Chapter 223

2017 -- H 5777 SUBSTITUTE A Enacted 07/18/2017

A N   A C T

RELATING TO TAXATION -- MOTION PICTURE PRODUCTION TAX CREDITS

Introduced By: Representatives Carson, Lima, Slater, Regunberg, and Fogarty

Date Introduced: March 01, 2017

It is enacted by the General Assembly as follows:

SECTION 1. Sections 44-31.2-2 and 44-31.2-11 of the General Laws in Chapter 44-31.2

entitled "Motion Picture Production Tax Credits" are hereby amended to read as follows:

44-31.2-2. Definitions.

For the purposes of this chapter:

(1) "Accountant's certification" as provided in this chapter means a certified audit by a

Rhode Island certified public accountant licensed in accordance with section 5-3.1 chapter 3.1 of

title 5.

(2) "Base investment" means the actual investment made and expended by a state-

certified production in the state as production-related costs.

(3) "Documentary production" means a non-fiction production intended for educational

or commercial distribution that may require out-of- state principal photography.

(4) "Domiciled in Rhode Island" means a corporation incorporated in Rhode Island or a

partnership, limited liability company, or other business entity formed under the laws of the state

of Rhode Island for the purpose of producing motion pictures as defined in this section, or an

individual who is a domiciled resident of the state of Rhode Island as defined in chapter 30 of this

title.

(5) "Final production budget" means and includes the total pre-production, production,

and post-production out-of-pocket costs incurred and paid in connection with the making of the

motion picture. The final production budget excludes costs associated with the promotion or

marketing of the motion picture

(6) "Motion picture" means a feature-length film, documentary production, video, video

games, television series, or commercial made in Rhode Island, in whole or in part, for theatrical

or television viewing or as a television pilot or for educational distribution. The term "motion

picture" shall not include the production of television coverage of news or athletic events, nor

shall it apply to any film, video, television series, or commercial or a production for which

records are required under section 2257 of title 18, U.S.C. 18 U.S.C §2257, to be maintained with

respect to any performer in such production or reporting of books, films, etc. with respect to

sexually explicit conduct.

(7) "Motion picture production company" means a corporation, partnership, limited

liability company, or other business entity engaged in the business of producing one or more

motion pictures as defined in this section. Motion picture production company shall not mean or

include:

(a) aAny company owned, affiliated, or controlled, in whole or in part, by any company

or person which who or that is in default:

(i) oOn taxes owed to the state; or

(ii) oOn a loan made by the state in the application year; or

(iii) oOn a loan guaranteed by the state in the application year; or

(b) aAny company or person who or that has discharged an obligation to pay or repay

public funds or monies by:

(i) fFiling a petition under any Ffederal or state bankruptcy or insolvency law;

(ii) hHaving a petition filed under any Ffederal or state bankruptcy or insolvency law

against such company or person;

(iii) cConsenting to, or acquiescing or joining in, a petition named in (i) or (ii);

(iv) cConsenting to, or acquiescing or joining in, the appointment of a custodian,

receiver, trustee, or examiner for such company's or person's property; or

(v) mMaking an assignment for the benefit of creditors or admitting in writing or in any

legal proceeding its insolvency or inability to pay debts as they become due.

(8) "Primary locations" means the locations which that (1) aAt least fifty-one percent

(51%) of the motion picture principal photography days are filmed; or (2) aAt least fifty-one

percent (51%) of the motion picture's final production budget is spent and employs at least five

(5) individuals during the production in this state; or (3) fFor documentary productions, the

location of at least fifty-one percent (51%) of the total productions days, which shall include pre-

production and post-production locations.

(9) "Rhode Island film and television office" means an office within the department of

administration that has been established in order to promote and encourage the locating of film

and television productions within the state of Rhode Island. The office is also referred to within

as the "film office".

(10) "State-certified production" means a motion picture production approved by the

Rhode Island film office and produced by a motion picture production company domiciled in

Rhode Island, whether or not such company owns or controls the copyright and distribution rights

in the motion picture; provided, that such company has either:

(a) sSigned a viable distribution plan; or

(b) iIs producing the motion picture for:

(i) aA major motion picture distributor;

(ii) aA major theatrical exhibitor;

(iii) tTelevision network; or

(iv) cCable television programmer.

(11) "State-certified production cost" means any pre-production, production, and post-

production cost that a motion picture production company incurs and pays to the extent it occurs

within the state of Rhode Island. Without limiting the generality of the foregoing, "state-certified

production costs" include: set construction and operation; wardrobes, make-up, accessories, and

related services; costs associated with photography and sound synchronization, lighting, and

related services and materials; editing and related services, including, but not limited to,: film

processing, transfers of film to tape or digital format, sound mixing, computer graphics services,

special effects services, and animation services, salary, wages, and other compensation, including

related benefits, of persons employed, either director directly or indirectly, in the production of a

film including writer, motion picture director, producer (provided the work is performed in the

state of Rhode Island); rental of facilities and equipment used in Rhode Island; leasing of

vehicles; costs of food and lodging; music, if performed, composed, or recorded by a Rhode

Island musician, or released or published by a person domiciled in Rhode Island; travel expenses

incurred to bring persons employed, either directly or indirectly, in the production of the motion

picture, to Rhode Island (but not expenses of such persons departing from Rhode Island); and

legal (but not the expense of a completion bond or insurance and accounting fees and expenses

related to the production's activities in Rhode Island); provided such services are provided by

Rhode Island licensed attorneys or accountants.

(12) "Application year" means within the calendar year the motion picture production

company files an application for the tax credit.

44-31.2-11. Sunset.

No credits shall be issued on or after July 1, 2021 July 1, 2024, unless the production has

received initial certification under subsection § 44-31.2-6(a) prior to July 1, 2021 July 1, 2024.

SECTION 2. This act shall take effect upon passage.

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LC001795/SUB A

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