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An Act To Provide Incentives To Foster Economic Growth and Build Infrastructure in the State by Encouraging Visual Media Production
Emergency preamble. Whereas, acts and resolves of the Legislature do not become effective until 90 days after adjournment unless enacted as emergencies; and
Whereas,  this legislation fosters economic growth in the State by providing incentives to film companies; and
Whereas,  film production is especially amenable to incentives because it is highly mobile, environmentally safe, capital and labor intensive and effective in promoting tourism; and
Whereas,  it is important that these incentives be made available quickly to encourage film production companies to come to Maine as soon as possible, thus benefiting the economy and people of Maine; and
Whereas,  in the judgment of the Legislature, these facts create an emergency within the meaning of the Constitution of Maine and require the following legislation as immediately necessary for the preservation of the public peace, health and safety; now, therefore,
Be it enacted by the People of the State of Maine as follows:
Sec. 1. 5 MRSA §13090-L, sub-§1, as amended by PL 2009, c. 470, §1, is further amended to read:
 
1. Generally.   A visual media production company that intends to undertake a visual media production in this State may apply to the department to have the production, or a portion of the production, certified under subsection 3 for purposes of the visual media production reimbursement pursuant to Title 36, chapter 919-A and the credit under Title 36, section 5219-Y.
Sec. 2. 5 MRSA §13090-L, sub-§2-A, ¶F, as enacted by PL 2009, c. 470, §1, is amended to read:
 
F. "Visual media production expense" means an expense directly incurred in this State for preproduction, production or postproduction work performed in this State of a visual media production certified under this section. "Visual media production expense" includes wages and salaries of individuals employed in the production on which taxes have been paid or accrued if those wages do not exceed $50,000$250,000 per individual and payments to a temporary employee-leasing company, as defined in Title 36, section 6901, subsection 3-A, and other contractual payments for the services of individuals working in the State if those payments do not exceed $50,000$250,000 per individual providing services in the production. "Visual media production expense" includes the cost of construction; operations; editing and related services; music, photography and film processing, including transferring film to tape or a digital format; sound recording, mixing and synchronization; lighting, makeup, wardrobe and accessories; transportation; food and lodging for cast and crew; insurance and bonding; and the rental of facilities and equipment, including location fees. "Visual media production expense" does not include expenses incurred in marketing or advertising a visual media production or in printing or disseminating a visual media production.
Sec. 3. 5 MRSA §13090-L, sub-§§3 and 5, as amended by PL 2009, c. 470, §1, are further amended to read:
 
3. Requirements for visual media production certificate.   Applications for a visual media production certificate must be made on a form prescribed and furnished by the department. The applicant must:
 
A. Provide the names of the principals involved in the visual media production and contact information for them;
 
B. Provide a certificate of insurance for the visual media production;
 
C. Provide financial information that demonstrates that the visual media production is fully financed and that at least $75,000 of visual media production expense will be incurred for the visual media production certified in accordance with this subsection;
 
D. Provide data demonstrating that the visual media production will benefit the people of the State by increasing opportunities for employment and will strengthen the economy of the State;
 
E. Agree to include, in the certified visual media production, an on-screen credit for the State of Maine. The exact wording and size of that credit must be determined in rules adopted by the Maine State Film Office and the department. The Maine State Film Office or the department may, at its discretion, exempt visual media productions from this requirement. Rules adopted pursuant to this paragraph are routine technical rules as defined in chapter 375, subchapter 2-A;
 
F. Provide evidence that the visual media production company is not owned by, affiliated with or controlled by, in whole or in part, a person that is in default on a loan made by the State or a loan guaranteed by the State;
 
G. Provide any other information required by the department; and
 
H. Provide a projected schedule for preproduction, production and postproduction of the visual media production that shows that the production will begin within 60 days after certification pursuant to this subsection.; and
 
I.  Agree to pay an administrative fee of .2% of the amount of the visual media production reimbursement allowed pursuant to Title 36, chapter 919-A, but at least $200 and no more than $5,000, and as determined by the State Tax Assessor pursuant to Title 36, section 6209, subsection 2-A. The administrative fee must be paid after the visual media production company files the report required by subsection 4 and before the visual media production company receives the visual media production reimbursement.
 
To qualify for a visual media production certificate, a visual media production company must demonstrate to the satisfaction of the commissioner that the visual media production company has met, or will meet, the requirements of this subsection. If the department determines that the applicant does not qualify for a visual media production certificate, it must inform the applicant of that determination in writing within 4 weeks of receiving the application. As soon as practicable, the department shall issue a visual media production certificate for a visual media production that qualifies. The department shall include with the certificate information regarding the tax credit report under subsection  4 7 and procedures for claiming reimbursement under Title 36, chapter 919-A and the credit under Title 36, section 5219-Y.
 
5. Department to provide information to State Tax Assessor.   The department shall provide to the State Tax Assessor copies of the visual media production certificate issued pursuant to subsection 3, together with any other information reasonably required by the State Tax Assessor for the administration of visual media production reimbursement under Title 36, chapter 919-A and the credit under Title 36, section 5219-Y.
Sec. 4. 5 MRSA §13090-L, sub-§7, as enacted by PL 2009, c. 470, §1, is amended to read:
 
7. Report.   The Maine State Film Office shall submit a report by January 15th annually to the joint standing committee of the Legislature having jurisdiction over taxation matters regarding the certification and reporting process pursuant to this section and the visual media production tax credit and reimbursement activities pursuant to Title 36, section 5219-Y and Title 36, chapter 919-A. The report must include a description of any rule-making activity related to the implementation of the credit and reimbursement activities, outreach efforts to visual media production companies, the number of applications for the visual media production credit and tax reimbursement, the number of credits and reimbursements granted, the revenue loss associated with the credit and reimbursement and the amount of visual media production expenses generated in the State as a result of the credit and reimbursement.
Sec. 5. 5 MRSA §13090-M, sub-§4, ¶E, as enacted by PL 2011, c. 372, §1, is amended to read:
 
E. A signed agreement with the department provides that the project or production will not be the basis for a claim for an income tax credit under Title 36, section 5219-Y or reimbursement under Title 36, chapter 919-A.
Sec. 6. 36 MRSA §191, sub-§2, ¶MM, as amended by PL 2009, c. 652, Pt. A, §51, is further amended to read:
 
MM. The disclosure to an authorized representative of the Department of Economic and Community Development of information required for the administration of the visual media production credit under section 5219-Y, the employment tax increment financing program under chapter 917, the visual media production reimbursement program under chapter 919-A or the Pine Tree Development Zone program under Title 30-A, chapter 206, subchapter 4;
Sec. 7. 36 MRSA §5219-Y, as amended by PL 2011, c. 240, §37, is repealed.
Sec. 8.  36 MRSA §6901, sub-§1-A  is enacted to read:
 
1-A.  Below-the-line personnel.     "Below-the-line personnel" means nonstarring cast members and the technical production and postproduction staff of a visual media production company.
Sec. 9. 36 MRSA §6901, sub-§2, as amended by PL 2013, c. 546, §16, is further amended to read:
 
2. Certified production wages.   "Certified production wages" means wages subject to withholding under section 5250, subsection 1 that are paid by a visual media production company for work on a certified visual media production, an amount paid to a temporary employee-leasing company for personal services rendered in this State by a leased employee in connection with a certified visual media production, an amount paid for the services of a performing artist working in the State in connection with a certified visual media production and other contractual payments for the services of individuals working in the State in connection with a certified visual media production. "Certified production wages" includes only the first $50,000$250,000 paid to or with respect to a particular individual for personal services rendered in connection with a particular certified visual media production.
Sec. 10.  36 MRSA §6901, sub-§3-B  is enacted to read:
 
3-B.  Extra.     "Extra" means a nonstarring cast member who appears in a nonspeaking or nonsinging capacity, usually in the background, of a visual media production.
Sec. 11. 36 MRSA §6902, sub-§1, as amended by PL 2011, c. 240, §46, is repealed and the following enacted in its place:
 
1.  Reimbursement of certified production wages.     A visual media production company is allowed a reimbursement equal to 25% of certified production wages paid to or with respect to below-the-line personnel who are residents of Maine and 15% of certified production wages paid to or with respect to below-the-line personnel who are not residents of Maine. To qualify for the reimbursement pursuant to this subsection:
 
A.  At least 50% of the below-the-line personnel, not including extras, employed by the visual media production company must be residents of Maine unless the visual media production company certifies that a sufficient number of qualified residents of Maine are not available to meet this requirement; and
 
B.  The visual media production expenses, as defined in Title 5, section 13090-L, subsection 2, paragraph F, must exceed 50% of the total production expenses, or at least 50% of the total principle photography days must occur in Maine.
Sec. 12.  36 MRSA §6902, sub-§1-A  is enacted to read:
 
1-A.  Reimbursement of nonwage visual media production expenses.     A visual media production company is allowed a reimbursement equal to 25% of its nonwage visual media production expenses incurred with respect to a certified visual media production if the visual media production company has visual media production expenses of $30,000 or more with respect to that certified visual media production. For purposes of this section, "nonwage visual media production expenses" means visual media production expenses as defined in Title 5, section 13090-L, subsection 2-A, paragraph F, except that "nonwage visual media production expenses" does not include certified production wages or any amount that would be included in certified production wages but for the $250,000 limit provided by section 6901, subsection 2.
 
A.  At least 50% of the below-the-line personnel, not including extras, employed by the visual media production company must be residents of Maine unless the visual media production company certifies that a sufficient number of qualified residents of Maine are not available to meet this requirement; and
 
B.  The visual media production expenses, as defined in Title 5, section 13090-L, subsection 2, paragraph F, must exceed 50% of the total production expenses, or at least 50% of the total principle photography days must occur in Maine.
Sec. 13. 36 MRSA §6902, sub-§2, as amended by PL 2009, c. 470, §7, is further amended to read:
 
2. Procedure for reimbursement.   Within 6 weeks following submission of the certified visual media production report pursuant to Title 5, section 13090-L, subsection 4, a visual media production company shall report to the State Tax Assessor that portion of certified production wages and its nonwage visual media production expenses paid for the certified visual media production, together with any additional information the assessor may reasonably require. The assessor shall certify to the State Controller the amounts to be transferred to the visual media production reimbursement account established, maintained and administered by the State Controller from General Fund undedicated revenue within the withholding tax category. The assessor shall pay those amounts to each visual media production company within 90 days of the receipt by the assessor of the visual media production company's reportadministrative fee, as determined pursuant to subsection 2-A.
Sec. 14.  36 MRSA §6902, sub-§2-A  is enacted to read:
 
2-A.  Determination of administrative fee.     The assessor shall determine the amount of the administrative fee to be paid by the visual media production company. The administrative fee is .2% of the reimbursement amount granted under this section, except that it must be at least $200 and no more than $5,000. The assessor shall inform the visual media production company of the amount of the administrative fee and the requirement that the administrative fee be paid prior to payment of the reimbursement.
Sec. 15.  36 MRSA §6902, sub-§4  is enacted to read:
 
4.  Limitation.     A taxpayer claiming a credit under section 5219-W is not eligible for reimbursement pursuant to this section.
Emergency clause.  In view of the emergency cited in the preamble, this legislation takes effect when approved.
 
SUMMARY
This bill makes the following changes to the visual media production certification process, reimbursement and credit:
1. It specifies that a visual media production expense must be for preproduction, production and postproduction work performed in Maine;
2. It increases the cap on wages that can be included as a visual media production expense from $50,000 per individual to $250,000 per individual;
3. It requires the applicant for visual media production certification to agree to pay an administrative fee before being reimbursed. The administrative fee is .2% of the reimbursement amount, except that the minimum amount of the fee may not be less than $200 and the maximum amount of the fee may not exceed $5,000;
4. It specifies that the reimbursement for certified production wages is only for wages paid to below-the-line personnel, which includes nonstarring cast members and the technical production and postproduction staff of a visual media production company;
5. It increases the reimbursement rate from 12% to 25% of certified production wages that are paid to Maine residents and from 10% to 15% for certified production wages paid to non-Maine residents;
6. It repeals the certified visual media production tax credit and instead provides for the reimbursement of 25% of nonwage visual media production expenses as long as the company has at least $30,000 in visual media production expenses from the certified production;
7. It specifies that, in order to be eligible for either the certified production wage reimbursement or the nonwage visual media production expense reimbursement, at least 50% of the below-the-line personnel, not including extras, must be Maine residents, unless the company certifies that it cannot meet this requirement due to an insufficient number of qualified Maine residents, and either the visual media production expenses exceed 50% of the total production expenses or at least 50% of the total principle photography days occur in Maine; and
8. It specifies that a person claiming the Pine Tree Development Zone tax credit is not eligible to get the visual media production reimbursement.