81(R) SB 1929 - Enrolled version

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�	S.B.�No.�1929

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�	AN ACT
�	relating to the designation of qualified media production locations
�	in media production development zones and to exemptions from the
�	sales and use tax for items used for media production facilities in
�	qualified media production locations.
�	��BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
�	��SECTION�1.��Subtitle F, Title 4, Government Code, is amended
�	by adding Chapter 485A to read as follows:
�	CHAPTER 485A. MEDIA PRODUCTION DEVELOPMENT ZONES
�	SUBCHAPTER A. GENERAL PROVISIONS
�	��Sec.�485A.001.��SHORT TITLE. This chapter may be cited as
�	the Media Production Development Zone Act.
�	��Sec.�485A.002.��DEFINITIONS. In this chapter:
�	��(1)��"Media production facility" means a structure,
�	building, or room used for the specific purpose of creating a moving
�	image project. The term includes but is not limited to:
�	��(A)��a soundstage and scoring stage;
�	��(B)��a production office;
�	��(C)��an editing facility, an animation production
�	facility, and a video game production facility;
�	��(D)��a storage and construction space; and
�	��(E)��a sound recording studio and motion capture
�	studio.
�	��(2)��"Media production development zone" means an area
�	recognized by a nominating body and approved by the office as a
�	media production development zone under this chapter.
�	��(3)��"Moving image project" means a visual and sound
�	production, including a film, television program, national or
�	multistate commercial, or digital interactive media production.
�	The term does not include a production that is obscene, as defined
�	by Section 43.21, Penal Code.
�	��(4)��"Nominating body" means the governing body of a
�	municipality or county, or a combination of the governing bodies of
�	municipalities or counties, that:
�	��(A)��recognizes a qualified area as a media
�	production development zone; and
�	��(B)��nominates and applies for designation of a
�	location in a media production development zone as a qualified
�	media production location.
�	��(5)��"Office" means the Music, Film, Television, and
�	Multimedia Office within the office of the governor.
�	��(6)��"Qualified media production location" means a
�	location in a media production development zone that has been
�	designated by the office as a qualified media production location
�	in accordance with this chapter.
�	��(7)��"Qualified person" means a person certified as a
�	qualified person under Section 485A.201.
�	��Sec.�485A.003.��JURISDICTION OF MUNICIPALITY. For the
�	purposes of this chapter, territory in the extraterritorial
�	jurisdiction of a municipality is considered to be in the
�	jurisdiction of the municipality.
�	[Sections 485A.004-485A.050 reserved for expansion]
�	SUBCHAPTER B. OFFICE POWERS AND DUTIES IN GENERAL
�	��Sec.�485A.051.��GENERAL POWERS AND DUTIES. (a)��Except as
�	provided by Subsection (b), the office shall administer and monitor
�	the implementation of this chapter.
�	��(b)��The office and the comptroller's office shall jointly
�	establish criteria and procedures for:
�	��(1)��approving a qualified area recognized as a media
�	production development zone by a nominating body;
�	��(2)��designating a qualified location in a media
�	production development zone as a qualified media production
�	location; and
�	��(3)��certifying a person as a qualified person under
�	Section 485A.201.
�	��Sec.�485A.052.��RULEMAKING AUTHORITY. The office shall
�	adopt rules necessary to implement this chapter.
�	��Sec.�485A.053.��ANNUAL REPORT. On or before December 15 of
�	each year, the office shall submit to the governor, the
�	legislature, and the Legislative Budget Board a report that:
�	��(1)��evaluates the effectiveness of the media
�	production development zone program; and
�	��(2)��describes the use of state and local incentives
�	under this chapter and their effect on revenue.
�	��Sec.�485A.054.��ASSISTANCE. The office shall provide to
�	persons desiring to construct, expand, maintain, improve, or
�	renovate a media production facility in a qualified media
�	production location information and appropriate assistance
�	relating to the required legal authorization, including a permit,
�	certificate, approval, and registration, necessary in this state to
�	accomplish that objective.
�	[Sections 485A.055-485A.100 reserved for expansion]
�	SUBCHAPTER C. APPROVAL OF MEDIA PRODUCTION DEVELOPMENT ZONE AND
�	DESIGNATION OF QUALIFIED MEDIA PRODUCTION LOCATIONS
�	��Sec.�485A.101.��CRITERIA FOR MEDIA PRODUCTION DEVELOPMENT
�	ZONE RECOGNITION. To be approved as a media production development
�	zone, an area:
�	��(1)��must be in a metropolitan statistical area, the
�	principal municipality of which:
�	��(A)��has a population of more than 250,000; and
�	��(B)��has the adequate workforce, infrastructure,
�	facilities, or resources to support the production and completion
�	of moving image projects;
�	��(2)��must be recognized as a media production
�	development zone by ordinance or order, as appropriate, of a
�	municipality or the commissioners court of a county; and
�	��(3)��will contain a qualified media production location
�	within its geographical boundaries that meets the criteria under
�	Section 485A.102.
�	��Sec.�485A.102.��CRITERIA FOR QUALIFIED MEDIA PRODUCTION
�	LOCATION DESIGNATION. To be designated a qualified media
�	production location, a location must be land or other real property
�	that is in a media production development zone and will:
�	��(1)��be used exclusively to build or construct one or
�	more media production facilities;
�	��(2)��if the real property is a building or other
�	facility, be renovated solely for the purpose of being converted
�	into one or more media production facilities; or
�	��(3)��if the real property consists solely of one or more
�	media production facilities, be improved or renovated for that
�	purpose or will be expanded into one or more additional media
�	production facilities.
�	��Sec.�485A.103.��MAXIMUM NUMBER OF ZONES AND LOCATIONS
�	THROUGHOUT STATE. (a)��There may not be more than 10 media
�	production development zone designations under this chapter at any
�	one time.
�	��(b)��There may not be more than five media production
�	development zones under this chapter in a region at any one time.
�	��(c)��Each media production development zone may not contain
�	more than three media production locations at any one time.
�	��(d)��For purposes of Subsection (b), the office shall divide
�	the state into regions consisting of geographical boundaries
�	prescribed by office rule.
�	��Sec.�485A.104.��NOMINATION OF QUALIFIED MEDIA PRODUCTION
�	LOCATION. (a)��The governing body of a municipality or county,
�	individually or in combination with other municipalities or
�	counties, by ordinance or order, as appropriate, may nominate as a
�	qualified media production location a location within its
�	jurisdiction that meets the criteria under Section 485A.102.
�	��(b)��The governing body of a county may not nominate
�	territory in a municipality, including extraterritorial
�	jurisdiction of a municipality, to be included in a proposed
�	qualified media production location unless the governing body of
�	the municipality also nominates the territory and together with the
�	county files a joint application under Section 485A.106.
�	��Sec.�485A.105.��NOMINATING ORDINANCE OR ORDER. An ordinance
�	or order nominating a location as a qualified media production
�	location must:
�	��(1)��describe precisely both the media production
�	development zone in which the location is to be included and the
�	proposed location by a legal description or reference to municipal
�	or county boundaries;
�	��(2)��state a finding that the location meets the
�	requirements of this chapter and that the media production
�	development zone in which the location is to be included has been
�	recognized as a zone by ordinance or order, as appropriate, by the
�	nominating body;
�	��(3)��summarize briefly the local financial incentives,
�	including tax incentives, that, at the election of the nominating
�	body, will apply to a qualified person;
�	��(4)��contain a brief description of the project or
�	activity to be conducted by a qualified person at the location;
�	��(5)��nominate the location as a qualified media
�	production location; and
�	��(6)��contain an economic impact analysis from an
�	economic expert.
�	��Sec.�485A.106.��APPLICATION FOR DESIGNATION. (a)��For a
�	location in a media production development zone to be designated as
�	a qualified media production location, the nominating body, after
�	nominating the location as a qualified media production location,
�	must send to the office a written application for designation of the
�	location in the zone as a qualified media production location.
�	��(b)��The application must include:
�	��(1)��a certified copy of the ordinance or order, as
�	appropriate, nominating the location as a media production
�	location;
�	��(2)��a certified copy of the ordinance or order, as
�	appropriate, recognizing the zone in which the location is to be
�	included as a media production development zone;
�	��(3)��appropriate supporting documents demonstrating
�	that the location qualifies for designation as a qualified media
�	production location;
�	��(4)��an estimate of the economic impact of the
�	designation of the location as a qualified media production
�	location on the revenues of the governmental entity or entities
�	nominating the location as a qualified media production location,
�	considering the financial incentives and benefits contemplated;
�	��(5)��an economic impact analysis of the proposed
�	project or activities to be conducted at the proposed qualified
�	media production location, which must include:
�	��(A)��an estimate of the amount of revenue to be
�	generated to the state by the project or activity;
�	��(B)��an estimate of any secondary economic
�	benefits to be generated by the project or activity;
�	��(C)��an estimate of the amount of state taxes to be
�	exempted, as provided by Section 151.3415, Tax Code; and
�	��(D)��any other information required by the
�	comptroller for purposes of making the certification required by
�	Section 485A.109(b); and
�	��(6)��any additional information the office requires.
�	��(c)��Information required by Subsection (b) is for
�	evaluation purposes only.
�	��(d)��The economic impact analysis required by Subsection
�	(b)(5) must also be submitted to the comptroller.
�	��Sec.�485A.107.��ADVISORY COMMITTEE. (a)��The media
�	production advisory committee is composed of the following members:
�	��(1)��the director of the Texas Film Commission division
�	of the governor's office;
�	��(2)��one representative of the comptroller's office,
�	appointed by the comptroller; and
�	��(3)��subject to Subsection (b), nine representatives
�	appointed by the comptroller.
�	��(b)��In making appointments to the advisory committee under
�	Subsection (a)(3), the comptroller shall provide for a balanced
�	representation of the different geographic regions of this state.
�	Each of the following types of companies or organizations must be
�	represented by at least one member serving on the advisory
�	committee:
�	��(1)��animation production companies;
�	��(2)��film and television production companies;
�	��(3)��labor or workforce organizations;
�	��(4)��equipment vendors;
�	��(5)��the video gaming industry; and
�	��(6)��commercial production companies.
�	��(c)��The director of the Texas Film Commission division of
�	the office of the governor serves as the presiding officer of the
�	advisory committee. The advisory committee shall meet at the call
�	of the presiding officer.
�	��(d)��The advisory committee, through review of applications
�	submitted under Section 485A.108, shall make recommendations to the
�	office for designation of qualified media production locations
�	under this subchapter. The office may provide administrative
�	support to the advisory committee.
�	��(e)��Section 2110.008 does not apply to the advisory
�	committee.
�	��Sec.�485A.108.��REVIEW OF APPLICATION. (a)��On receipt of
�	an application for the designation of a qualified media production
�	location, the office shall review the application to determine
�	whether the nominated location qualifies for designation as a
�	qualified media production location under this chapter.
�	��(b)��The office shall consider recommendations submitted by
�	the media production advisory committee with respect to
�	applications received by the office.
�	��Sec.�485A.109.��DESIGNATION. (a)��If the office determines
�	that a nominated location for which a designation application has
�	been received satisfies the criteria under Section 485A.102 and on
�	recommendation of the media production advisory committee, the
�	office may designate the nominated location as a qualified media
�	production location unless the office determines that the
�	designation request should be denied for the reasons specified by
�	Section 485A.110.
�	��(b)��A designation of a qualified media production location
�	may not be made under this section until the comptroller, based on
�	an evaluation of the economic impact analysis submitted under
�	Section 485A.106(b)(5), certifies that the project or activity to
�	be conducted at the designated location will have a positive impact
�	on state revenue.
�	��(c)��On designation of the first qualified media production
�	location in a media production development zone recognized by the
�	nominating body for that purpose, the office shall simultaneously
�	approve the media production development zone.
�	��Sec.�485A.110.��DENIAL OF APPLICATION; NOTICE. (a)��The
�	office shall deny an application for the designation of a qualified
�	media production location if:
�	��(1)��the��office determines that the nominated
�	location does not satisfy the criteria under Section 485A.102;
�	��(2)��the office determines that the number of media
�	production location designations or number of approved media
�	production development zones at the time of the application are at
�	the maximum limit prescribed by Section 485A.103; or
�	��(3)��the comptroller has not certified that the
�	proposed project or activity to be conducted at the location will
�	have a positive impact on state revenue.
�	��(b)��The office shall inform the nominating body of the
�	specific reasons for denial of an application under this section.
�	��Sec.�485A.111.��PERIOD OF APPROVAL OR DESIGNATION. (a)��An
�	area that qualifies under this subchapter may be approved by the
�	office as a media production development zone for a maximum of five
�	years after the date the last qualified media production location
�	was designated within the zone's boundaries.
�	��(b)��A location may be designated as a qualified media
�	production location, and may be eligible for the sales and use tax
�	exemption as provided by Section 151.3415, Tax Code, for a maximum
�	of two years.
�	��(c)��Except as provided by Section 485A.112, a media
�	production development zone approval and qualified media
�	production location designation remains in effect until September 1
�	of the final year of the approval or designation, as appropriate.
�	��Sec.�485A.112.��REMOVAL OF APPROVAL OR DESIGNATION.
�	(a)��The office may remove the approval of an area recognized as a
�	media production development zone if the area no longer meets the
�	criteria for that recognition under this chapter or by office rule
�	adopted under this chapter.
�	��(b)��The office may remove the designation of a location as a
�	qualified media production location if the location no longer meets
�	the criteria for that designation under this chapter or by office
�	rule adopted under this chapter.
�	��(c)��The removal of a designation or approval does not affect
�	the validity of a tax incentive granted or accrued before the
�	removal.
�	[Sections 485A.113-485A.150 reserved for expansion]
�	SUBCHAPTER D. ADMINISTRATION OF MEDIA PRODUCTION LOCATION
�	��Sec.�485A.151.��ANNUAL REPORT. (a)��For purposes of this
�	section, the governing body of a qualified media production
�	location is the governing body of the municipality or county, or the
�	governing bodies of the combination of municipalities or counties,
�	that applied to have the location designated as a qualified media
�	production location.
�	��(b)��Not later than October 1 of each year, the governing
�	body of a qualified media production location shall submit to the
�	office a report in the form prescribed by the office.
�	��(c)��The report must include for the year preceding the date
�	of the report:
�	��(1)��the use of local incentives for which the
�	governing body provided in the ordinance or order nominating the
�	qualified media production location and the effect of those
�	incentives on revenue;
�	��(2)��the number of qualified persons engaging in a
�	project or activity related to a media production facility at the
�	qualified media production location; and
�	��(3)��the types of projects or activities engaged or to
�	be engaged in by qualified persons at the qualified media
�	production location.
�	[Sections 485A.152-485A.200 reserved for expansion]
�	SUBCHAPTER E. QUALIFIED PERSON DESIGNATION AND CERTIFICATION
�	��Sec.�485A.201.��QUALIFIED PERSON. A person is a qualified
�	person if the office, for the purpose of state benefits under this
�	chapter, or the nominating body of a qualified media production
�	location, for the purpose of local benefits, certifies that the
�	person, not later than 18 months after the date of the designation:
�	��(1)��will build or construct one or more media
�	production facilities at a location;
�	��(2)��will renovate a building or facility solely for
�	the purpose of being converted into one or more media production
�	facilities at a location; or
�	��(3)��will renovate or expand one or more media
�	production facilities at a location.
�	��Sec.�485A.202.��PROHIBITION ON QUALIFIED PERSON
�	CERTIFICATION. If the office determines that the nominating body
�	of a qualified media production location is not complying with this
�	chapter, the office shall prohibit the certification of a qualified
�	person at the location until the office determines that the
�	nominating body is complying with this chapter.
�	��Sec.�485A.203.��DURATION OF DESIGNATION. Except as provided
�	by Section 485A.204, the office's certification of a person as a
�	qualified person is effective until the second anniversary of the
�	date the designation is made, regardless of whether the designation
�	of the qualified media production location at which the qualified
�	person is to perform its commitments under this chapter is
�	terminated before that date.
�	��Sec.�485A.204.��REMOVAL OF DESIGNATION. The office shall
�	remove the certification of a qualified person for state benefits
�	under this chapter if the office determines that the construction,
�	renovation, improvement, maintenance, or expansion of a media
�	production facility has not been completed at the qualified media
�	production location for which it has received its certification
�	within the period prescribed by Section 485A.201.
�	[Sections 485A.205-485A.250 reserved for expansion]
�	SUBCHAPTER F. MEDIA PRODUCTION LOCATION BENEFITS
�	��Sec.�485A.251.��EXEMPTION FROM SALES AND USE TAX. Certain
�	items are exempt from the sales and use tax as provided by Section
�	151.3415, Tax Code.
�	��Sec.�485A.252.��MONITORING QUALIFIED PERSON COMMITMENTS.
�	(a)��The office may monitor a qualified person to determine whether
�	and to what extent the qualified person has followed through on the
�	commitments made by the qualified person under this chapter.
�	��(b)��The office may determine that the qualified person is
�	not entitled to a tax exemption under Section 151.3415, Tax Code, if
�	the office determines that the qualified person:
�	��(1)��is not willing to cooperate with the office in
�	providing information needed by the office to make the
�	determination under Subsection (a);
�	��(2)��has substantially failed to follow through on the
�	commitments made by the person under this chapter before the first
�	anniversary of the date of the qualified media production location
�	designation; or
�	��(3)��fails to submit the report required by Section
�	151.3415, Tax Code.
�	��SECTION�2.��Subchapter H, Chapter 151, Tax Code, is amended
�	by adding Section 151.3415 to read as follows:
�	��Sec.�151.3415.��ITEMS SOLD TO OR USED TO CONSTRUCT,
�	MAINTAIN, EXPAND, IMPROVE, EQUIP, OR RENOVATE MEDIA PRODUCTION
�	FACILITIES AT MEDIA PRODUCTION LOCATIONS; REPORT. (a)��In this
�	section, "qualified person" and "qualified media production
�	location" have the meanings assigned by Section 485A.002,
�	Government Code.
�	��(b)��The sale, lease, or rental of a taxable item to a
�	qualified person is exempted from the taxes imposed by this chapter
�	for a maximum of two years if the item is used:
�	��(1)��for the construction, maintenance, expansion,
�	improvement, or renovation of a media production facility at a
�	qualified media production location;
�	��(2)��to equip a media production facility at a
�	qualified media production location; or
�	��(3)��for the renovation of a building or facility at a
�	qualified media production location that is to be used exclusively
�	as a media production facility.
�	��(c)��A qualified person shall submit an annual report to the
�	comptroller regarding the sale, lease, or rental of taxable items
�	for which a tax exemption is granted to the qualified person under
�	this section. The report must be in the form and manner prescribed
�	by the comptroller.
�	��(d)��The comptroller shall share information from reports
�	submitted under Subsection (c), on request, with the Music, Film,
�	Television, and Multimedia Office within the office of the
�	governor.
�	��SECTION�3.��This Act takes effect September 1, 2009.
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�	______________________________	______________________________
�	��President of the Senate	Speaker of the House��
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�	��I hereby certify that S.B.�No.�1929 passed the Senate on
�	April 29, 2009, by the following vote: Yeas�30, Nays�1; and that
�	the Senate concurred in House amendment on May 21, 2009, by the
�	following vote: Yeas�31, Nays�0.
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�	______________________________
�	Secretary of the Senate��
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�	��I hereby certify that S.B.�No.�1929 passed the House, with
�	amendment, on May 15, 2009, by the following vote: Yeas�132,
�	Nays�12, one present not voting.
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�	______________________________
�	Chief Clerk of the House��
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�	Approved:
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�	______________________________�
�	��Date
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�	______________________________�
�	��Governor