SB-1176, As Passed Senate, March 12, 2008

SUBSTITUTE FOR

SENATE BILL NO. 1176

A bill to amend 2007 PA 36, entitled

"Michigan business tax act,"

(MCL 208.1101 to 208.1601) by adding section 459.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

Sec. 459. (1) Until September 30, 2015, the Michigan film

office, with the concurrence of the state treasurer, may enter into

an agreement with an eligible production company providing the

company with a credit against the tax imposed by this act for

qualified job training expenditures, as provided under this

section. To qualify for the credit under this section, a company

shall meet all of the following requirements:

(a) Make qualified job training expenditures for a state

certified qualified production.

(b) After completion of the production of the state certified

qualified production in this state, submit to the office an

application in a form determined by the office with information

regarding the qualified job training expenditures, including

employment, salary, and related information required by the office.

from the office under subsection (5).

(d) Submit the qualified job training expenditure certificate

issued by the office under subsection (5) to the department under

subsection (7).

(e) Shall not be delinquent in a tax or other obligation owed

to this state or be owned or under common control of an entity that

is delinquent in a tax or other obligation owed to this state.

(2) For a qualified job training expenditure made by a

company, the company may claim a tax credit equal to 50% of the

qualified job training expenditure. A company shall not claim a

credit under this section for any of the following:

(a) A direct expenditure, or qualified personnel expenditure,

for which the company claims a credit under section 455.

(b) A direct expenditure, or qualified personnel expenditure,

for which the company claims a credit under section 367 of the

income tax act of 1967, 1967 PA 281, MCL 206.367.

for which another taxpayer claims a credit under this section, a

credit under section 455, or a credit under section 367 of the

income tax act of 1967, 1967 PA 281, MCL 206.367.

(3) A taxpayer seeking a credit under this section may submit

an application to enter into an agreement under this section to the

Michigan film office. The application shall be submitted, prior to

making qualified job training expenditures, in a form prescribed by

the Michigan film office and shall be accompanied by a $100.00

application fee and all of the information and records requested by

the office. An application fee received by the office under this

subsection shall be deposited in the Michigan film promotion fund.

The office shall not process the application until it is complete.

If the office, with the concurrence of the state treasurer,

determines to enter into an agreement under this section, the

agreement shall provide for all of the following:

(a) A unique number assigned to the state certified qualified

production for which qualified job training expenditures were

incurred by the company.

(b) A detailed description of the state certified qualified

production and the qualified job training expenditures.

information and independent certification the office and the

department deem necessary to verify qualified job training

expenditures and eligibility for the credit under this section.

(4) In determining whether to authorize a credit under this

section, the Michigan film office and the state treasurer shall

consider all of the following:

(a) The extent to which the state certified qualified

production and qualified job training expenditure may have the

effect of promoting economic development or job creation in this

state.

(b) The extent to which the credit may assist in attracting

additional private investment for the production of motion

pictures, videos, television programs, and digital media in this

state.

development of film, video, television, and digital media

production and postproduction expertise in this state.

(5) If the Michigan film office determines that a company has

complied with the terms of an agreement entered into under this

section, the office shall issue a qualified job training

expenditure certificate to the company. The company shall submit a

request to the office for a qualified job training expenditure

certificate on a form prescribed by the office, along with any

information or independent certification the office or the

department deems necessary. The office shall process each request

within 60 days after the request is complete. However, the office

may request additional information or independent certification

before issuing a certificate and need not issue the certificate

until satisfied that qualified job training expenditures and

eligibility are adequately established. The additional information

requested may include a report of expenditures audited and

certified by an independent certified public accountant. Each

qualified job training expenditure certificate shall be signed by

the Michigan film commissioner and shall include the following

information:

(a) The name of the taxpayer.

(b) A description of the state certified qualified production

and the qualified job training expenditures.

expenditures for the state certified qualified production.

(d) The date on which production of the state certified

qualified production began in this state, the date on which

production of the state certified qualified production ended in

this state, the total number of production days in this state, and

the approximate total crew size for the state certified qualified

production.

(e) The unique number assigned to the state certified

qualified production by the office under subsection (3).

(f) The company's federal employer identification number or

Michigan treasury number.

(g) Any independent certification required by the department

or the Michigan film office.

(6) Information, records, or other data received, prepared,

used, or retained by the Michigan film office under this section

that are submitted by an eligible production company and considered

by the taxpayer and acknowledged by the office as confidential

shall not be subject to the disclosure requirements of the freedom

of information act, 1976 PA 442, MCL 15.231 to 15.246. Information,

records, or other data shall only be considered confidential to the

extent that the information or records describe the commercial and

financial operations or intellectual property of the company, the

information or records have not been publicly disseminated at any

time, and disclosure of the information or records may put the

company at a competitive disadvantage.

(7) To claim a credit under this section, a company shall

submit a qualified job training expenditure certificate issued

under subsection (5) to the department. If the credit allowed under

this section exceeds the amount of taxes owed by the company under

this act for a tax year, that portion of the credit that exceeds

the tax liability of the company for the tax year shall not be

refunded but may be carried forward as a credit against tax

liability under this act in subsequent tax years for a period not

to exceed 10 tax years.

(8) The credit under this section shall be claimed after all

other credits under this act. The amount of the credit under this

section shall be reduced by a credit application and redemption fee

equal to 0.5% of the credit claimed, which shall be deducted from

the credit otherwise payable to the taxpayer claiming the credit

and be deposited by the department in the Michigan film promotion

fund.

(9) A taxpayer that willfully submits information under this

section that the taxpayer knows to be fraudulent or false, shall,

in addition to any other penalties provided by law, be liable for a

civil penalty equal to the amount of the taxpayer's credit under

this section. A penalty collected under this section shall be

deposited in the Michigan film production promotion fund.

(10) As used in this section:

(a) "Below the line crew" means persons employed by an

eligible production company for state certified qualified

production expenditures made after production begins and before

production is completed, including, but not limited to, a best boy,

boom operator, camera loader, camera operator, assistant camera

operator, compositor, dialogue editor, film editor, assistant film

editor, focus puller, Foley operator, Foley editor, gaffer, grip,

key grip, lighting crew, lighting board operator, lighting

technician, music editor, sound editor, sound effects editor, sound

mixer, steadicam operator, first assistant camera operator, second

assistant camera operator, digital imaging technician, camera

operator working with a director of photography, electric best boy,

grip best boy, dolly grip, rigging grip, assistant key for makeup,

assistant key for hair, assistant script supervisor, set

construction foreperson, lead set dresser, assistant key for

wardrobe, scenic foreperson, assistant propmaster, assistant audio

mixer, assistant boom person, assistant key for special effects,

and other similar personnel. Below the line crew does not include a

producer, director, writer, actor, or other similar personnel.

(b) "Eligible production company" means that term as defined

in section 455.

office created under chapter 2A of the Michigan strategic fund act,

1984 PA 270, MCL 125.2029 to 125.2029g.

(d) "Michigan film promotion fund" means the fund created

under chapter 2A of the Michigan strategic fund act, 1984 PA 270,

MCL 125.2029 to 125.2029g.

(e) "Qualified job training expenditure" means salary and

other expenditures paid by an eligible production company to

provide qualified personnel with on-the-job training as a member of

the below the line crew for a state certified qualified production

that is intended to upgrade or enhance the skills of the qualified

personnel and address deficiencies in skills among residents of

this state as determined by the office.

(f) "Qualified personnel" means a person who has resided in

this state for not less than 12 months, who has legal status for

employment, and who demonstrates sufficient prior experience or

training in the film and digital media industry, as certified by

the Michigan film office. Qualified personnel includes, but is not

limited to, a person who has completed a training program at a

Michigan proprietary school licensed by the department of labor and

economic growth that offers a program of instruction in film and

video production and has been designated with a classification of

instructional programs code of 50 by the department of labor and

economic growth and a person in an advanced crew position that

meets the residency requirements of this subdivision and is hired

and mentored by a key or supervisor. Qualified personnel do not

include a person with fewer than 1 or more than 4 film credits in

the same below the line crew position for which the eligible

production company claimed a credit under this section.

(g) "Qualified personnel expenditure" means that term as

defined under section 455.

(h) "State certified qualified production" means that term as

defined in section 455.