SB 5502 — Modifying Washington state's motion picture and film industries tax credit.

S-1423.1SUBSTITUTES-0720.1SENATE SENATE BILL 5502State of Washington65th Legislature2017 Regular SessionBy Senate Agriculture, Water, Trade & Economic Development (originally sponsored by Senators Becker, Frockt, Baumgartner, Fain, Rolfes, Rivers, Billig, Zeiger, Darneille, Keiser, Hunt, and Saldaña)READSaldañaRead FIRSTfirst TIMEtime 02/15/17.AN01/26/17. ACT Relating to modifying Washington state's motion picture and film industries tax credit;

Referred to Committee on Agriculture, Water, Trade & Economic Development.AN ACT Relating to modifying Washington state's motion picture and film industries tax credit;

It is not intended to create a private right of action by any party or be used to determine eligibility for preferential tax treatment.(2) The legislature categorizes these tax preferences as ones intended to create or retain jobs as indicated in RCW 82.32.808(2)(c).(3) It is the legislature's specific public policy objective to increase the viability of the motion picture and film industry and associated creative industries in Washington state. It is the legislature's intent to increase the credit available to qualifying activities in order to attract additional motion picture and film projects, thereby increasing family-wage jobs.(4) If a review finds that the jobs attributable to these projects increase by at least ten percent over the jobs in the state since 2016, then the legislature intends to extend the expiration date of the tax preference.(5) In order to obtain the data necessary to perform the review in subsection (4) of this section, the joint legislative audit and review committee may refer to data provided to the department of revenue pursuant to RCW 82.04.4489(9) and the annual survey required under RCW 43.365.040.NEW SECTION.  Sec. 2.  A new section is added to chapter 82.04 RCW to read as follows:(1) In addition to the annual monetary limitations of RCW 82.04.4489(6),82.04.4489, a credit is allowed against the tax imposed under this chapter for contributions made by a person to a Washington motion picture competitiveness program for a major motion picture production that portrays a significant historical event in Washington.(2)(a)Washington.(2) The credit in subsection (1) of this section is available for contributionscalendar madeyear in2017, calendar yearsyear 2017, 2018, and calendar year 2019.

However, the statewideaggregate amount of the credit that can be claimed for all three calendar years may not exceed three million dollars.(b)dollars.(3) CreditsThe arecredit availableunder onthis section is not subject to the annual per person limits in RCW 82.04.4489(3).(4) Unless otherwise indicated, the credit under this section is subject to all other provisions of RCW 82.04.4489.(5) If a firstmajor in-timemotion basis.picture that portrays a significant event in Washington has not begun filming in Washington by July 1, 2019, any credits previously awarded under this section and used to reduce any tax under this chapter must be repaid to the department by December 31, 2019.

TheIf departmenta mustcredit disallowwas anyawarded credits,under orthis portionsection, thereof,but thatwas wouldnot causeused, the credit is void.(6) For the purposes of this section, a "major motion picture that portrays a significant event in Washington" means a motion picture being filmed for theatrical release with a total amountbudget of creditsat claimedleast undertwenty thismillion dollars that portrays an event that occurred, at least in part in Washington state, during the twentieth century.(7) This section expires January 1, 2020.Sec. 3.  RCW 82.04.4489 and 2012 c 189 s 4 are each amended to exceedread as follows:(1) Subject to the limitlimitations in (a)this ofsection, a credit is allowed against the tax imposed under this subsectionchapter (2).for contributions made by a person to a Washington motion picture competitiveness program.(2) The person must make the contribution before claiming a credit authorized under this section.

If this limitation is reached, the department must notify all Washington motion picture competitiveness programs that the statewide limit has been met and all credits claimed in excess of the statewide limit must be repaid.(3) The credit under this section is not subject to the annual per person limits in RCW 82.04.4489 (2) and (3).(4) Unless otherwise indicated, the credit under this section is subject to all other provisions of RCW 82.04.4489.(5)(a) If a major motion picture that portrays a significant historical event in Washington has not begun filming in Washington by July 1, 2019:(i) Any credits previously awarded and claimed under this section must be repaid to the department by December 31, 2019;

and(ii) Any credits previously awarded, but not claimed, under this section may not be claimed as of July 1, 2019.

If a credit was awarded under this section, but was not used, the credit is void.(b) The Washington motion picture competitiveness program must provide written notification to the department by August 1, 2019, as to whether a major motion picture that portrays a significant historical event in Washington began filming in Washington by July 1, 2019.(6) The department must provide written notice to any person who must repay tax credits claimed under this section.

The notice must indicate the amount of tax due and provide that the tax be paid within thirty days from the date of the notice, except as provided in subsection (5)(a) of this section.

The department may not assess penalties and interest as provided in chapter 82.32 RCW on the amount due in the initial notice if the amount due is paid by the due date specified in the notice, or any extension thereof.(7) For the purposes of this section, a "major motion picture that portrays a significant historical event in Washington" means a motion picture that a Washington motion picture competitiveness program determines is being filmed for theatrical release with a total budget of at least twenty million dollars that portrays an event that occurred, at least in part in Washington state, during the twentieth century.(8) This section expires January 1, 2020.Sec. 3.  RCW 82.04.4489 and 2012 c 189 s 4 are each amended to read as follows:(1) Subject to the limitations in this section, a credit is allowed against the tax imposed under this chapter for contributions made by a person to a Washington motion picture competitiveness program.(2) The person must make the contribution before claiming a credit authorized under this section.