Bill Text: IL HB3616 | 2023-2024 | 103rd General Assembly | Introduced

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Bill Title: Amends the Film Production Services Tax Credit Act of 2008. Provides that an accredited production may not include intense or persistent depictions of firearm violence. Provides for the recapture of credits if the taxpayer fails to comply with the provisions of the Act because the production includes intense or persistent depictions of firearm violence. Effective immediately.

Spectrum: Partisan Bill (Republican 2-0)

Status: (Introduced) 2024-04-05 - Rule 19(a) / Re-referred to Rules Committee [HB3616 Detail]

Download: Illinois-2023-HB3616-Introduced.html

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103RD GENERAL ASSEMBLY State of Illinois 2023 and 2024 HB3616 Introduced , by Rep. Steven Reick SYNOPSIS AS INTRODUCED:
35 ILCS 16/10
35 ILCS 16/15
35 ILCS 16/35
Amends the Film Production Services Tax Credit Act of 2008. Provides that an accredited production may not include intense or persistent depictions of firearm violence. Provides for the recapture of credits if the taxpayer fails to comply with the provisions of the Act because the production includes intense or persistent depictions of firearm violence. Effective immediately.
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A BILL FOR
HB3616 LRB103 29478 HLH 55873 b
AN ACT concerning revenue.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
Section 5. The Film Production Services Tax Credit Act of
2008 is amended by changing Sections 10, 15, and 35 as follows:
(35 ILCS 16/10)
Sec. 10. Definitions. As used in this Act:
"Accredited production" means: (i) for productions
commencing before May 1, 2006, a film, video, or television
production that has been certified by the Department in which
the aggregate Illinois labor expenditures included in the cost
of the production, in the period that ends 12 months after the
time principal filming or taping of the production began,
exceed $100,000 for productions of 30 minutes or longer, or
$50,000 for productions of less than 30 minutes; and (ii) for
productions commencing on or after May 1, 2006, a film, video,
or television production that has been certified by the
Department in which the Illinois production spending included
in the cost of production in the period that ends 12 months
after the time principal filming or taping of the production
began exceeds $100,000 for productions of 30 minutes or longer
or exceeds $50,000 for productions of less than 30 minutes.
"Accredited production" does not include a production that:

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(1) is news, current events, or public programming, or
a program that includes weather or market reports;
(2) is a talk show;
(3) is a production in respect of a game,
questionnaire, or contest;
(4) is a sports event or activity;
(5) is a gala presentation or awards show;
(6) is a finished production that solicits funds;
(7) is a production produced by a film production
company if records, as required by 18 U.S.C. 2257, are to
be maintained by that film production company with respect
to any performer portrayed in that single media or
multimedia program; or
(8) is a production produced primarily for industrial,
corporate, or institutional purposes; or .
(9) is a production submitted to the Department for
certification on or after the effective date of this
amendatory Act of the 103rd General Assembly that includes
intense or persistent depictions of firearm violence, as
defined by the Department by rule under subsection (h) of
Section 15.
"Accredited animated production" means an accredited
production in which movement and characters' performances are
created using a frame-by-frame technique and a significant
number of major characters are animated. Motion capture by
itself is not an animation technique.

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"Accredited production certificate" means a certificate
issued by the Department certifying that the production is an
accredited production that meets the guidelines of this Act.
"Applicant" means a taxpayer that is a film production
company that is operating or has operated an accredited
production located within the State of Illinois and that (i)
owns the copyright in the accredited production throughout the
Illinois production period or (ii) has contracted directly
with the owner of the copyright in the accredited production
or a person acting on behalf of the owner to provide services
for the production, where the owner of the copyright is not an
eligible production corporation.
"Credit" means:
(1) for an accredited production approved by the
Department on or before January 1, 2005 and commencing
before May 1, 2006, the amount equal to 25% of the Illinois
labor expenditure approved by the Department. The
applicant is deemed to have paid, on its balance due day
for the year, an amount equal to 25% of its qualified
Illinois labor expenditure for the tax year. For Illinois
labor expenditures generated by the employment of
residents of geographic areas of high poverty or high
unemployment, as determined by the Department, in an
accredited production commencing before May 1, 2006 and
approved by the Department after January 1, 2005, the
applicant shall receive an enhanced credit of 10% in

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addition to the 25% credit; and
(2) for an accredited production commencing on or
after May 1, 2006, the amount equal to:
(i) 20% of the Illinois production spending for
the taxable year; plus
(ii) 15% of the Illinois labor expenditures
generated by the employment of residents of geographic
areas of high poverty or high unemployment, as
determined by the Department; and
(3) for an accredited production commencing on or
after January 1, 2009, the amount equal to:
(i) 30% of the Illinois production spending for
the taxable year; plus
(ii) 15% of the Illinois labor expenditures
generated by the employment of residents of geographic
areas of high poverty or high unemployment, as
determined by the Department.
"Department" means the Department of Commerce and Economic
Opportunity.
"Director" means the Director of Commerce and Economic
Opportunity.
"Illinois labor expenditure" means salary or wages paid to
employees of the applicant for services on the accredited
production.
To qualify as an Illinois labor expenditure, the
expenditure must be:

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(1) Reasonable in the circumstances.
(2) Included in the federal income tax basis of the
property.
(3) Incurred by the applicant for services on or after
January 1, 2004.
(4) Incurred for the production stages of the
accredited production, from the final script stage to the
end of the post-production stage.
(5) Limited to the first $25,000 of wages paid or
incurred to each employee of a production commencing
before May 1, 2006 and the first $100,000 of wages paid or
incurred to each employee of a production commencing on or
after May 1, 2006 and prior to July 1, 2022. For
productions commencing on or after July 1, 2022, limited
to the first $500,000 of wages paid or incurred to each
nonresident or resident employee of a production company
or loan out company that provides in-State services to a
production, whether those wages are paid or incurred by
the production company, loan out company, or both, subject
to withholding payments provided for in Article 7 of the
Illinois Income Tax Act. For purposes of calculating
Illinois labor expenditures for a television series, the
nonresident wage limitations provided under this
subparagraph are applied to the entire season.
(6) For a production commencing before May 1, 2006,
exclusive of the salary or wages paid to or incurred for

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the 2 highest paid employees of the production.
(7) Directly attributable to the accredited
production.
(8) (Blank).
(9) Prior to July 1, 2022, paid to persons resident in
Illinois at the time the payments were made. For a
production commencing on or after July 1, 2022, paid to
persons resident in Illinois and nonresidents at the time
the payments were made. For purposes of this subparagraph,
only wages paid to nonresidents working in the following
positions shall be considered Illinois labor expenditures:
Writer, Director, Director of Photography, Production
Designer, Costume Designer, Production Accountant, VFX
Supervisor, Editor, Composer, and Actor, subject to the
limitations set forth under this subparagraph. For an
accredited Illinois production spending of $25,000,000 or
less, no more than 2 nonresident actors' wages shall
qualify as an Illinois labor expenditure. For an
accredited production with Illinois production spending of
more than $25,000,000, no more than 4 nonresident actor's
wages shall qualify as Illinois labor expenditures.
(10) Paid for services rendered in Illinois.
"Illinois production spending" means the expenses incurred
by the applicant for an accredited production, including,
without limitation, all of the following:
(1) expenses to purchase, from vendors within

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Illinois, tangible personal property that is used in the
accredited production;
(2) expenses to acquire services, from vendors in
Illinois, for film production, editing, or processing; and
(3) for a production commencing before July 1, 2022,
the compensation, not to exceed $100,000 for any one
employee, for contractual or salaried employees who are
Illinois residents performing services with respect to the
accredited production. For a production commencing on or
after July 1, 2022, the compensation, not to exceed
$500,000 for any one employee, for contractual or salaried
employees who are Illinois residents or nonresident
employees, subject to the limitations set forth under
Section 10 of this Act.
"Loan out company" means a personal service corporation or
other entity that is under contract with the taxpayer to
provide specified individual personnel, such as artists, crew,
actors, producers, or directors for the performance of
services used directly in a production. "Loan out company"
does not include entities contracted with by the taxpayer to
provide goods or ancillary contractor services such as
catering, construction, trailers, equipment, or
transportation.
"Qualified production facility" means stage facilities in
the State in which television shows and films are or are
intended to be regularly produced and that contain at least

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one sound stage of at least 15,000 square feet.
Rulemaking authority to implement Public Act 95-1006, if
any, is conditioned on the rules being adopted in accordance
with all provisions of the Illinois Administrative Procedure
Act and all rules and procedures of the Joint Committee on
Administrative Rules; any purported rule not so adopted, for
whatever reason, is unauthorized.
(Source: P.A. 102-558, eff. 8-20-21; 102-700, eff. 4-19-22.)
(35 ILCS 16/15)
Sec. 15. Powers of the Department. The Department, in
addition to those powers granted under the Civil
Administrative Code of Illinois, is granted and has all the
powers necessary or convenient to carry out and effectuate the
purposes and provisions of this Act, including, but not
limited to, power and authority to:
(a) Adopt rules deemed necessary and appropriate for the
administration of the tax credit program; establish forms for
applications, notifications, contracts, or any other
agreements; and accept applications at any time during the
year.
(b) Assist applicants pursuant to the provisions of this
Act to promote, foster, and support film production and its
related job creation or retention within the State.
(c) Gather information and conduct inquiries, in the
manner and by the methods as it deems desirable, including any

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information required for the Department to comply with Section
45 and, without limitation, gathering information with respect
to applicants for the purpose of making any designations or
certifications necessary or desirable or to gather information
to assist the Department with any recommendation or guidance
in the furtherance of the purposes of this Act, including, but
not limited to, information as to whether the applicant
participated in training, education, and recruitment programs
that are organized in cooperation with Illinois colleges and
universities, labor organizations, and the motion picture
industry, and are designed to promote and encourage the
training and hiring of Illinois residents who represent the
diversity of the Illinois population.
(d) Provide for sufficient personnel to permit
administration, staffing, operation, and related support
required to adequately discharge its duties and
responsibilities described in this Act from funds as may be
appropriated by the General Assembly for the administration of
this Act.
(e) Require applicants, upon written request, to issue any
necessary authorization to the appropriate federal, state, or
local authority for the release of information concerning a
project being considered under the provisions of this Act,
with the information requested to include, but not be limited
to, financial reports, returns, or records relating to the
applicant or the accredited production.

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(f) Require that an applicant must at all times keep
proper books of record and account in accordance with
generally accepted accounting principles consistently applied,
with the books, records, or papers related to the accredited
production in the custody or control of the taxpayer open for
reasonable Department inspection and audits, and including,
without limitation, the making of copies of the books,
records, or papers, and the inspection or appraisal of any of
the assets of the applicant or the accredited production.
(g) Take whatever actions are necessary or appropriate to
protect the State's interest in the event of bankruptcy,
default, foreclosure, or noncompliance with the terms and
conditions of financial assistance or participation required
under this Act, including the power to sell, dispose, lease,
or rent, upon terms and conditions determined by the Director
to be appropriate, real or personal property that the
Department may receive as a result of these actions.
(h) Adopt rules for the purpose of determining whether a
production includes intense or persistent depictions of
firearm violence, using as guidance in the adoption of those
rules the Motion Picture Association of America's
classification and rating rules.
For the purpose of this subsection (h):
"Firearm" has the meaning given to that term in
Section 1.1 of the Firearm Owners Identification Card Act.
"Intense or persistent depictions of firearm violence"

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means one or more depictions of a firearm being used to
commit violence of a type and nature that would typically
result in an "R" rating from the Motion Picture
Association of America on the basis of violence.
If the Department determines that a production that is
accredited on or after the effective date of this amendatory
Act of the 103rd General Assembly does not comply with the
provisions of this Act because the production includes intense
or persistent depictions of firearm violence, the Department
shall provide notice to the taxpayer of the alleged
noncompliance and allow the taxpayer a hearing under the
provisions of the Illinois Administrative Procedure Act. The
Department's decision resulting from a hearing conducted under
this subsection is a final administrative decision for
purposes of review under the Administrative Review Law. If,
after allowing the taxpayer to exhaust all administrative
remedies, it is determined that the taxpayer failed to comply
with the provisions of this Act because the production
includes intense or persistent depictions of firearm violence,
the Department of Revenue shall recapture from the taxpayer
the entire credit amount previously awarded under this Act for
that production.
(Source: P.A. 95-720, eff. 5-27-08.)
(35 ILCS 16/35)
Sec. 35. Issuance of Tax Credit Certificate.

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(a) In order to qualify for a tax credit under this Act, an
applicant must file an application, on forms prescribed by the
Department, providing information necessary to calculate the
tax credit, and any additional information as required by the
Department.
(a-5) For productions that are accredited on or after the
effective date of this amendatory Act of the 103rd General
Assembly, in addition to any other information required by the
Department under subsection (a), as part of the application
process, the Department shall require the applicant to (i)
certify that the production will not include intense or
persistent depictions of firearm violence and (ii) agree that,
if the Department determines that the production does include
intense or persistent depictions of firearm violence, the
Department may void the tax credit agreement and recapture any
credit amounts previously awarded to the applicant for that
particular production.
(b) Upon satisfactory review of the application, the
Department shall issue a Tax Credit Certificate stating the
amount of the tax credit to which the applicant is entitled.
(Source: P.A. 95-720, eff. 5-27-08.)
Section 99. Effective date. This Act takes effect upon
becoming law.