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First Substitute H.B. 17

Senator Ron Allen proposes the following substitute bill:




Sponsor: Sheryl L. Allen

             5      David N. Cox
             6      Brent H. GoodfellowSteven R. Mascaro
Karen W. MorganLaWanna Lou Shurtliff
Peggy Wallace              7     
             8      LONG TITLE
             9      General Description:
             10          This bill creates a restricted account known as the Motion Picture Incentive Fund to
             11      provide incentives to motion picture companies that produce motion pictures, television
             12      series, or made-for-television movies within the state.
             13      Highlighted Provisions:
             14          This bill:
             15          .    creates a restricted account within the General Fund known as the Motion Picture
             16      Incentive Fund, which shall be used to provide incentives for within-the-state
             17      production of television series, made-for-television movies, and motion pictures;
             18          .    provides for administration of the fund by the executive director of the Department
             19      of Community and Economic Development or the director's designee under the
             20      direction of the Board of Business and Economic Development;
             21          .    provides for the executive director to determine the structure, amount, and nature of
             22      the incentive given to a motion picture company, subject to ratification by the
             23      board;
             24          .    provides conditions upon which incentives may be granted; and
             25          .    provides for an annual report to legislative committees on the economic impact of

             26      the incentive awards program.
             27      Monies Appropriated in this Bill:
             28          This bill appropriates:
             29          .    as an ongoing appropriation subject to future budget constraints, $1,000,000 from
             30      the General Fund for fiscal year 2005-06 to the Motion Picture Incentive Fund.
             31      Other Special Clauses:
             32          This bill takes effect on July 1, 2005.
             33      Utah Code Sections Affected:
             34      ENACTS:
             35          9-2-2101, Utah Code Annotated 1953
             36          9-2-2102, Utah Code Annotated 1953
             37          9-2-2103, Utah Code Annotated 1953
             38          9-2-2104, Utah Code Annotated 1953
             39          9-2-2105, Utah Code Annotated 1953
             41      Be it enacted by the Legislature of the state of Utah:
             42          Section 1. Section 9-2-2101 is enacted to read:
Part 21. Motion Picture Incentive Fund

             44          9-2-2101. Purpose.
             45          (1) The Legislature finds that:
             46          (a) the state's natural beauty, scenic wonders, and diverse topography provide a variety
             47      of magnificent settings from which the motion picture industry can choose to film part or all of
             48      major or independent motion pictures, made-for-televison movies, and televison series;
             49          (b) the state has an abundance of resources, including a skilled and able workforce, the
             50      required infrastructure, and a friendly and hospitable populace that have been instrumental in
             51      the filming of several successful motion pictures and televison series; and
             52          (c) further development of the motion picture industry in Utah is a state public purpose
             53      that will significantly impact growth in the state's economy and contribute to the fiscal well
             54      being of the state and its people.
             55          (2) The purpose of this part is to:
             56          (a) encourage the use of Utah as a site for the production of motion pictures, television

             57      series, and made-for-televison movies;
             58          (b) provide a financial incentive to the film industry so that Utah might compete
             59      successfully with other states and countries for filming locations; and
             60          (c) help develop a strong motion picture industry presence in the state that will
             61      contribute substantially to improving the state's economy.
             62          Section 2. Section 9-2-2102 is enacted to read:
             63          9-2-2102. Definitions.
             64          As used in this part:
             65          (1) "Administrator" means the executive director of the Department of Community and
             66      Economic Development or the executive director's designee.
             67          (2) "Board" means the Board of Business and Economic Development.
             68          (3) "Fund" means the restricted account known as the Motion Picture Incentive Fund
             69      created in Section 9-2-2103 .
             70          (4) "Motion picture company" means a company engaged in the production of motion
             71      pictures, television series, or made-for-television movies.
             72          (5) "State-approved production" means a motion picture, televison series, or
             73      made-for-television movie approved by the administrator and ratified by the board that is
             74      produced in the state by a motion picture company.
             75          Section 3. Section 9-2-2103 is enacted to read:
             76          9-2-2103. Motion Picture Incentive Fund created.
             77          (1) There is created within the General Fund a restricted account known as the Motion
             78      Picture Incentive Fund, which shall be used to provide incentives for within-the-state
             79      production of television series, made-for-televison movies, and motion pictures, including
             80      feature films and independent films.
             81          (2) (a) The fund shall be administered by the administrator under the direction of the
             82      board.
             83          (b) The board shall approve fund policies and qualification criteria to receive an
             84      incentive award consistent with the provisions of this part.
             85          (3) All interest generated from investment of money in the fund shall be deposited in
             86      the fund.
             87          (4) The fund shall consist of an annual appropriation by the Legislature.

             88          Section 4. Section 9-2-2104 is enacted to read:
             89          9-2-2104. Financial incentives for motion picture productions.
             90          (1) A motion picture company that has a state-approved production under this section
             91      may receive a financial incentive from the fund as provided in this section.
             92          (2) (a) The administrator has authority to determine the structure, amount, and nature
             93      of the incentive given to a motion picture company, subject to ratification by the board and the
             94      limitations and considerations set out in Subsections (3) and (4).
             95          (b) A financial incentive shall be paid to a motion picture company from the fund only
             96      after:
             97          (i) the administrator has determined that the motion picture company has satisfied the
             98      conditions upon which the incentive is to be given; and
             99          (ii) that determination has been ratified by the board.
             100          (3) (a) In each fiscal year, the money in the fund shall be used for incentives to motion
             101      picture companies for state-approved productions that are either televison series,
             102      made-for-television movies, or motion pictures, which may include both feature films and
             103      independent films.
             104          (b) An incentive awarded under Subsection (3)(a) for a motion picture production may
             105      not exceed $500,000 per production.
             106          (4) (a) The administrator shall enter into agreements with motion picture companies
             107      that represent postperformance incentive grants that take into consideration:
             108          (i) the fact that financing has been obtained and is in place for the production;
             109          (ii) distribution is in place, except that the administrator may make allowances for an
             110      independent filmmaker who plans to shop the production on a film festival circuit;
             111          (iii) the economic impact of the production on the state; and
             112          (iv) the production represents new incremental economic activity in the state as
             113      opposed to existing economic activity.
             114          (b) The administrator may also consider giving preference to a production that
             115      stimulates economic activity in rural areas of the state or that has Utah content, such as
             116      recognizing that the production was made in the state or uses Utah as Utah in the production.
             117          Section 5. Section 9-2-2105 is enacted to read:
             118          9-2-2105. Annual report.

             119          (1) The administrator shall prepare an annual report for the board on the economic
             120      impact of this part.
             121          (2) The board shall present the report to the Legislature's Workforce Services and
             122      Community and Economic Development Interim Committee and the Economic Development
             123      and Human Resources Appropriations Subcommittee, together with any proposed
             124      recommendations for modifications in this part or the annual ongoing appropriation for the
             125      fund.
             126          Section 6. Appropriation.
             127          As an ongoing appropriation subject to future budget constraints, there is appropriated
             128      from the General Fund for fiscal year 2005-06, $1,000,000 to the Motion Picture Incentive
             129      Fund created in Section 9-2-2103 to fund the incentive program authorized under Title 9,
             130      Chapter 2, Part 21, Motion Picture Incentive Fund.
             131          Section 7. Effective date.
             132          This bill takes effect on July 1, 2005.

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