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HCS CSSB 23(FIN): "An Act relating to transferable film production tax credits and film production tax credit certificates; relating to the taxes against which a film production tax credit may be applied; transferring the film office to the Department of Revenue and relating to that office; establishing the Alaska Film Incentive Review Commission; establishing a film production promotion program; relating to the amount of credit that may be awarded for compensation to producers, directors, writers, and actors who are not residents; providing for a fee to be paid at the time an application for eligibility for the film production tax credit is filed; providing a one-time credit for the first episodic scripted television production in the state; requiring the legislative audit division to audit the Alaska film production incentive program; providing for an effective date by repealing the effective dates of secs. 3 and 4, ch. 63, SLA 2008; and providing for an effective date."

00                 HOUSE CS FOR CS FOR SENATE BILL NO. 23(FIN)                                                             
01 "An Act relating to transferable film production tax credits and film production tax                                    
02 credit certificates; relating to the taxes against which a film production tax credit may                               
03 be applied; transferring the film office to the Department of Revenue and relating to                                   
04 that office; establishing the Alaska Film Incentive Review Commission; establishing a                                   
05 film production promotion program; relating to the amount of credit that may be                                         
06 awarded for compensation to producers, directors, writers, and actors who are not                                       
07 residents; providing for a fee to be paid at the time an application for eligibility for the                            
08 film production tax credit is filed; providing a one-time credit for the first episodic                                 
09 scripted television production in the state; requiring the legislative audit division to                                
10 audit the Alaska film production incentive program; providing for an effective date by                                  
11 repealing the effective dates of secs. 3 and 4, ch. 63, SLA 2008; and providing for an                                  
12 effective date."                                                                                                        
13 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA:                                                                
01    * Section 1. AS 24.20.271 is amended to read:                                                                      
02            Sec. 24.20.271. Powers and duties. The legislative audit division shall                                    
03                 (1)  conduct a performance post-audit of boards and commissions                                         
04       designated in AS 44.66.010 and of those programs and activities of agencies subject to                            
05       termination as determined in the manner set out in AS 44.66.020 and 44.66.030, and                                
06       make the audit, together with a written report, available to the legislature not later than                       
07       the first day of the regular session of the legislature convening in each year set out                            
08       with reference to boards, commissions, or agency programs whose activities are                                    
09       subject to termination as prescribed in AS 44.66; the division shall notify the                                   
10       legislature that the audit and report are available;                                                              
11                 (2)  audit at least once every three years the books and accounts of all                                
12       custodians of public funds and all disbursing officers of the state;                                              
13                 (3)  at the direction of the Legislative Budget and Audit Committee,                                    
14       conduct performance post-audits on any agency of state government;                                                
15                 (4)  cooperate with state agencies by offering advice and assistance as                                 
16       requested in establishing or improving the accounting systems used by state agencies;                             
17                 (5)  require the assistance and cooperation of all state officials and                                  
18       other state employees in the inspection, examination, and audit of state agency books                             
19       and accounts;                                                                                                     
20                 (6)  have access at all times to the books, accounts, reports, or other                                 
21       records, whether confidential or not, of every state agency;                                                      
22                 (7)  ascertain, as necessary for audit verification, the amount of agency                               
23       funds on deposit in any bank as shown on the books of the bank; no bank may be held                               
24       liable for making information required under this paragraph available to the legislative                          
25       audit division;                                                                                                   
26                 (8)  complete studies and prepare reports, memoranda, or other                                          
27       materials as directed by the Legislative Budget and Audit Committee;                                              
28                 (9)  have direct access to any information related to the management of                                 
29       the University of Alaska and have the same right of access as exists with respect to                              
30       every other state agency;                                                                                         
31                 (10)  conduct an audit every two years of information found in the                                      
01       annual reports required under AS 42.05.211 and AS 42.06.220 regarding compliance                                  
02       by the Regulatory Commission of Alaska with the requirements of AS 42.05.175(a) -                                 
03       (e) and of the timeline extensions made by the commission under AS 42.05.175(f),                                  
04       and of other performance measures adopted by the commission;                                                  
05                 (11)  conduct audits of the Alaska film production incentive                                        
06       program (AS 44.25.100 - 44.25.190) and make the audits available to the                                       
07       legislature on the first day of the regular session of the legislature in 2015, 2017,                         
08       and 2021.                                                                                                     
09    * Sec. 2. AS 43.75.130(f) is amended to read:                                                                      
10            (f)  For purposes of this section, tax revenue collected under AS 43.75.015                                  
11       from a person entitled to a credit under AS 43.75.035, [OR] 43.75.036, or                                 
12       AS 43.98.030 shall be calculated as if the person's tax were collected without applying                       
13       the credit; tax revenue collected does not include the amount of a tax credit recaptured                          
14       under AS 43.75.035(g) or 43.75.036(g).                                                                            
15    * Sec. 3. AS 43.77.060(e) is amended to read:                                                                      
16            (e)  For purposes of this section, tax revenue collected under AS 43.77.010                                  
17       from a person entitled to a credit under AS 43.77.035, [OR] 43.77.045, or                                 
18       AS 43.98.030 shall be calculated as if the person's tax had been collected without                            
19       applying the credits.                                                                                             
20    * Sec. 4. AS 43.98.030(a) is amended to read:                                                                      
21            (a)  The [IN COOPERATION WITH THE FILM OFFICE IN THE                                                     
22       DEPARTMENT OF COMMERCE, COMMUNITY, AND ECONOMIC                                                                   
23       DEVELOPMENT, THE] department shall provide a transferable film production tax                                     
24       credit certificate to a producer, as defined in AS 44.25.190 [AS 44.33.239], for                          
25       qualified production expenditures under AS 44.25.100 - 44.25.190. The department                              
26       shall publish the name and contact information for each person provided a                                     
27       transferable tax credit certificate under this subsection [AS 44.33.231 -                                     
28       44.33.239].                                                                                                     
29    * Sec. 5. AS 43.98.030(b) is amended to read:                                                                      
30            (b)  A tax credit certificate provided under (a) of this section may be sold,                            
31       assigned, exchanged, conveyed, or otherwise transferred in whole or in part.                                      
01    * Sec. 6. AS 43.98.030(c) is amended to read:                                                                      
02            (c)  A taxpayer acquiring a transferable tax credit certificate may use the                          
03       credit or a portion of the credit to offset taxes imposed under AS 21.09.210,                                 
04       AS 21.66.110, AS 43.20, AS 43.55, AS 43.56, AS 43.65, AS 43.75, and AS 43.77.                                 
05       Except as provided in (e) of this section, any [AS 43.20 (ALASKA NET INCOME                                   
06       TAX ACT). ANY] portion of the credit not used may be used at a later period or                                    
07       transferred under (b) of this section.                                                                            
08    * Sec. 7. AS 43.98.030(e) is amended to read:                                                                      
09            (e)  A transferable film production tax credit certificate provided under (a)                        
10       of this section, whether sold, assigned, exchanged, conveyed, or otherwise transferred,                           
11       in whole or in part, must be used within six [THREE] years after being provided by                            
12       the department.                                                                                                   
13    * Sec. 8. AS 43.98.030(f) is amended to read:                                                                      
14            (f)  The total amount [NUMBER] of tax credits provided in the aggregate                                  
15       under this section may not exceed                                                                                 
16                 (1)  $100,000,000 for productions qualified under AS 44.25.120                                  
17       before July 1, 2013; and                                                                                      
18                 (2)  $200,000,000 for productions qualified under AS 44.25.120                                      
19       after June 30, 2013, and before July 1, 2023.                                                                 
20    * Sec. 9. AS 43.98.030 is amended by adding new subsections to read:                                               
21            (g)  A person acquiring two or more film production tax credit certificates                                  
22       provided under (a) of this section may combine the unused amounts of the credits for                              
23       sale, assignment, exchange, conveyance, or other transfer. At the request of a person                             
24       holding a film production tax credit, the department shall replace a certificate that                             
25       represents the full amount of tax credit available with multiple certificates that each                           
26       represent a portion of the total tax credit available for the purpose of sale, assignment,                        
27       exchange, conveyance, or other transfer under this subsection, or, on request, shall                              
28       provide one tax credit certificate that represents the combined value of multiple tax                             
29       credit certificates. A tax credit certificate provided by the department under this                               
30       subsection must state the expiration date and the amount of each credit that is included                          
31       in the certificate. Combining or splitting unused amounts of credits under this                                   
01       subsection does not change or extend the time period in which each credit that is                                 
02       included in the combination or split must be used.                                                                
03            (h)  Subject to appropriation, the department may purchase a transferable film                               
04       production tax credit certificate for 75 percent of the amount of each credit that is                             
05       included in the certificate.                                                                                      
06    * Sec. 10. AS 44.25 is amended by adding new sections to read:                                                     
07                          Article 3. Film Office.                                                                      
08            Sec. 44.25.100. Film office. The film office is created in the Department of                               
09       Revenue. The film office shall administer the Alaska film production incentive                                    
10       program.                                                                                                          
11            Sec. 44.25.105. Duties. (a) The film office shall make available to the                                    
12       legislature, within 30 days after the start of each regular session, a report of the                              
13       activities conducted by the film office under AS 44.25.100 - 44.25.190. The report                                
14       must include                                                                                                      
15                 (1)  the number of applications received under AS 44.25.120;                                            
16                 (2)  the number of applications approved by the film office;                                            
17                 (3)  the number of, and amount of, tax credits disbursed under                                          
18       AS 44.25.110;                                                                                                     
19                 (4)  the total amount of expenditures that were paid by productions                                     
20       qualifying for the film production tax credit that were not qualified expenditures;                               
21                 (5)  the total amount of qualified expenditures that were paid by                                       
22       productions qualifying for the film production tax credit to Alaska businesses;                                   
23                 (6)  the total amount of qualified expenditures that were paid by                                       
24       productions qualifying for the film production tax credit to Alaska residents as wages;                           
25                 (7)  the total amount of qualified expenditures that were paid by                                       
26       productions qualifying for the film production tax credit for wages paid to individuals                           
27       who were not residents;                                                                                           
28                 (8)  the total number of residents employed by productions qualifying                                   
29       for the film production tax credit;                                                                               
30                 (9)  the total number of individuals employed by productions qualifying                                 
31       for the film production tax credit who were not residents;                                                        
01                 (10)  the number of productions qualifying for the film production tax                                  
02       credit that used a third party to sell, assign, exchange, convey, or otherwise transfer, in                       
03       whole or in part, a tax credit certificate received by the production; in this paragraph,                         
04       "third party" means a person other than the producer or an employee of the producer                               
05       of the production qualifying for the film production tax credit; and                                              
06                 (11)  the number of purchases of transferable film production tax credit                                
07       certificates purchased under AS 43.98.030(h) and the total amount of film production                              
08       tax credits shown on the certificates purchased by the Department of Revenue.                                     
09            (b)  The film office shall design a logo that represents the film office and must                            
10       be included in a film qualifying for a film production tax credit under AS 44.25.100 -                            
11       44.25.190.                                                                                                        
12            (c)  The film office shall provide an on-site liaison to a film production that is                           
13       subject to the maximum application fee under AS 44.25.120(d). The liaison shall assist                            
14       the producer in meeting the requirements of AS 44.25.100 - 44.25.190 and ensure that                              
15       the production is in the best interests of the state as described in the application filed                        
16       under AS 44.25.120 and approved under AS 44.25.150.                                                               
17            Sec. 44.25.110. Alaska film production incentive program. Subject to                                       
18       appropriations for the purpose, the film office shall administer the Alaska film                                  
19       production incentive program to provide a tax credit under AS 43.98.030 for certain                               
20       film production expenditures incurred in the state.                                                               
21            Sec. 44.25.115. Eligibility. (a) A film production is eligible for a tax credit                            
22       under AS 43.98.030, if the                                                                                        
23                 (1)  producer has $75,000 or more in qualified expenditures in a                                        
24       consecutive 36-month period under AS 44.25.130;                                                                   
25                 (2)  Alaska Film Incentive Review Commission determines that the                                        
26       production is not contrary to the best interests of the state; and                                                
27                 (3)  production is approved by the film office.                                                         
28            (b)  In determining under (a) of this section whether a production is not                                    
29       contrary to the best interests of the state, the Alaska Film Incentive Review                                     
30       Commission shall consider the effect of the production on                                                         
31                 (1)  both the immediate and long-term prospects for the film industry in                                
01       the state;                                                                                                        
02                 (2)  both the immediate and long-term prospects for the employment of                                   
03       Alaska residents;                                                                                                 
04                 (3)  both the immediate and long-term prospects for the economy of the                                  
05       state;                                                                                                            
06                 (4)  the public perception of state policy on the utilization and                                       
07       development of the natural resources of the state; and                                                            
08                 (5)  the immediate and long-term prospects for the fiscal health of the                                 
09       state.                                                                                                            
10            Sec. 44.25.120. Qualification for film production tax credit. (a) A film                                   
11       producer may apply for the film production tax credit under AS 43.98.030 by                                       
12       submitting an application to the film office on a form provided by the film office. The                           
13       application must include                                                                                          
14                 (1)  a script or synopsis of the production;                                                            
15                 (2)  the names of the producer, director, and proposed cast;                                            
16                 (3)  estimated start, completion, and filming dates; and                                                
17                 (4)  other information the film office may require to determine the                                     
18       producer's qualification for a credit and the estimated amount of the credit.                                     
19            (b)  If the Alaska Film Incentive Review Commission approves an application                                  
20       submitted under (a) of this section, the film office shall issue a notice of qualification                        
21       to the producer. The notice of qualification must include a determination by the film                             
22       office of the estimated film production tax credit for which the production qualifies.                            
23            (c)  Information submitted in an application under (a) of this section is                                    
24       confidential and is not subject to inspection or copying under AS 40.25.110 -                                     
25       40.25.125.                                                                                                        
26            (d)  At the time an application is submitted under (a) of this section, a film                               
27       producer shall submit an application fee equal to 0.2 percent of the estimated total                              
28       qualified expenditures to be incurred in the state, except that the application fee may                           
29       not be less than $200 or more than $5,000. The application fee is not subject to refund.                          
30            Sec. 44.25.125. Award of film production tax credit. (a) Subject to                                        
31       AS 43.98.030(f) and to (i) of this section, the film office shall determine the amount of                         
01       the tax credit under AS 43.98.030 available to a producer who has obtained a notice of                            
02       qualification under AS 44.25.120(b), based on the qualified expenditures of the                                   
03       production under AS 44.25.130. After the film office determines the amount of the tax                             
04       credit, the tax credit shall be submitted to the Alaska Film Incentive Review                                     
05       Commission for approval.                                                                                          
06            (b)  Except as provided in (k) of this section, the base amount of a tax credit                              
07       awarded under this section is equal to 30 percent of the qualified expenditures of a                              
08       production.                                                                                                       
09            (c)  In determining the amount of the tax credit and subject to approval by the                              
10       Alaska Film Incentive Review Commission, the applicable percentage provided by (b)                                
11       of this section shall be increased by the film office based on the following criteria:                            
12                 (1)  an additional 20 percent of qualified expenditures that are wages                                  
13       paid to Alaska residents;                                                                                         
14                 (2)  an additional six percent of qualified expenditures made in a rural                                
15       area; and                                                                                                         
16                 (3)  an additional two percent of qualified expenditures made in the                                    
17       state between October 1 and March 30.                                                                             
18            (d)  After completion of the production, the producer shall provide the film                                 
19       office with a production cost report detailing the qualified expenditures of the                                  
20       production, with verification by an independent certified public accountant, licensed in                          
21       the state and approved by the film office, that the costs claimed in the report are                               
22       qualified expenditures under AS 44.25.130 and that there is no outstanding balance for                            
23       a qualified expenditure that is due to a person in the state. The independent certified                           
24       public accountant providing verification under this subsection may not engage in the                              
25       sale, assignment, exchange, conveyance, or other transfer of a tax credit certificate that                        
26       includes a credit based on the qualified expenditures that are verified by that                                   
27       independent certified public accountant. If the independent certified public accountant                           
28       providing verification under this subsection subsequently engages in the sale,                                    
29       assignment, exchange, conveyance, or other transfer of a credit for which a qualified                             
30       expenditure was verified by that independent certified public accountant, the film                                
31       office may require the producer providing the production cost report to have the                                  
01       qualified expenditures verified by an independent certified public accountant licensed                            
02       in the state that is not engaged in the sale, assignment, exchange, conveyance, or other                          
03       transfer related to a credit for the qualified expenditures.                                                      
04            (e)  Subject to (g) of this section, the film office, in cooperation with the                                
05       Department of Revenue, shall determine the amount of the tax credit based on the                                  
06       information provided by the producer under (d) of this section and, after approval by                             
07       the Alaska Film Incentive Review Commission, shall award a tax credit in cooperation                              
08       with the Department of Revenue under AS 43.98.030 if the producer has satisfied all                               
09       requirements under AS 44.25.100 - 44.25.190.                                                                      
10            (f)  The award of a tax credit under this section is conditioned on the                                      
11       producer's and the production's full compliance with all applicable state laws and                                
12       regulations. At the request of the film office, a producer shall provide any information                          
13       necessary for the film office to determine the producer's and production's compliance                             
14       with this subsection.                                                                                             
15            (g)  In determining the amount of a tax credit awarded under this section, the                               
16       film office shall reduce the amount of the tax credit by any amount the film office                               
17       considers necessary to allow the state, or a political subdivision of the state, to recover                       
18       the cost of any damages caused by any act or omission of the producer or production.                              
19            (h)  The film office may withhold the award of a tax credit under this section if                            
20       the office determines that there are filed, but unresolved, legal actions in the state                            
21       involving the producer or production.                                                                             
22            (i)  To qualify for the tax credit under AS 43.98.030, a producer shall include,                             
23                 (1)  in the end credits of each qualified film, the film office logo                                    
24       designed under AS 44.25.105(b) and the words, "Filmed in Alaska with the Support of                               
25       the State of Alaska"; or                                                                                          
26                 (2)  on each DVD or other media produced for distribution, a short                                      
27       Alaska promotional video or advertisement approved by the Alaska Film Incentive                                   
28       Review Commission.                                                                                                
29            (j)  The Department of Revenue may not provide a tax credit certificate under                                
30       AS 43.98.030 to a producer that fails to meet the requirements in (i) of this section.                            
31            (k)  In place of the 30 percent credit applicable to qualified expenditures under                            
01       (a) of this section, the tax credit for expenditures for services performed in the state,                         
02       including all salaries, wages, compensation, and related benefits, by producers,                                  
03       directors, writers, and principal actors that fail to meet the eligibility requirements for                       
04       a permanent fund dividend in AS 43.23.005(a)(2) - (7), and all entities representing                              
05       producers, directors, writers, and principal actors that fail to meet the eligibility                             
06       requirements for a permanent fund dividend in AS 43.23.005(a)(2) - (7), is five                                   
07       percent. The amount of the five percent credit may be increased by adding an amount                               
08       equal to 50 percent of the qualified expenditures paid to residents of the state under                            
09       AS 44.25.130(a)(10) and 50 percent of the qualified expenditures paid under                                       
10       AS 44.25.130(a)(11) - (13) and (15). In this subsection, "principal actors" means the                             
11       five highest compensated actors or entities representing the five highest compensated                             
12       actors in the production.                                                                                         
13            Sec. 44.25.130. Determination of qualified expenditures. (a) Expenditures                                  
14       made by a production company licensed to do business in the state in connection with                              
15       a film production approved by the film office that shall be considered qualified                                  
16       expenditures must be directly related to the production and be incurred in the state.                             
17       Only expenditures that are ordinary, reasonable, and not in excess of fair market value                           
18       and that are for real or tangible property, fees, services, or state or municipal taxes                           
19       shall be considered. Expenditures may include                                                                     
20                 (1)  costs of set construction and operation;                                                           
21                 (2)  costs of wardrobes, make-up, accessories, and related services;                                    
22                 (3)  costs associated with photography and sound synchronization;                                       
23                 (4)  costs of lighting and related services and materials;                                              
24                 (5)  costs of editing and related services;                                                             
25                 (6)  rental of facilities and equipment;                                                                
26                 (7)  leasing of vehicles;                                                                               
27                 (8)  costs of food and lodging;                                                                         
28                 (9)  costs of digital or tape editing, film processing, transfer of film to                             
29       tape or digital format, transfer of digital media to film or tape, sound mixing, and                              
30       special and visual effects;                                                                                       
31                 (10)  the total aggregate expenditures for services performed in the                                    
01       state, including all salaries, wages, compensation, and related benefits provided to                              
02       producers, directors, writers, actors, and other personnel that are directly attributable                         
03       to services performed in the state;                                                                               
04                 (11)  the costs of the use of an Alaska business for processing qualified                               
05       payroll and related expenditures;                                                                                 
06                 (12)  costs of music, if performed, composed, or recorded by an Alaska                                  
07       musician, or released or published by an Alaska business;                                                         
08                 (13)  costs of intrastate travel, if provided by an Alaska business;                                    
09                 (14)  costs relating to the design, construction, improvement, or repair                                
10       of a film, video, television, or digital production or postproduction facility or related                         
11       property, infrastructure, or equipment, except commercial exhibition facilities, as                               
12       determined by the film office;                                                                                    
13                 (15)  costs of state or municipal taxes levied in Alaska on the lease or                                
14       rental of passenger or recreational vehicles or the rental of rooms or other lodging; or                          
15                 (16)  other similar production expenditures as determined by the film                                   
16       office in cooperation with the Department of Revenue.                                                             
17            (b)  Production costs that may not be considered qualified expenditures include                              
18                 (1)  costs related to the acquisition, determination, transfer, or use of a                             
19       film production tax credit under AS 43.98.030;                                                                    
20                 (2)  postproduction expenditures for marketing and distribution;                                        
21                 (3)  production financing, depreciation, and amortization costs, and                                    
22       other costs that are not cash or cash equivalent expenditures directly attributable to                            
23       production costs incurred in the state;                                                                           
24                 (4)  amounts that are later reimbursed or reasonably anticipated to be                                  
25       reimbursed, resulting in a reduction in production costs;                                                         
26                 (5)  amounts that are reasonably anticipated to be recovered through                                    
27       subsequent sale or other realization of value by disposal of an asset that has been                               
28       claimed as a qualified expenditure;                                                                               
29                 (6)  amounts that are paid to a person or entity as a result of                                         
30       participation in profits from the exploitation of the production;                                                 
31                 (7)  costs incurred in the purchase of real or tangible property for which                              
01       a qualified expenditure has, at any time, been claimed.                                                           
02            Sec. 44.25.135. Recovery of film production tax credit. (a) The film office                                
03       may review, audit, and bring legal proceedings to recover any amount of a tax credit                              
04       awarded under AS 44.25.125 from a producer or production to which a credit was                                    
05       awarded if the film office determines that the film producer or production is liable for                          
06       damages to the state, or any political subdivision of the state.                                                  
07            (b)  Legal proceedings may not be brought under (a) of this section more than                                
08       six years after the date the tax credit was awarded under AS 44.25.125.                                           
09            Sec. 44.25.140. Regulations. The film office may adopt procedures and                                      
10       regulations to carry out its functions under AS 44.25.100 - 44.25.190.                                            
11            Sec. 44.25.145. Alaska Film Incentive Review Commission. (a) The Alaska                                    
12       Film Incentive Review Commission is created in the Department of Revenue.                                         
13            (b)  The membership of the commission consists of the                                                        
14                 (1)  commissioner of commerce, community, and economic                                                  
15       development;                                                                                                      
16                 (2)  commissioner of natural resources;                                                                 
17                 (3)  commissioner of revenue;                                                                           
18                 (4)  commissioner of labor and workforce development.                                                   
19            (c)  A majority of the commission constitutes a quorum. Approval of an                                       
20       application for qualification under AS 44.25.120 and 44.25.150 and the award of film                              
21       production tax credits under AS 44.25.120 and 44.25.150 require an affirmative vote                               
22       by three members of the commission.                                                                               
23            (d)  The commission shall employ an executive director and additional staff to                               
24       support the work of the commission, oversee the film office, and carry out the duties                             
25       of the film office under AS 44.25.100 - 44.25.190. The commission shall provide                                   
26       general direction to the executive director and staff for the operation of the film office.                       
27            (e)  The commission may consult with individuals knowledgeable about film                                    
28       production and accounting as necessary to perform the duties of the commission.                                   
29            Sec. 44.25.150. Review of qualifications and award of film production tax                                  
30       credits. (a) The executive director shall review each application submitted to the film                         
31       office under AS 44.25.120 and each production cost report submitted to the film office                            
01       under AS 44.25.125.                                                                                               
02            (b)  After finding that an application submitted under AS 44.25.120 is                                       
03       complete, the executive director shall review the application and submit the                                      
04       application for approval to the commission along with a recommendation to approve                                 
05       or reject the application. After reviewing the application, the recommendation of the                             
06       executive director, and additional information an applicant may provide or the                                    
07       commission may request, the commission shall make a decision as to whether the                                    
08       production proposed in the application and the estimated amount of the film                                       
09       production tax credit is in the best interest of the state. The commission may not                                
10       approve an application for a film production that the commission finds is contrary to                             
11       the natural resource development policy of the state. The commission shall issue a                                
12       decision either approving or rejecting the application and qualification of the                                   
13       applicant. A decision of the commission on the qualification of an applicant is in the                            
14       discretion of the commission and is not subject to appeal except on the issue of                                  
15       whether the decision of the commission is arbitrary or capricious. If appealed, the                               
16       appeal is subject to AS 44.62 (Administrative Procedure Act).                                                     
17            (c)  After reviewing the production cost report submitted by a producer under                                
18       AS 44.25.125, the executive director shall review and verify the information included                             
19       on the production cost report. The executive director shall determine the amount of the                           
20       credit for which the producer may qualify and make a recommendation to the                                        
21       commission as to the amount of the credit to be awarded. The commission may                                       
22       approve the credit amount recommended by the executive director, adjust the amount                                
23       of the credit, deny all or part of the credit, or return the production cost report to the                        
24       executive director for additional review. The denial of a film production tax credit                              
25       under this section is subject to appeal under AS 44.62 (Administrative Procedure Act).                            
26            Sec. 44.25.190. Definitions. In AS 44.25.100 - 44.25.190,                                                  
27                 (1)  "Alaska business" means                                                                            
28                      (A)  a person who holds a current Alaska business license;                                         
29                      (B)  a person who provides goods or services under the name as                                     
30            appearing on the person's current Alaska business license;                                                   
31                      (C)  a person who has maintained a place of business within the                                    
01            state staffed by the person or an employee of the person for a period of six                                 
02            months immediately preceding the date the goods or services were provided;                                   
03                      (D)  a person who is                                                                               
04                           (i)  incorporated or qualified to do business under the                                       
05                 laws of the state;                                                                                      
06                           (ii)  a sole proprietorship, and the proprietor is a resident                                 
07                 of the state;                                                                                           
08                           (iii)  a limited liability company organized under                                            
09                 AS 10.50, and all members are residents of the state; or                                                
10                           (iv)  a partnership under former AS 32.05, AS 32.06, or                                       
11                 AS 32.11, and all partners are residents of the state; and                                              
12                      (E)  if the business is a joint venture, a joint venture composed                                  
13            entirely of ventures that qualify under (A) - (D) of this paragraph;                                         
14                 (2)  "film" includes television, commercials, and videos;                                               
15                 (3)  "film office" means the film office created under AS 44.25.100;                                    
16                 (4)  "producer" means a person who arranges financing for or                                            
17       supervises the production of a film, video, commercial, or television production or                               
18       pilot;                                                                                                            
19                 (5)  "rural area" means a community in the state with a population of                                   
20       1,500 or less or a community with a population of 10,000 or less that is not connected                            
21       by road or rail to Anchorage or Fairbanks.                                                                        
22    * Sec. 11. AS 44.33.231 is repealed and reenacted to read:                                                         
23            Sec. 44.33.231. Film production promotion program. (a) The film                                            
24       production promotion program is established in the Department of Commerce,                                        
25       Community, and Economic Development.                                                                              
26            (b)  The purpose of the film production promotion program is to                                              
27                 (1)  work with organizations in the private sector for the expansion and                                
28       development of film production industries in the state;                                                           
29                 (2)  promote Alaska as an appropriate location for film production;                                     
30                 (3)  provide production assistance through connecting film directors,                                   
31       makers, and producers with Alaska location scouts and contractors, including                                      
01       contractors providing assistance with permit applications; and                                                    
02                 (4)  certify Alaska film production internship training programs and                                    
03       promote the employment of program interns by eligible productions.                                                
04            (c)  On request, the Department of Commerce, Community, and Economic                                         
05       Development, through the film production promotion program, shall assist the                                      
06       Department of Revenue in the administration of the Alaska film production incentive                               
07       program (AS 44.25.110).                                                                                           
08    * Sec. 12. AS 44.33.232, 44.33.233, 44.33.234, 44.33.235, 44.33.236, 44.33.237, 44.33.238,                         
09 and 44.33.239 are repealed.                                                                                             
10    * Sec. 13. AS 43.98.030; AS 44.25.100, 44.25.105, 44.25.110, 44.25.115, 44.25.120,                                 
11 44.25.125, 44.25.130, 44.25.140, 44.25.145, 44.25.150, 44.25.190; and AS 44.33.231(c) are                               
12 repealed.                                                                                                               
13    * Sec. 14. AS 44.25.135 is repealed.                                                                               
14    * Sec. 15. AS 24.20.271(11) is repealed.                                                                           
15    * Sec. 16. Sections 3, 4, 5, and 6, ch. 63, SLA 2008, are repealed.                                                
16    * Sec. 17. The uncodified law of the State of Alaska is amended by adding a new section to                         
17 read:                                                                                                                   
18       INCENTIVE CREDIT FOR FIRST EPISODIC SCRIPTED TELEVISION                                                           
19 PRODUCTION IN THE STATE. (a) Subject to appropriation, the first episodic scripted                                      
20 television production produced after the effective date of this section is entitled to an                               
21 additional film production tax credit of six percent of the total qualified expenditures incurred                       
22 in the state. The production is eligible for the film production tax credit in this section after 16                    
23 episodes have been completed and are ready for television broadcast.                                                    
24       (b)  The credit in this section shall be administered in the same manner as the film                              
25 production tax credit under AS 44.25.100 - 44.25.190.                                                                   
26       (c)  In this section, "episodic scripted television production" means a production for                            
27 television broadcast that is based on a script written before production; "episodic scripted                            
28 television production" does not include what is commonly referred to as reality television, for                         
29 which actors in the production do not perform using previously scripted dialogue or actions.                            
30    * Sec. 18. The uncodified law of the State of Alaska is amended by adding a new section to                         
31 read:                                                                                                                   
01       TRANSITION. (a) The employee or employees in the film office in the Department of                                 
02 Commerce, Community, and Economic Development shall be transferred to the Department                                    
03 of Revenue on the effective date of this section and shall be the staff authorized for the Alaska                       
04 Film Incentive Review Commission established by AS 44.25.145, enacted by sec. 10 of this                                
05 Act. The Alaska Film Incentive Review Commission shall designate an executive director as                               
06 soon as practicable after the effective date of this section.                                                           
07       (b)  Subject to AS 43.98.030(f), as amended by sec. 8 of this Act, secs. 13 and 14 of                             
08 this Act do not prohibit the film office from determining a film production's qualified                                 
09 expenditures, awarding a tax credit, or reviewing a tax credit under the provisions repealed by                         
10 secs. 13 and 14 of this Act that has received a notice of qualification under AS 44.25.120(b),                          
11 enacted by sec. 10 of this Act, before July 1, 2023.                                                                    
12       (c)  A film production tax credit may be used to offset taxes imposed under the                                   
13 provisions identified in AS 43.98.030(c), as amended by sec. 6 of this Act, or sold or                                  
14 exchanged for a transferable tax credit certificate under AS 43.98.030(a), as amended by sec.                           
15 4 of this Act, within three years after being provided by the Department of Revenue,                                    
16 notwithstanding the repeal of AS 43.98.030 in sec. 13 of this Act.                                                      
17       (d)  A film production tax credit that is being withheld under AS 44.25.125(h), enacted                           
18 by sec. 10 of this Act, may continue to be withheld by the film office, notwithstanding the                             
19 repeal of AS 44.25.125 in sec. 13 of this Act.                                                                          
20    * Sec. 19. The uncodified law of the State of Alaska is amended by adding a new section to                         
21 read:                                                                                                                   
22       NOTIFICATION. When the amount of tax credits provided under AS 43.98.030(f), as                                   
23 amended by sec. 8 of this Act, in the aggregate and the estimated amount of tax credits that                            
24 could be claimed based on notices of qualification issued by the film office under                                      
25 AS 44.25.120(b), enacted by sec. 10 of this Act, together equal $100,000,000 before July 1,                             
26 2013, or $200,000,000 after June 30, 2013, and before July 1, 2023, the commissioner of                                 
27 revenue shall notify the presiding officers of each house of the legislature and the revisor of                         
28 statutes in writing.                                                                                                    
29    * Sec. 20. The uncodified law of the State of Alaska is amended by adding a new section to                         
30 read:                                                                                                                   
31       NONSEVERABILITY. Notwithstanding AS 01.10.030, the provisions of this Act are                                     
01 not severable.                                                                                                          
02    * Sec. 21. Sections 7 and 8, ch. 63, SLA 2008, are repealed.                                                       
03    * Sec. 22. Section 13 of this Act takes effect on the earlier of the following:                                    
04            (1)  July 1, 2023; or                                                                                        
05            (2)  the date the commissioner of revenue notifies the presiding officers of each                            
06 house of the legislature and the revisor of statutes in writing of the $200,000,000 amount after                        
07 June 30, 2013, and before July 1, 2023, under sec. 19 of this Act.                                                      
08    * Sec. 23. Section 14 of this Act takes effect on the earlier of the following:                                    
09            (1)  July 1, 2029; or                                                                                        
10            (2)  six years after the date the commissioner of revenue notifies the presiding                             
11 officers of each house of the legislature and the revisor of statutes in writing of the                                 
12 $200,000,000 amount after June 30, 2013, and before July 1, 2023, under sec. 19 of this Act.                            
13    * Sec. 24. Section 15 of this Act takes effect January 1, 2022.                                                    
14    * Sec. 25. Except as provided in secs. 22 - 24 of this Act, this Act takes effect July 1, 2013.