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An Act To Promote Workforce Development and Provide an Economic Stimulus for Maine-based Filmmakers and Supporting Businesses
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 ofwork performed in this State on 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$75,000 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$75,000 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, including commercial airfare if purchased through a travel agency or travel company based in this State for travel to and from this State or within this State that is directly attributable to the production; 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, as amended by PL 2009, c. 470, §1, is 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.  Be a resident of the State.
 
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.
Sec. 4. 5 MRSA §13090-L, sub-§4, as amended by PL 2011, c. 285, §1, is repealed.
Sec. 5. 5 MRSA §13090-L, sub-§5, as amended by PL 2009, c. 470, §1, is further amended to read:
 
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. 6. 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. 7. 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. 8. 36 MRSA §5219-Y, as amended by PL 2011, c. 240, §37, is repealed.
Sec. 9.  36 MRSA §6901, sub-§§1-A and 1-B  are enacted to read:
 
1-A.  Above-the-line personnel.     "Above-the-line personnel" means individuals who guide, influence and add to the creative direction, process and voice of a given narrative in a film including but not limited to filmmakers, producers, directors, screenwriters, editors and principal actors.
 
1-B.  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. 10. 36 MRSA §6901, sub-§2, as amended by PL 2013, c. 546, §16, is repealed.
Sec. 11.  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. 12.  36 MRSA §6901, sub-§5-A  is enacted to read:
 
5-A.  Visual media production expense.     "Visual media production expense" has the same meaning as in Title 5, section 13090-L, subsection 2-A, paragraph F.
Sec. 13. 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 visual media production expenses.     A visual media production company is allowed a reimbursement equal to 25% of all visual media production expenses, including wages, incurred with respect to a certified visual media production if the visual media production company has visual media production expenses of $75,000 or more with respect to that certified visual media production. To qualify for reimbursement pursuant to this subsection:
 
A.  At least 25% of the above-the-line personnel used in the certified visual media production, not including principal actors, employed by the visual media production company must be residents of Maine;
 
B.  At least 50% of the below-the-line personnel used in the certified visual media production, 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;
 
C.  The visual media production expenses must exceed 50% of the total production expenses or at least 75% of the total principal photography days must occur in the State;
 
D.  The visual media production company must have paid all financial obligations that the visual media production company incurred in the State;
 
E.  The visual media production company must provide evidence that 50% of direct production expenditures occurred in the State. As used in this paragraph, "direct production expenditure" means a transaction that is subject to taxation in the State, including payment of wages to a person who is a resident of Maine and payment for services provided by a vendor that has a physical presence in the State. As used in this paragraph, "physical presence" means a physical address in the State; a post office box or other mail drop enterprise is not considered a physical presence unless the vendor is providing mail services to the visual media production company; and
 
F.  With respect to the certified visual media production on which the application for a reimbursement is based, the visual media production company must report to the Department of Economic and Community Development the following information:
 
(1) The total wages earned by residents of Maine;
 
(2) The number of residents of Maine employed;
 
(3) The total amount of taxes paid;
 
(4) The total expenditures made in the State; and
 
(5) Any other information considered necessary by the Department of Economic and Community Development to determine the effectiveness of the reimbursement program.
 
The reimbursement of visual media production expenses authorized by this section may not exceed $750,000.
Sec. 14. 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 7, a visual media production company shall report to the State Tax Assessor that portion of certified production wagesvisual 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 report.
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.
 
SUMMARY
For the purpose of establishing the film industry as a permanent component of the economic base of Maine; developing a pool of trained professionals and businesses in Maine to supply and support the film industry in Maine; increasing employment of Maine residents; improving the economic success of existing businesses in Maine; and developing the infrastructure in Maine necessary for a thriving film industry, 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 $75,000 per individual;
3. It increases the reimbursement rate from 12% of certified production wages that are paid to Maine residents and 10% of certified production wages paid to non-Maine residents to 25% of all visual media production expenses, including wages, and specifies that the reimbursement for wages is for all personnel, including filmmakers, cast members and the technical production and postproduction staff of a visual media production company as long as the company has at least $75,000 in visual media production expenses from the certified production;
4. It repeals the certified visual media production tax credit and caps reimbursement of expenses at $750,000;
5. It specifies that, in order to be eligible for the visual media production reimbursement, at least 25% of the above-the-line personnel, as well as 50% of the below-the-line personnel, not including extras, must be Maine residents, and either the visual media production expenses exceed 50% of the total production expenses or at least 75% of the total principal photography days occur in Maine; and
6. It specifies that a person claiming the Pine Tree Development Zone tax credit is not eligible to get the visual media production reimbursement.