To amend Section 7 of Act 2001-975, 2001 Third Special Session (Acts 2001, p. 908), relating to certain sales, use, and lodging tax exemptions for certain film production companies working in the state, to extend those exemptions until September 30, 2008, and would provide limitations of such exemptions.

BE IT ENACTED BY THE LEGISLATURE OF ALABAMA:

Section 1. Section 3 of Act 2001-975, 2001 Third Special Session (Acts 2001, p. 908), is amended to read as follows:

"Section 3. Procedure and qualification standards for approval of film project applications.

"(a) The Alabama Film Office shall establish a procedure and qualification standards, based upon industry standards and competition with other states and locations, for a company to apply for approval for each film project to qualify for any of the incentives provided by this article. The office may certify a company as an approved company and authorize the undertaking of a project by entering a written agreement with the company regarding the project. The agreement with the office and an approved company for a project and the approval of certain costs by the office shall be required for the Department of Revenue to consider it for the incentives offered by this article. The company shall receive the incentives as refunds against sales, use, and lodgings taxes paid in an amount equal or up to, but not in excess of 3.5 percent of Alabama payroll. Incentives shall be nontransferable and companies that receive in excess of the amounts entitled under this provision shall be subject to interest and penalty provisions imposed under Title 41. The Department of Revenue shall be charged with verification that the incentive amount shall not exceed 3.5 percent of company payroll in Alabama. All documents necessary for verification of the incentive amount shall be submitted with any petition for refund of taxes filed by the taxpayer. The Department of Revenue shall deny any refund of sales, use or lodgings tax applied for by the company that exceeds 3.5 percent of payroll. The company may appeal the denial of any refund pursuant to the provisions of Alabama Code Section 40-2A-1 et seq.

"(b) With respect to each company applying and each project described in the application, the office shall make inquiries and request materials of the applicant that shall include, but shall not be limited to, marketing plans for the project; a description and desired location of the project; capital and other anticipated expenditures for the project that indicate the total cost of the project and the sources of funding therefor; the anticipated employment and wages to be paid to employees and contractors for the project; plans which indicate the approximate number of days in a year in which the project will be in operation; and the anticipated revenues and expenses generated by the project.

"(c) The office shall analyze the application data supplied and collect and analyze additional information as necessary to determine that the project complies with all of the following:

"(1) It shall have a significant and positive economic impact on the state.

"(2) It shall produce sufficient revenues and public demand to cover the costs of production in Alabama.

"(3) It shall utilize to the extent reasonable under the circumstances, Alabama resources, including, but not limited to, employees, contractors, equipment, materials, and supplies.

"(4) The film project will further the purposes of this article.

"(d) The agreement between the office and the company shall not be a binding contract of the State of Alabama agreeing to make provisions for the company, including incentives. The agreement may contain language regarding the expectation of the parties in regard to a specifically identified project."

Section 2. Section 7 of Act 2001-975, 2001 Third Special Session (Acts 2001, p. 908), is amended to read as follows:

"Section 7. The provisions of this act granting exemption from sales, use, and lodging taxes to film production companies approved by the Alabama Film Commission Office including, but not limited to, those exemptions provided pursuant to subdivision (46) of subsection (a) of Section 40-23-4, subdivision (35) of Section 40-23-62, and subsection (b)(iii) of Section 40-26-1, Code of Alabama 1975, shall sunset at the end of the fiscal year ending September 30, 2005 2008, unless continued by an act of the Legislature."

Section 3. This act shall become effective immediately following its passage and approval by the Governor, or its otherwise becoming law.

Alabama Film Office

Taxation

Tax Exemptions

Sales and Use Tax

Lodging Tax

Acts Amended