SENATE BILL 390

53rd legislature - STATE OF NEW MEXICO - first session, 2017

INTRODUCED BY

Jeff Steinborn

AN ACT

RELATING TO TAXATION; CHANGING THE DEFINITION OF "QUALIFIED PRODUCTION FACILITY" AS IT APPLIES TO THE FILM PRODUCTION TAX CREDIT.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:

     SECTION 1. Section 7-2F-2 NMSA 1978 (being Laws 2003, Chapter 127, Section 2, as amended) is amended to read:

     "7-2F-2. DEFINITIONS.--As used in the Film Production Tax Credit Act:

          A. "affiliated person" means a person who directly or indirectly owns or controls, is owned or controlled by or is under common ownership or control with another person through ownership of voting securities or other ownership interests representing a majority of the total voting power of the entity;

          B. "background artist" means a person who is not a performing artist but is a person of atmospheric business whose work includes atmospheric noise, normal actions, gestures and facial expressions of that person's assignment; or a person of atmospheric business whose work includes special abilities that are not stunts; or a substitute for another actor, whether photographed as a double or acting as a stand-in;

          C. "commercial audiovisual product" means a film or a [videogame] video game intended for commercial exploitation;

          D. "division" means the New Mexico film division of the economic development department;

          E. "federal new markets tax credit program" means the tax credit program codified as Section 45D of the United States Internal Revenue Code of 1986, as amended;

          F. "film" means a single medium or multimedia program, excluding advertising messages other than national or regional advertising messages intended for exhibition, that:

                (1) is fixed on film, a digital medium, videotape, computer disc, laser disc or other similar delivery medium;

                (2) can be viewed or reproduced;

                (3) is not intended to and does not violate a provision of Chapter 30, Article 37 NMSA 1978; and

                (4) is intended for reasonable commercial exploitation for the delivery medium used;

          G. "fiscal year" means the state fiscal year beginning on July 1;

          H. "industry crew" means a person in a position that is off-camera and who provides technical services during the physical production of a film. "Industry crew" does not include a writer, director, producer, background artist or performing artist;

          I. "New Mexico resident" means an individual who is domiciled in this state during any part of the taxable year or an individual who is physically present in this state for one hundred eighty-five days or more during the taxable year; but any individual, other than someone who was physically present in the state for one hundred eighty-five days or more during the taxable year and who, on or before the last day of the taxable year, changed the individual's place of abode to a place without this state with the bona fide intention of continuing actually to abide permanently without this state is not a resident for the purposes of the Film Production Tax Credit Act for periods after that change of abode;

          J. "performing artist" means an actor, on-camera stuntperson, puppeteer, pilot who is a stuntperson or actor, specialty foreground performer or narrator; and who speaks a line of dialogue, is identified with the product or reacts to narration as assigned. "Performing artist" does not include a background artist;

          K. "personal services business" means a business organization, with or without physical presence, that receives payments pursuant to the Film Production Tax Credit Act for the services of a performing artist;

          L. "physical presence" means a physical address in New Mexico from which a vendor conducts business, stores inventory or otherwise creates, assembles or offers for sale the product purchased or leased by a film production company and the business owner or an employee of the business is a resident;

          M. "postproduction expenditure" means an expenditure for editing, Foley recording, automatic dialogue replacement, sound editing, special effects, including computer-generated imagery or other effects, scoring and music editing, beginning and end credits, negative cutting, soundtrack production, dubbing, subtitling or addition of sound or visual effects; but not including an expenditure for advertising, marketing, distribution or expense payments;

          N. "principal photography" means the production of a film during which the main visual elements are created; and

          O. "qualified production facility" means a building, or complex of buildings, building improvements and associated back-lot facilities in which films are or are intended to be regularly produced and that contain at least one:

                (1) sound stage with contiguous, clear-span floor space of at least seven thousand square feet and a ceiling height of no less than twenty-one feet; or

                (2) standing set that includes at least one interior, and at least five exteriors, built or [re-purposed] repurposed for film production use on a continual basis and is located on at least [fifty] forty-five acres of contiguous space designated for film production use."

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