AB 20 — Revises provisions relating to transferable tax credits for film and other productions. (BDR 32-267)

(ReprintedAssembly withBill amendmentsNo. adopted on April 16, 2021) FIRST REPRINT A.B.

2020–Committee Aon SSEMBLYRevenue BCHAPTER.......... ILLN O.

20–COMMITTEE ON R EVENUE (ON B EHALF OF THE O FFICE OF ECONOMIC D EVELOPMENT IN THE OFFICE OF THE G OVERNOR ) PREFILED N OVEMBER 18, 2020 ____________ Referred to Committee on Revenue SUMMARY—Revises provisions relating to transferable tax credits for film and other productions.

(BDR 32-267) FISCAL NOTE:

Effect on Local Government:

No.

Effect on the State:

Yes.

~ EXPLANATION – Matter in bolded italics is new;

matter between brackets [omitted material] is material to be omitted.

Existing law establishes a program for the issuance of transferable tax credits by the Office of Economic Development to the production company of a motion picture or other qualified production, based upon qualified direct production expenditures made for the purchase of personal property or services from a Nevada business.busiSection 1 of this bill revises the types of qualified productions for which a production company may apply for transferable tax credits by:

(NRS 360.758-360.7598) Section 1 of this bill revises the types of qualified productions for which a production company may apply for transferable tax credits by:

and (3) making an epiExistingepisode lawof requires a productionseries companya to provide the Office with an audit of the qualified productionproduction. not later than 90 days after the completion of principal photography or postproduction.

(NRS 360.759)360.7586) SectionExisting 2law ofrequires thisa billproduction requirescompany to provide the -Office *AB20_R1*with –an 2audit –of the qualified production not later than 90 days after the completion of principal audit to be submitted within 270 days after the completion of principal photography or postproduction, unless the Office agrees to extend the period for submitting the audit by not more than 90 days.

Existing law provides that in order for tangible personal property that is acquired by a Nevada business from a vendor outside this State for immediate resale,production rentalexpenditure, ornot leasemore tothan a50 productionpercent companyof tothe beproperty consideredpurchased, arentedt qualifiedor directleased productionby expenditure,the notproduction morecompany thanfor 50the percentqualified ofproduction themay propertybe purchased,acquired rented and purchased, rented or leased in that manner.

(1) removes the requirement for qualified direct production expenditures to be made on or after the date on which the production company submits an application for transferable tax credits to the - 81st Session (2021) – 2 – Office and, instead, requires qualified direct production expenditures to be made theduring calculation of the costsperiod thatin constitutewhich athe qualified direct production expenditureis byproduced; a production company to acquire tangible personal property as an asset to be performed according to regulations adopted by the Office.

and (2) requires by a production company to acquire tangible personal property as an asset to benditure performed according to regulations adopted by the Office.

(NRS 360.7592) Section 4 of this bill authorizes the Office to also withhold the transferrable tax credits, in whole or in part, for violations of state or local law or if the production company isisn purposefound ofto obtaininghave thesubmitted taxany credits.tement,false statement, representation or certification for the THEpurpose PEOPLEof OFobtaining THEthe STATEtax OFcredits. NEVADA, REPRESENTED IN SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS:

SectionEXPLANATION 1.– Matter in bolded italics is new;

matter between brackets [omitted material] is material to be omitted.

THE SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS:D IN Section 1.

- *AB20_R1* – 3 – [(g)] (f) A reality show .

(b)- A81st productionSession that(2021) is– primarily3 – corporate or institutional use.marily produced for industrial, corporate(c) A telethon or institutionalany use.production that solicits money, other than a production which is produced for national distribution.

(c) A telethon or any production that solicits money, other than a production which is produced for national distribution.

A production company that produces a qualified production in this State in whole or in part may apply to the Office of Economic Development for a certificate of eligibility forfore Office transferable tax credits for any qualified direct production expenditures.

- *AB20_R1* – 4 – [and] If the Office approves the application, the Office shall calculate the estimated amount of the transferable tax credits pursuantpur3. to NRS 360.7592, 360.7593 and 360.7594.

3.

(d)- Provide81st proofSession satisfactory(2021) to– the4 Office– that at least 60 percent of the direct production expenditures for:for:at at least 60 (1) Preproduction;

(1) Preproduction;

(1) Shows that the qualified production incurred qualified direct production(2) expendituresIs ofcertified $500,000by oran more;independent certified public accountant in this State who is approved by the Office;

and (2) Is certified by an independent certified public accountant in this State who is approved by the Office;

-contain:An *AB20_R1*application –submitted 5pursuant –to 4.subsection 3 must (a) A script, storyboard or synopsis of the qualified production;

An application submitted pursuant to subsection 3 must contain:

(a) A script, storyboard or synopsis of the qualified production;

(e)- Details81st regardingSession the(2021) financing– of5 the– project, including, without limitation, any information relating to a binding financing commitment, loan application, commitment letter or investment letter;

If the Office approves an application for a certificate of eligibility for transferable tax credits pursuant to this section, the Office shall immediately forward a copy of the certificate of eligibility which identifies the estimated amount of the tax credits available pursuant to NRS 360.7592 to:

Within 30 days after the receipt of the notice, the production company shall make an irrevocable declaration of the amount of transferable taxtaxl credits that will be applied to each fee or tax set forth in subsection - *AB20_R1* – 6 – 1, thereby accounting for all of the credits which will be issued.

The Office shall notify the Department and the Nevada Gaming- Control81st BoardSession of(2021) all– transferable6 tax– credits issued, segregated by each fee or tax set forth in subsection 1, and the amount of any transferable tax credits transferred.

(4) The application review process;

Qualified direct production expenditures must be for purchases, rentals or leases of tangible personal property or services from a Nevada business [on or after the date on which an applicant submits an application for the transferable tax credits,] during the period in which a qualified production is produced, must be customary and reasonable and must relate to: