Bill Text: MS SB2691 | 2014 | Regular Session | Introduced
Bill Title: Motion picture production companies; create loan guaranty program as incentive for productions in state.
Spectrum: Partisan Bill (Republican 1-0)
Status: (Failed) 2014-02-04 - Died In Committee [SB2691 Detail]
Download: Mississippi-2014-SB2691-Introduced.html
MISSISSIPPI LEGISLATURE
2014 Regular Session
To: Tourism; Finance
By: Senator(s) Fillingane
Senate Bill 2691
AN ACT TO PROVIDE THAT THE MISSISSIPPI DEVELOPMENT AUTHORITY SHALL ESTABLISH A LOAN GUARANTY PROGRAM ON BEHALF OF CERTAIN MOTION PICTURE PRODUCTION COMPANIES; TO PROVIDE ELIGIBILITY CRITERIA THAT A MOTION PICTURE PRODUCTION COMPANY MUST SATISFY IN ORDER TO BE ELIGIBLE TO PARTICIPATE IN THE PROGRAM; TO PROVIDE FOR THE TERMS OF LOAN GUARANTEES MADE UNDER THE PROGRAM; TO PROVIDE THAT A MOTION PICTURE PRODUCTION COMPANY THAT CHOOSES TO UTILIZE THE LOAN GUARANTY PROGRAM FOR A MOTION PICTURE SHALL NOT BE ELIGIBLE TO PARTICIPATE IN THE REBATE INCENTIVE AUTHORIZED UNDER THE MISSISSIPPI MOTION PICTURE INCENTIVE ACT FOR THE SAME MOTION PICTURE; TO PROVIDE THAT FUNDS FOR THE LOAN GUARANTY PROGRAM WILL MADE AVAILABLE FROM CURRENT INCOME TAX COLLECTIONS AND FUNDS IN THE MISSISSIPPI MOTION PICTURE PRODUCTION GUARANTY FUND; TO AUTHORIZE THE ISSUANCE OF STATE GENERAL OBLIGATION BONDS TO PROVIDE FUNDS FOR THE MISSISSIPPI MOTION PICTURE PRODUCTION GUARANTY FUND CREATED IN THIS ACT; TO AMEND SECTION 57-89-7, MISSISSIPPI CODE OF 1972, IN CONFORMITY THERETO; AND FOR RELATED PURPOSES.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:
SECTION 1. As used in this section, the following terms shall have the meanings ascribed in this section unless the context clearly indicates otherwise:
(a) "Certified production company" means a motion picture production company that has been approved by the MDA for participation in the program created under this section.
(b) "MDA" means the Mississippi Development Authority.
(c) "Motion picture" means a nationally distributed feature length film made in Mississippi, in whole or in part, intended for theatrical release or television viewing. The term "motion picture" shall not include the production of television coverage of news and athletic events, or a film, video, DVD, television program, series, or commercial that contains any material or performance defined in Section 97-29-103.
(e) "Motion picture production company" means a company permanently located in Mississippi, engaged in the business of producing nationally distributed motion pictures.
(f) "Production costs" means motion picture production expenditures by a certified motion picture production company including, but not limited to, purchases of goods and services, payroll, costs of services directly related to a motion picture, costs of the rental or purchase of equipment, travel and production fees; however, production fees cannot exceed ten percent (10%) of the total budget for the motion picture. For certain purchases such as real property and automobiles used by the certified production company, the MDA will establish and use special rules for determining the value of such an asset during the production period in Mississippi.
(g) "Profit calculation period" means the period beginning eighteen (18) months after the delivery of a motion picture to a distributor or twelve (12) months after the release date for the motion picture, whichever is later.
(h) "State" means the State of Mississippi.
SECTION 2. (1) The MDA shall establish a program of loan guarantees to be made on behalf of certified motion picture production companies. A motion picture production company desiring to participate in the guaranty program must submit an application to the MDA. In order to be eligible to participate in the loan guaranty program a motion picture must provide verification to or enter into binding commitments with the MDA, as the case may be, providing that:
(a) The budget for the motion picture for which a guaranty is sought is not less than Five Million Dollars ($5,000,000.00) and at least fifty percent (50%) of the budget will be expended for production costs in the state.
(b) The motion picture production company has secured and in place distribution contracts for the motion picture which are valued at no less than ten percent (10%) of the total budget for the motion picture.
(c) The motion picture production company will produce at least three (3) motion pictures in the state each year during the three-year certification period.
(d) The motion picture production company will expend at least One Hundred Million Dollars ($100,000,000.00), in the aggregate, for production costs in the state during the three-year certification period.
(e) Ten percent (10%) of the profits received by the motion picture production company from a certified motion picture will be paid to the state for deposit into the Mississippi Motion Picture Production Guaranty Fund created in subsection (7) of this section.
(2) (a) The Executive Director of the MDA shall review the application and determine whether the applicant qualifies under this section and under the rules and regulations promulgated pursuant to this section. If the executive director determines that the motion picture production company qualifies under this section and under the rules and regulations promulgated pursuant to this section, he shall issue a certificate to the motion picture production company certifying it as a certified production company and authorizing it to participate in the program provided for in this section. The initial certification shall be for three (3) years and upon expiration of such time, the production company may submit a new application for approval to participate in the program. A certified production company will receive an annual aggregate commitment of Twenty Million Dollars ($20,000,000.00) in guarantees for each year of the initial three-year certification period.
(b) The MDA may disapprove an application submitted by a motion picture production company for which the state has been required to undertake performance of its guaranty on behalf of the company on three (3) or more occasions during the three-year certification period.
(4) The terms of any guaranty made under this section shall provide for the following:
(a) That if a motion picture produces total income during the profit calculation period which is less than the total budget for the motion picture, then the state shall guarantee seventy-five percent (75%) of eighty-five percent (85%) of the difference between the total budget and income.
(b) The total amount guaranteed for a motion picture shall not exceed Eight Million Dollars ($8,000,000.00).
(5) A motion picture production company that chooses to utilize the guaranty program for a motion picture under this section shall not be eligible to participate in the rebate incentive authorized under Section 57-89-1 et seq. for the same motion picture.
(6) Funds for the guaranty program authorized in this section shall be made available from current income tax collections, not to exceed Ten Million Dollars ($10,000,000.00) in any fiscal year, and from funds in the Mississippi Motion Picture Production Guaranty Fund created in subsection (7) of this section.
(7) There is created in the State Treasury a special fund to be designated as the "Mississippi Motion Picture Production Guaranty Fund," which shall consist of funds appropriated or otherwise made available by the Legislature in any manner and funds from any other source designated for deposit into such fund. Unexpended amounts remaining in the fund at the end of a fiscal year shall not lapse into the State General Fund, and any investment earnings or interest earned on amounts in the fund shall be deposited to the credit of the fund. Monies in the fund shall be used for the purposes of providing funds for the loan guaranty program provided for in this section.
(8) The MDA shall have all powers necessary to implement and administer the program established under this section, and the MDA shall promulgate rules and regulations, in accordance with the Mississippi Administrative Procedures Law, necessary for the implementation of this section.
SECTION 3. (1) As used in this section, the following words shall have the meanings ascribed herein unless the context clearly requires otherwise:
(a) "Accreted value" of any bonds means, as of any date of computation, an amount equal to the sum of (i) the stated initial value of such bond, plus (ii) the interest accrued thereon from the issue date to the date of computation at the rate, compounded semiannually, that is necessary to produce the approximate yield to maturity shown for bonds of the same maturity.
(b) "State" means the State of Mississippi.
(c) "Commission" means the State Bond Commission.
(2) (a) The Mississippi Development Authority, at one time, or from time to time, may declare by resolution the necessity for issuance of general obligation bonds of the State of Mississippi to provide funds for the loan guaranty program authorized in Section 2 of this act. Upon the adoption of a resolution by the Mississippi Development Authority, declaring the necessity for the issuance of any part or all of the general obligation bonds authorized by this subsection, the Mississippi Development Authority shall deliver a certified copy of its resolution or resolutions to the commission. Upon receipt of such resolution, the commission, in its discretion, may act as the issuing agent, prescribe the form of the bonds, determine the appropriate method for sale of the bonds, advertise for and accept bids or negotiate the sale of the bonds, issue and sell the bonds so authorized to be sold, and do any and all other things necessary and advisable in connection with the issuance and sale of such bonds. The total amount of bonds issued under this section shall not exceed Thirty Million Dollars ($30,000,000.00); however, not more than Ten Million Dollars ($10,000,000.00) of bonds may be issued during any fiscal year. No bonds authorized under this section shall be issued after July 1, 2018.
(b) The proceeds of bonds issued pursuant to this section shall be deposited into the Mississippi Motion Picture Production Guaranty Fund created pursuant to Section 2 of this act. Any investment earnings on bonds issued pursuant to this section shall be used to pay debt service on bonds issued under this section, in accordance with the proceedings authorizing issuance of such bonds.
(3) The principal of and interest on the bonds authorized under this section shall be payable in the manner provided in this subsection. Such bonds shall bear such date or dates, be in such denomination or denominations, bear interest at such rate or rates (not to exceed the limits set forth in Section 75-17-101, Mississippi Code of 1972), be payable at such place or places within or without the State of Mississippi, shall mature absolutely at such time or times not to exceed twenty-five (25) years from date of issue, be redeemable before maturity at such time or times and upon such terms, with or without premium, shall bear such registration privileges, and shall be substantially in such form, all as shall be determined by resolution of the commission.
(4) The bonds authorized by this section shall be signed by the chairman of the commission, or by his facsimile signature, and the official seal of the commission shall be affixed thereto, attested by the secretary of the commission. The interest coupons, if any, to be attached to such bonds may be executed by the facsimile signatures of such officers. Whenever any such bonds shall have been signed by the officials designated to sign the bonds who were in office at the time of such signing but who may have ceased to be such officers before the sale and delivery of such bonds, or who may not have been in office on the date such bonds may bear, the signatures of such officers upon such bonds and coupons shall nevertheless be valid and sufficient for all purposes and have the same effect as if the person so officially signing such bonds had remained in office until their delivery to the purchaser, or had been in office on the date such bonds may bear. However, notwithstanding anything herein to the contrary, such bonds may be issued as provided in the Registered Bond Act of the State of Mississippi.
(5) All bonds and interest coupons issued under the provisions of this section have all the qualities and incidents of negotiable instruments under the provisions of the Uniform Commercial Code, and in exercising the powers granted by this section, the commission shall not be required to and need not comply with the provisions of the Uniform Commercial Code.
(6) The commission shall act as issuing agent for the bonds authorized under this section, prescribe the form of the bonds, determine the appropriate method for sale of the bonds, advertise for and accept bids or negotiate the sale of the bonds, issue and sell the bonds so authorized to be sold, pay all fees and costs incurred in such issuance and sale, and do any and all other things necessary and advisable in connection with the issuance and sale of such bonds. The commission is authorized and empowered to pay the costs that are incident to the sale, issuance and delivery of the bonds authorized under this section from the proceeds derived from the sale of such bonds. The commission may sell such bonds on sealed bids at public sale or may negotiate the sale of the bonds for such price as it may determine to be for the best interest of the State of Mississippi. All interest accruing on such bonds so issued shall be payable semiannually or annually.
If such bonds are sold by sealed bids at public sale, notice of the sale shall be published at least one time, not less than ten (10) days before the date of sale, and shall be so published in one or more newspapers published or having a general circulation in the City of Jackson, Mississippi, selected by the commission.
The commission, when issuing any bonds under the authority of this section, may provide that bonds, at the option of the State of Mississippi, may be called in for payment and redemption at the call price named therein and accrued interest on such date or dates named therein.
(7) The bonds issued under the provisions of this section are general obligations of the State of Mississippi, and for the payment thereof the full faith and credit of the State of Mississippi is irrevocably pledged. If the funds appropriated by the Legislature are insufficient to pay the principal of and the interest on such bonds as they become due, then the deficiency shall be paid by the State Treasurer from any funds in the State Treasury not otherwise appropriated. All such bonds shall contain recitals on their faces substantially covering the provisions of this subsection.
(8) Upon the issuance and sale of bonds under the provisions of this section, the commission shall transfer the proceeds of any such sale or sales to the Mississippi Motion Picture Production Guaranty Fund created in Section 2 of this act. The proceeds of such bonds shall be disbursed solely upon the order of the Mississippi Development Authority under such restrictions, if any, as may be contained in the resolution providing for the issuance of the bonds.
(9) The bonds authorized under this section may be issued without any other proceedings or the happening of any other conditions or things other than those proceedings, conditions and things which are specified or required by this section. Any resolution providing for the issuance of bonds under the provisions of this section shall become effective immediately upon its adoption by the commission, and any such resolution may be adopted at any regular or special meeting of the commission by a majority of its members.
(10) The bonds authorized under the authority of this section may be validated in the Chancery Court of the First Judicial District of Hinds County, Mississippi, in the manner and with the force and effect provided by Chapter 13, Title 31, Mississippi Code of 1972, for the validation of county, municipal, school district and other bonds. The notice to taxpayers required by such statutes shall be published in a newspaper published or having a general circulation in the City of Jackson, Mississippi.
(11) Any holder of bonds issued under the provisions of this section or of any of the interest coupons pertaining thereto may, either at law or in equity, by suit, action, mandamus or other proceeding, protect and enforce any and all rights granted under this section, or under such resolution, and may enforce and compel performance of all duties required by this section to be performed, in order to provide for the payment of bonds and interest thereon.
(12) All bonds issued under the provisions of this section shall be legal investments for trustees and other fiduciaries, and for savings banks, trust companies and insurance companies organized under the laws of the State of Mississippi, and such bonds shall be legal securities which may be deposited with and shall be received by all public officers and bodies of this state and all municipalities and political subdivisions for the purpose of securing the deposit of public funds.
(13) Bonds issued under the provisions of this section and income therefrom shall be exempt from all taxation in the State of Mississippi.
(14) The proceeds of the bonds issued under this section shall be used solely for the purposes therein provided, including the costs incident to the issuance and sale of such bonds.
(15) The State Treasurer is authorized, without further process of law, to certify to the Department of Finance and Administration the necessity for warrants, and the Department of Finance and Administration is authorized and directed to issue such warrants, in such amounts as may be necessary to pay when due the principal of, premium, if any, and interest on, or the accreted value of, all bonds issued under this section; and the State Treasurer shall forward the necessary amount to the designated place or places of payment of such bonds in ample time to discharge such bonds, or the interest thereon, on the due dates thereof.
(16) This section shall be deemed to be full and complete authority for the exercise of the powers therein granted, but this section shall not be deemed to repeal or to be in derogation of any existing law of this state.
SECTION 4. Section 57-89-7, Mississippi Code of 1972, is amended as follows:
57-89-7. (1) (a) A motion picture production company that expends at least Fifty Thousand Dollars ($50,000.00) in base investment or payroll, or both, in the state shall be entitled to a rebate of a portion of the base investment made by the motion picture production company. Subject to the provisions of this section, the amount of the rebate shall be equal to twenty-five percent (25%) of the base investment made by the motion picture production company.
(b) In addition to the rebates authorized under paragraphs (a), (c) and (d) of this subsection, a motion picture production company may receive a rebate equal to twenty-five percent (25%) of payroll paid for any employee who is not a resident and whose wages are subject to the Mississippi Income Tax Withholding Law of 1968. However, if the payroll paid for an employee exceeds Five Million Dollars ($5,000,000.00), then the rebate is authorized only for the first Five Million Dollars ($5,000,000.00) of such payroll.
(c) In addition to the rebates authorized under paragraphs (a), (b) and (d) of this subsection, a motion picture production company may receive a rebate equal to thirty percent (30%) of payroll paid for any employee who is a resident and whose wages are subject to the Mississippi Income Tax Withholding Law of 1968. However, if the payroll paid for an employee exceeds Five Million Dollars ($5,000,000.00), then the rebate is authorized only for the first Five Million Dollars ($5,000,000.00) of such payroll.
(d) In addition to the rebates authorized in paragraphs (a), (b) and (c) of this subsection, a motion picture production company may receive an additional rebate equal to five percent (5%) of the payroll paid for any employee who is an honorably discharged veteran of the United States Armed Forces and whose wages are subject to the Mississippi Income Tax Withholding Law of 1968.
(e) If a motion picture has physical production activities and/or post-production activities both inside and outside the state, then the motion picture production company shall be required to provide an itemized accounting for each employee regarding such activities inside and outside the state for the purposes of proration of eligible payroll based on the percentage of activities performed in the state.
(f) The total amount of rebates authorized for a motion picture project shall not exceed Ten Million Dollars ($10,000,000.00) in the aggregate.
(g) The total amount of rebates authorized in any fiscal year shall not exceed Twenty Million Dollars ($20,000,000.00) in the aggregate.
(2) A motion picture production company desiring a rebate under this section must submit a rebate request to the Department of Revenue upon completion of the project. The request must include a detailed accounting of the base investment made by the motion picture production company and any other information required by the Department of Revenue. Rebates made by the Department of Revenue under this section shall be made from current income tax collections. The Department of Revenue shall not approve any application for a rebate under subsection (1)(b) of this section after July 1, 2016.
(3) A motion picture production company that utilizes the guaranty program provided in Section 2 of this act for a motion picture shall not be eligible for the rebate incentive provided for in this section for the same motion picture.
( * * *4) The Department of Revenue shall
have all powers necessary to implement and administer the provisions of this
section, and the Department of Revenue shall promulgate rules and regulations,
in accordance with the Mississippi Administrative Procedures Law, necessary for
the implementation of this section.
SECTION 5. This act shall take effect and be in force from and after July 1, 2014.
