of the 5 taxable years following the excess credit
year. The credit shall be applied to the earliest year for
which there is a tax liability. If there are credits from more
than one tax year that are available to offset a liability, the
earlier credit shall be applied first. In no event shall a
credit under this Section reduce the taxpayer's liability to
less than zero.
(Source: P.A. 93-543, eff. 1-1-04; revised 12-6-03.)
 
    Section 10. The Film Production Services Tax Credit Act is
amended by changing Sections 10, 15, 20, 30, 45, and 90 and by
adding Section 43 as follows:
 
    (35 ILCS 15/10)
    (Section scheduled to be repealed on January 1, 2006)
    Sec. 10. Definitions. As used in this Act:
    "Accredited production" means a film, video, or television
production that has been certified by the Department in which
the aggregate Illinois labor expenditures included in the cost
of the production, in the period that ends 12 months after the
time principal filming or taping of the production began,
exceed $100,000 for productions of 30 minutes or longer, or
$50,000 for productions of less than 30 minutes; but does not
include a production that:
        (1) is news, current events, or public programming, or
    a program that includes weather or market reports;
        (2) is a talk show;
        (3) is a production in respect of a game,
    questionnaire, or contest;
        (4) is a sports event or activity;
        (5) is a gala presentation or awards show;
        (6) is a finished production that solicits funds;
        (7) is a production produced by a film production
    company if records, as required by 18 U.S.C. 2257, are to
    be maintained by that film production company with respect
    to any performer portrayed in that single media or
    multimedia program; or
        (8) is a production produced primarily for industrial,
    corporate, or institutional purposes.
    "Accredited production certificate" means a certificate
issued by the Department certifying that the production is an
accredited production that meets the guidelines of this Act.
    "Applicant" means a taxpayer that is a film production
company that is operating or has operated an accredited
production located within the State of Illinois and that (i)
owns the copyright in the accredited production throughout the
Illinois production period or (ii) has contracted directly with
the owner of the copyright in the accredited production or a
person acting on behalf of the owner to provide services for
the production, where the owner of the copyright is not an
eligible production corporation.
    "Credit" means the amount equal to 25% of the Illinois
labor expenditure approved by the Department. The applicant is
deemed to have paid, on its balance due day for the year, an
amount equal to 25% of its qualified Illinois labor expenditure
for the tax year. For Illinois labor expenditures generated by
the employment of residents of geographic areas of high poverty
or high unemployment, as determined by the Department, in an
accredited production approved by the Department after January
1, 2005, the applicant shall receive an enhanced credit of 10%
in addition to the 25% credit.
    "Department" means the Department of Commerce and Economic
Opportunity Community Affairs.
    "Director" means the Director of Commerce and Economic
Opportunity Community Affairs.
    "Illinois labor expenditure" means salary or wages paid to
employees of the applicant for services on the accredited
production;
    To qualify as an Illinois labor expenditure, the
expenditure must be:
        (1) Reasonable in the circumstances.
        (2) Included in the federal income tax basis of the
    property.
        (3) Incurred by the applicant for services on or after
    January 1, 2004.
        (4) Incurred for the production stages of the
    accredited production, from the final script stage to the
    end of the post-production stage.
        (5) Limited to the first $25,000 of wages paid or
    incurred to each employee of the production.
        (6) Exclusive of the salary or wages paid to or
    incurred for the 2 highest paid employees of the
    production.
        (7) Directly attributable to the accredited
    production.
        (8) Paid in the tax year for which the applicant is
    claiming the credit or no later than 60 days after the end
    of the tax year.
        (9) Paid to persons resident in Illinois at the time
    the payments were made.
        (10) Paid for services rendered in Illinois.
(Source: P.A. 93-543, eff. 1-1-04; revised 11-3-04.)
 
    (35 ILCS 15/15)
    (Section scheduled to be repealed on January 1, 2006)
    Sec. 15. Powers of the Department. The Department, in
addition to those powers granted under the Civil Administrative
Code of Illinois, is granted and has all the powers necessary
or convenient to carry out and effectuate the purposes and
provisions of this Act, including, but not limited to, power
and authority to:
    (a) Adopt rules deemed necessary and appropriate for the
administration of the tax credit program; establish forms for
applications, notifications, contracts, or any other
agreements; and accept applications at any time during the
year.
    (b) Assist applicants pursuant to the provisions of this
Act to promote, foster, and support film production and its
related job creation or retention within the State.
    (c) Gather information and conduct inquiries, in the manner
and by the methods as it deems desirable, including any
information required for the Department to comply with Section
45 and, without limitation, gathering information with respect
to applicants for the purpose of making any designations or
certifications necessary or desirable or to gather information
to assist the Department with any recommendation or guidance in
the furtherance of the purposes of this Act, including, but not
limited to, information as to whether the applicant
participated in training, education, and recruitment programs
that are organized in cooperation with Illinois colleges and
universities, labor organizations, and the motion picture
industry, and are designed to promote and encourage the
training and hiring of Illinois residents who represent the
diversity of the Illinois population.
    (d) Provide for sufficient personnel to permit
administration, staffing, operation, and related support
required to adequately discharge its duties and
responsibilities described in this Act from funds as may be
appropriated by the General Assembly for the administration of
this Act.
    (e) Require applicants, upon written request, to issue any
necessary authorization to the appropriate federal, state, or
local authority for the release of information concerning a
project being considered under the provisions of this Act, with
the information requested to include, but not be limited to,
financial reports, returns, or records relating to the
applicant or the accredited production.
    (f) Require that an applicant must at all times keep proper
books of record and account in accordance with generally
accepted accounting principles consistently applied, with the
books, records, or papers related to the accredited production
in the custody or control of the taxpayer open for reasonable
Department inspection and audits, and including, without
limitation, the making of copies of the books, records, or
papers, and the inspection or appraisal of any of the assets of
the applicant or the accredited production.
    (g) Take whatever actions are necessary or appropriate to
protect the State's interest in the event of bankruptcy,
default, foreclosure, or noncompliance with the terms and
conditions of financial assistance or participation required
under this Act, including the power to sell, dispose, lease, or
rent, upon terms and conditions determined by the Director to
be appropriate, real or personal property that the Department
may receive as a result of these actions.
(Source: P.A. 93-543, eff. 1-1-04.)
 
    (35 ILCS 15/20)
    (Section scheduled to be repealed on January 1, 2006)
    Sec. 20. Tax credit awards. Subject to the conditions set
forth in this Act, an applicant is entitled to a credit as of
25% of the Illinois labor expenditure approved by the
Department under Section 40 of this Act.
(Source: P.A. 93-543, eff. 1-1-04.)
 
    (35 ILCS 15/30)
    (Section scheduled to be repealed on January 1, 2006)
    Sec. 30. Review of application for accredited production
certificate.
    (a) In determining whether to issue an accredited
production certificate, the Department must determine that a
preponderance of the following conditions exist:
        (1) The applicant's production intends to make the
    expenditure in the State required for certification.
        (2) The applicant's production is economically sound
    and will benefit the people of the State of Illinois by
    increasing opportunities for employment and strengthen the
    economy of Illinois.
        (3) The applicant has filed a diversity plan with the
    Department outlining specific goals (i) for hiring
    minority persons and females, as defined in the Business
    Enterprise for Minorities, Females, and Persons with
    Disabilities Act, and (ii) for using vendors receiving
    certification under the Business Enterprise for
    Minorities, Females, and Persons with Disabilities Act;
    the Department has approved the plan as meeting the
    requirements established by the Department; and the
    Department has verified that the applicant has met or made
    good-faith efforts in achieving those goals. The
    Department must adopt any rules that are necessary to
    ensure compliance with the provisions of this item (3) and
    that are necessary to require that the applicant's plan
    reflects the diversity of this State. The applicant's
    production application includes a provision setting forth
    the percentage of minority workers that the production
    company plans to employ, subject to any applicable
    collective bargaining agreements with a labor organization
    to which the applicant is a signatory, to perform work on
    the production. This provision should stress the
    importance of hiring the percentage of minorities that is
    set out in the application.
        (4) The applicant's production application indicates
    whether the applicant intends to participate in training,
    education, and recruitment programs that are organized in
    cooperation with Illinois colleges and universities, labor
    organizations, and the motion picture industry and are
    designed to promote and encourage the training and hiring
    of Illinois residents who represent the diversity of the
    Illinois population.
        (5) That, if not for the credit, the applicant's
    production would not occur in Illinois, which may be
    demonstrated by any means including, but not limited to,
    evidence that the applicant has multi-state or
    international location options and could reasonably and
    efficiently locate outside of the State, or demonstration
    that at least one other state or nation is being considered
    for the production, or evidence that the receipt of the
    credit is a major factor in the applicant's decision and
    that without the credit the applicant likely would not
    create or retain jobs in Illinois, or demonstration that
    receiving the credit is essential to the applicant's
    decision to create or retain new jobs in the State.
        (6) Awarding the credit will result in an overall
    positive impact to the State, as determined by the
    Department using the best available data.
    (b) If any of the provisions in this Section conflict with
any existing collective bargaining agreements, the terms and
conditions of those collective bargaining agreements shall
control.
(Source: P.A. 93-543, eff. 1-1-04.)
 
    (35 ILCS 15/43 new)
    Sec. 43. Training programs for skills in critical demand.
To accomplish the purposes of this Act, the Department may use
the training programs provided for Illinois under Section
605-800 of the Department of Commerce and Economic Opportunity
Law of the Civil Administrative Code of Illinois.
 
    (35 ILCS 15/45)
    (Section scheduled to be repealed on January 1, 2006)
    Sec. 45. Evaluation of tax credit program; reports to the
General Assembly.
    (a) The Department shall evaluate the tax credit program.
The evaluation must include an assessment of the effectiveness
of the program in creating and retaining new jobs in Illinois
and of the revenue impact of the program, and may include a
review of the practices and experiences of other states or
nations with similar programs. Upon completion of this
evaluation, the Department shall determine the overall success
of the program, and may make a recommendation to extend,
modify, or not extend the program based on this evaluation.
    (b) At the end of each fiscal quarter, the Department must
submit to the General Assembly a report that includes, without
limitation, the following information:
        (1) the economic impact of the tax credit program,
    including the number of jobs created and retained,
    including whether the job positions are entry level,
    management, talent-related, vendor-related, or
    production-related;
        (2) the amount of film production spending brought to
    Illinois, including the amount of spending and type of
    Illinois vendors hired in connection with an accredited
    production; and
        (3) an overall picture of whether the human
    infrastructure of the motion picture industry in Illinois
    reflects the geographical, racial and ethnic, gender, and
    income-level diversity of the State of Illinois.
(Source: P.A. 93-543, eff. 1-1-04.)
 
    (35 ILCS 15/90)
    (Section scheduled to be repealed on January 1, 2006)
    Sec. 90. Repeal. This Act is repealed on January 1, 2007 2
years after its effective date.
(Source: P.A. 93-543, eff. 1-1-04; 93-840, eff. 7-30-04.)
 
    Section 99. Effective date. This Act takes effect upon
becoming law.