March 4, 2008, Introduced by Senators BIRKHOLZ, ALLEN, VAN WOERKOM, KUIPERS, STAMAS, BROWN, GILBERT, JANSEN, HARDIMAN, McMANUS, PAPPAGEORGE, RICHARDVILLE, JELINEK, KAHN, GEORGE, GARCIA, JACOBS, CHERRY, WHITMER, PRUSI, GLEASON, BARCIA, THOMAS, ANDERSON, SCHAUER, CLARKE, HUNTER and OLSHOVE and referred to the Committee on Commerce and Tourism.
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.
(c) Receive a qualified job training expenditures certificate
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 my 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 for which the company claims a credit
under section 455.
(b) A direct expenditure for which the company claims a credit
under section 367 of the income tax act of 1967, 1967 PA 281, MCL
206.367.
(c) A direct expenditure 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 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.
(c) A requirement that the company provide the office with the
information and independent certification the office and the
department deem necessary to verify qualified job training
expenditures investment 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.
(c) The extent to which the credit will encourage the
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.
(c) The amount of the company's qualified job training
expenditures for the state certified qualified production.
(d) The date on which production of the state certified
qualified production began in this state, the state 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 and records submitted by a taxpayer to the
Michigan film office under this section shall be considered
confidential and exempt from disclosure under the freedom of
information act, 1976 PA 442, MCL 15.231 to 15.246, to the extent
that the information or records describe the commercial and
financial operations of the taxpayer, the information or records
have not been publicly disseminated at any time, and disclosure of
the information or records might put the taxpayer at a competitive
disadvantage. A taxpayer submitting materials under this section
shall specifically designate any information and records that the
taxpayer deems confidential. The office may release any information
and records submitted under this section that have not been
designated confidential by the taxpayer.
(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 paid by 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, 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.
(c) "Michigan film office" or "office" means the Michigan film
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.
(g) "State certified qualified production" means that term as
defined in section 455.