State of Washington | 62nd Legislature | 2012 Regular Session |
READ FIRST TIME 03/25/11.
AN ACT Relating to Washington's motion picture competitiveness; amending RCW 43.365.020, 43.365.030, 82.04.4489, and 43.365.040; and reenacting and amending RCW 43.365.010.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:
Sec. 1 RCW 43.365.010 and 2009 c 565 s 46 are each reenacted and
amended to read as follows:
The following definitions apply to this chapter, unless the context
clearly requires otherwise.
(1) "Approved motion picture competitiveness program" means a
nonprofit organization under the internal revenue code, section
501(c)(6), with the sole purpose of revitalizing the state's economic,
cultural, and educational standing in the national and international
market of motion picture production and assisting and providing
services for attracting the film industry, by recommending and awarding
financial assistance for costs associated with motion pictures in the
state of Washington.
(2) "Contribution" means cash contributions.
(3) "Costs" means actual expenses of production and postproduction
expended in Washington state for the production of motion pictures,
including but not limited to payments made for salaries, wages, and
health insurance and retirement benefits, the rental costs of machinery
and equipment and the purchase of services, food, property, lodging,
and permits for work conducted in Washington state.
(4) "Department" means the department of commerce.
(5) "Funding assistance" means cash expenditures from an approved
motion picture competitiveness program.
(6) "Motion picture" means a recorded audio-visual production
intended for distribution to ((theaters, DVD, video, or the internet,
or television, or one or more episodes of a single television series,
television pilots or presentations, or a commercial. "Motion picture"
does not mean production of a television commercial of an amount less
than two hundred fifty thousand dollars in actual total investment or
one or more segments of a newscast or sporting event)) the public for
exhibition in public and/or private settings by means of any and all
delivery systems and/or delivery platforms now or hereafter known,
including without limitation, screenings in motion picture theaters,
broadcasts and cablecast transmissions for viewing on televisions,
computer screens, and other audio-visual receivers, viewings on screens
by means of digital video disc (DVD) players, video on demand (VOD)
services, and digital video recording (DVR) services, direct internet
transmission, and viewing on digital computer-based systems which
respond to the users' actions (interactive media).
(7) "Person" has the same meaning as provided in RCW 82.04.030.
Sec. 2 RCW 43.365.020 and 2009 c 100 s 1 are each amended to read
as follows:
(1) The department ((shall)) must adopt criteria for ((an)) the
approved motion picture competitiveness program with the sole purpose
of revitalizing the state's economic, cultural, and educational
standing in the national and international market of motion picture
production. Rules adopted by the department shall allow the program,
within the established criteria, to provide funding assistance only
when it captures economic opportunities for Washington's communities
and businesses and shall only be provided under a contractual
arrangement with a private entity. In establishing the criteria, the
department shall consider:
(a) The additional income and tax revenue to be retained in the
state for general purposes;
(b) The creation and retention of family wage jobs which provide
health insurance and payments into a retirement plan;
(c) The impact of motion picture projects to maximize in-state
labor and the use of in-state film production and film postproduction
companies;
(d) The impact upon the local economies and the state economy as a
whole, including multiplier effects;
(e) The intangible impact on the state and local communities that
comes with motion picture projects;
(f) The regional, national, and international competitiveness of
the motion picture filming industry;
(g) The revitalization of the state as a premier venue for motion
picture production and national television commercial campaigns;
(h) Partnerships with the private sector to bolster film production
in the state and serve as an educational and cultural purpose for its
citizens;
(i) The vitality of the state's motion picture industry as a
necessary and critical factor in promoting the state as a premier
tourist and cultural destination;
(j) Giving preference to additional seasons of television series
that have previously qualified;
(k) Other factors the department may deem appropriate for the
implementation of this chapter.
(2) The board of directors created under RCW 43.365.030 shall
create and administer an account for carrying out the purposes of
subsection (3) of this section.
(3) Money received by ((an)) the approved motion picture
competitiveness program shall be used only for:
(a) Health insurance and payments into a retirement plan, and other
costs associated with film production; and
(b) ((a tax credit marketer to market the tax credits authorized
under RCW 82.04.4489; and (c))) Staff and related expenses to maintain
the program's proper administration and operation.
(4) Except as provided otherwise in subsection (7) of this section,
maximum funding assistance from ((an)) the approved motion picture
competitiveness program is limited to an amount up to thirty percent of
the total actual investment in the state of at least:
(a) Five hundred thousand dollars for a single ((feature film))
motion picture produced in Washington state; or
(b) ((Three hundred thousand dollars per television episode
produced in Washington state; or)) One hundred fifty thousand dollars for ((
(c)an infomercial or))
a television commercial associated with a national or regional
advertisement campaign produced in Washington state.
(5) Except as provided otherwise in subsection (7) of this section,
maximum funding assistance from the approved motion picture
competitiveness program is limited to an amount up to thirty-five
percent of the total actual investment of at least three hundred
thousand dollars per episode produced in Washington state. A minimum
of six episodes of a series must be produced to qualify under this
subsection. A maximum of up to thirty percent of the total actual
investment from the approved motion picture competitiveness program may
be awarded to an episodic series of less than six episodes.
(6) With respect to costs associated with nonstate labor for motion
pictures and episodic services, funding assistance from the approved
motion picture competitiveness program is limited to an amount up to
fifteen percent of the total actual investment used for costs
associated with nonstate labor. To qualify under this subsection, the
production must have a labor force of at least eighty-five percent of
Washington residents. The board may establish additional criteria to
maximize the use of in-state labor.
(7)(a) The approved motion picture competitiveness program may
allocate an annual aggregate of no more than ten percent of the
qualifying contributions by the program under RCW 82.04.4489 to provide
funding support for filmmakers who are Washington residents, new forms
of production, and emerging technologies.
(i) Up to thirty percent of the actual investment for a motion
picture with an actual investment lower than that of motion pictures
under subsection (4)(a) of this section; or
(ii) Up to thirty percent of the actual investment of an
interactive motion picture intended for multiplatform exhibition and
distribution.
(b) Subsections (4) and (5) of this section do not apply to this
subsection.
(8) Funding assistance approval must be determined by the approved
motion picture competitiveness program within a maximum of thirty
calendar days from when the application is received, if the application
is submitted after August 15, 2006.
Sec. 3 RCW 43.365.030 and 2008 c 85 s 2 are each amended to read
as follows:
(1) A Washington motion picture competitiveness program under this
chapter ((shall)) must be administered by a board of directors
appointed by the governor, and the appointments ((shall)) must be made
within sixty days following enactment. The department, after
consulting with the board, ((shall)) must adopt rules for the standards
that shall be used to evaluate the applications for funding assistance
prior to June 30, 2006.
(2) The board ((shall)) must evaluate and award financial
assistance to motion picture projects under rules set forth under RCW
43.365.020.
(3) The board ((shall)) must consist of the following members:
(a) One member representing the Washington motion picture
production industry;
(b) One member representing the Washington motion picture
postproduction industry;
(c) One member representing the Washington interactive media or
emerging motion picture industry;
(d) Two members representing labor unions affiliated with
Washington motion picture production;
(((d))) (e) One member representing the Washington visitors and
convention bureaus;
(((e))) (f) One member representing the Washington tourism
industry;
(((f))) (g) One member representing the Washington restaurant,
hotel, and airline industry; and
(((g))) (h) A chairperson, chosen at large, ((shall)) must serve at
the pleasure of the governor.
(4) The term of the board members, other than the chair, is four
years, except as provided in subsection (5) of this section.
(5) The governor ((shall)) must appoint board members in 2010 to
two-year or four-year staggered terms. Once the initial two-year or
four-year terms expire, all subsequent terms ((shall be)) are for four
years. The terms of the initial board members ((shall be)) are as
follows:
(a) The board positions in subsection (3)(b), (((d), and (f))) (e),
and (g) of this section, and one position from subsection (3)(((c)))
(d) of this section ((shall)) must be appointed to two-year terms; and
(b) The remaining board positions in subsection (3) of this section
shall be appointed to four-year terms.
(6) A board member appointed by the governor may be removed by the
governor for cause under RCW 43.06.070 and 43.06.080.
(7) Five members of the board constitute a quorum.
(8) The board ((shall)) must elect a treasurer and secretary
annually, and other officers as the board members determine necessary,
and may adopt bylaws or rules for its own government.
(9) The board ((shall)) must make any information available at the
request of the department to administer this chapter.
(10) Contributions received by a board ((shall)) must be deposited
into the account described in RCW 43.365.020(2).
Sec. 4 RCW 82.04.4489 and 2008 c 85 s 3 are each amended to read
as follows:
(1) Subject to the limitations in this section, a credit is allowed
against the tax imposed under this chapter for contributions made by a
person to a Washington motion picture competitiveness program.
(2) The person must make the contribution before claiming a credit
authorized under this section. Credits earned under this section may
be claimed against taxes due for the calendar year in which the
contribution is made. The amount of credit claimed for a reporting
period ((shall)) may not exceed the tax otherwise due under this
chapter for that reporting period. No person may claim more than one
million dollars of credit in any calendar year, including credit
carried over from a previous calendar year. No refunds may be granted
for any unused credits.
(3) The maximum credit that may be earned for each calendar year
under this section for a person is limited to the lesser of one million
dollars or an amount equal to one hundred percent of the contributions
made by the person to a program during the calendar year.
(4) Except as provided under subsection (5) of this section, a tax
credit claimed under this section may not be carried over to another
year.
(5) Any amount of tax credit otherwise allowable under this section
not claimed by the person in any calendar year may be carried over and
claimed against the person's tax liability for the next succeeding
calendar year. Any credit remaining unused in the next succeeding
calendar year may be carried forward and claimed against the person's
tax liability for the second succeeding calendar year; and any credit
not used in that second succeeding calendar year may be carried over
and claimed against the person's tax liability for the third succeeding
calendar year, but may not be carried over for any calendar year
thereafter.
(6) Credits are available on a first in-time basis. The department
((shall)) must disallow any credits, or portion thereof, that would
cause the total amount of credits claimed under this section during any
calendar year to exceed three million five hundred thousand dollars.
If this limitation is reached, the department ((shall)) must notify all
Washington motion picture competitiveness programs that the annual
statewide limit has been met. In addition, the department ((shall))
must provide written notice to any person who has claimed tax credits
in excess of the ((three million five hundred thousand dollar))
limitation in this subsection. The notice ((shall)) must indicate the
amount of tax due and ((shall)) provide that the tax be paid within
thirty days from the date of ((such)) the notice. The department
((shall)) may not assess penalties and interest as provided in chapter
82.32 RCW on the amount due in the initial notice if the amount due is
paid by the due date specified in the notice, or any extension thereof.
(7) To claim a credit under this section, a person must
electronically file with the department all returns, forms, and any
other information required by the department, in an electronic format
as provided or approved by the department. Any return, form, or
information required to be filed in an electronic format under this
section is not filed until received by the department in an electronic
format. As used in this subsection, "returns" has the same meaning as
"return" in RCW 82.32.050.
(8) No application is necessary for the tax credit. The person
must keep records necessary for the department to verify eligibility
under this section.
(9) A Washington motion picture competitiveness program ((shall))
must provide to the department, upon request, such information needed
to verify eligibility for credit under this section, including
information regarding contributions received by the program.
(10) The department ((shall)) may not allow any credit under this
section before July 1, 2006.
(11) For the purposes of this section, "Washington motion picture
competitiveness program" or "program" means an organization established
pursuant to chapter 43.365 RCW.
(12) No credit may be earned for contributions made on or after
July 1, ((2011)) 2017.
Sec. 5 RCW 43.365.040 and 2009 c 518 s 14 are each amended to
read as follows:
(1) The legislature finds that accountability and effectiveness are
important aspects of setting tax policy. In order to make policy
choices regarding the best use of limited state resources the
legislature needs information on how incentives are used.
(2) Each motion picture production receiving funding assistance
under RCW 43.365.020 ((shall)) must report information to the
department by filing a complete annual survey. The survey is due by
March 31st of the year following any calendar year in which funding
assistance under RCW 43.365.020 is taken. The department may extend
the due date for timely filing of annual surveys under this section if
failure to file was the result of circumstances beyond the control of
the motion picture production receiving the funding assistance.
(3) ((The survey shall include)) The Washington motion picture
competitiveness program established in RCW 43.365.030, in collaboration
with the department and the department of revenue, and in consultation
with the joint legislative audit and review committee, must develop a
survey form and instructions that accompany the survey form by November
1, 2012. The instructions must provide sufficient detail to ensure
consistent reporting. The survey must be designed to acquire data to
allow the state to better measure the effectiveness of the program and
to provide transparency of the motion picture competitiveness program.
The survey must include:
(a) The total amount of taxes paid;
(b) The amount of taxes paid classified by type, which may include,
but is not limited to, sales taxes, use taxes, business and occupation
taxes, unemployment insurance taxes, and workers' compensation
premiums;
(c) The amount of funding assistance received((. The survey shall
also include)); and
(d) The following information for employment positions in
Washington by the motion picture production receiving funding
assistance, including indirect employment by contractors or other
affiliates:
(((a))) (i) The number of total employment positions;
(((b) Full-time, part-time, and temporary employment positions as
a percent of total employment;)) (ii) The average number of hours worked by employed
individuals;
(c) The number of employment positions according to the following
wage bands: Less than thirty thousand dollars; thirty thousand dollars
or greater, but less than sixty thousand dollars; and sixty thousand
dollars or greater. A wage band containing fewer than three
individuals may be combined with another wage band; and
(d)
(iii) The average base pay of individuals employed by motion
picture companies, including contributions to health care benefits and
retirement plans;
(iv) The number of employment positions that have employer-provided
medical, dental, and retirement benefits((, by each of the wage
bands)); and
(v) The number of employment positions filled by Washington state
residents, and residency information for employment positions filled by
people from other locations.
(4) The department may request additional information necessary to
measure the results of the funding assistance program, to be submitted
at the same time as the survey.
(5) If a person fails to submit an annual survey under subsection
(2) of this section by the due date of the report or any extension the
department ((shall)) must declare the amount of funding assistance for
the previous calendar year to be immediately due and payable. The
department ((shall)) must assess interest, but not penalties, on the
amounts due under this section. The interest ((shall be)) is assessed
at the rate provided for delinquent taxes under chapter 82.32 RCW,
retroactively to the date the funding assistance was received, and
((shall)) accrues until the funding assistance is repaid.
(6) The department ((shall)) must use the information from this
section to prepare summary descriptive statistics. The department
((shall)) must report these statistics to the legislature each even-numbered year by September 1st. The department ((shall)) must provide
the complete annual surveys to the joint legislative audit and review
committee.
(7) The motion picture competitiveness program must monitor the
survey information submitted by production companies for completeness
and accuracy.