BILL REQ. #:  S-3922.2 

Read first time 01/16/08.   Referred to Committee on Labor, Commerce, Research & Development.

     AN ACT Relating to strengthening the tax credit and modifying the governing board of a Washington motion picture competitiveness program; and amending RCW 43.365.020, 43.365.030, and 82.04.4489.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

Sec. 1   RCW 43.365.020 and 2006 c 247 s 3 are each amended to read as follows:
     (1) The department shall adopt criteria for an 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 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; (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) Maximum funding assistance from an approved motion picture competitiveness program is limited to an amount up to twenty percent of the total actual investment in the state of at least:
     (a) ((Twenty percent of a total actual investment in the state of at least)) Five hundred thousand dollars((,)) for a single feature film produced in Washington state;
     (b) ((Twenty percent of a total actual investment in the state of at least)) Three hundred thousand dollars per television episode produced in Washington state; or
     (c) ((Twenty percent of a total actual investment in the state of at least two)) One hundred fifty thousand dollars for an infomercial or television commercial associated with a national or regional advertisement campaign produced in Washington state.
     (5) ((No single motion picture production or episodic television project may be awarded an amount greater than one million dollars from an approved motion picture competitiveness program.
     (6))) 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. 2   RCW 43.365.030 and 2006 c 247 s 4 are each amended to read as follows:
     (1) A Washington motion picture competitiveness program under this chapter shall be administered by a board of directors appointed by the governor, and the appointments shall be made within sixty days following enactment. The department, after consulting with the board, shall 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 evaluate and award financial assistance to motion picture projects under rules set forth under RCW 43.365.020.
     (3) The board shall 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) Two members representing labor unions affiliated with Washington motion picture production;
     (d) One member representing the Washington visitors and convention bureaus;
     (e) One member representing the Washington tourism industry;
     (f) One member representing the Washington restaurant, hotel, and airline industry; and
     (g) A chairperson, chosen at large, shall 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 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 for four years. The terms of the initial board members shall be as follows:
     (a) The board positions in subsection (3)(b), (d), and (f) of this section, and one position from subsection (3)(c) of this section shall 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.
     (((5))) (7) Five members of the board constitute a quorum.
     (((6))) (8) The board shall 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.
     (((7))) (9) The board shall make any information available at the request of the department to administer this chapter.
     (((8))) (10) Contributions received by a board shall be deposited into the account described in RCW 43.365.020(2).

Sec. 3   RCW 82.04.4489 and 2006 c 247 s 5 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 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((:
     (a))) one million dollars((;)) or
     (((b)(i) Through calendar year 2008,)) an amount equal to one hundred percent of the contributions made by the person to a program during the calendar year((; and
     (ii) For calendar years after 2008, an amount equal to ninety 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 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)) ten million ((five hundred thousand)) dollars. If this limitation is reached, the department shall notify all Washington motion picture competitiveness programs that the annual statewide limit has been met. In addition, the department shall provide written notice to any person who has claimed tax credits in excess of the ((three)) ten million ((five hundred thousand)) dollar limitation in this subsection. The notice shall indicate the amount of tax due and shall provide that the tax be paid within thirty days from the date of such notice. The department shall 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 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 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.