An Act Requiring a Dynamic Fiscal Analysis of Changes to Visual Media Production Tax Credits and Reimbursements
Maine Legislature, Session 126, LD 1853
Committee: Taxation
Sponsors: KNIGHT, VALENTINO, BERRY, BROOKS, FREDETTE, HAMANN, STANLEY, HILL, LANGLEY, THIBODEAU
Amends: 5 MRSA §13090-L, 5 MRSA §13090-M, 36 MRSA §191, 36 MRSA §5219-Y, 36 MRSA §6901, 36 MRSA §6902

Legislative Document 
No. 1853 
H.P. 1338 
House of Representatives, April 2, 2014 
An Act Requiring a Dynamic Fiscal Analysis of Changes to Visual 
Media Production Tax Credits and Reimbursements 
(EMERGENCY) 
Reference to the Committee on Taxation suggested and ordered printed. 
MILLICENT M. MacFARLAND 
Clerk 
Presented by Representative KNIGHT of Livermore Falls.  (GOVERNOR'S BILL) 
Cosponsored by Senator VALENTINO of York and Representatives: BERRY of 
Bowdoinham, BROOKS of Winterport, FREDETTE of Newport, HAMANN of South 
Portland, STANLEY of Medway, Senators: HILL of York, LANGLEY of Hancock, 
THIBODEAU of Waldo. 
Emergency preamble. Whereas, acts and resolves of the Legislature do not 
become effective until 90 days after adjournment unless enacted as emergencies; and 
Whereas, during the Second Regular Session of the 125th Legislature, the Joint 
Standing Committee on Taxation passed Resolve 2011, chapter 114 directing the 
Department of Administrative and Financial Services, Bureau of Revenue Services to 
develop a pilot project for a tax simulation model for state dynamic fiscal analysis; and 
Whereas, the pilot project was not completed and final reports not submitted; and 
Whereas, this legislation seeks to perform dynamic fiscal analyses of proposed 
changes to the certified visual media production tax credit using a 3rd-party independent 
reviewer; and 
Whereas, the changes made to the certified visual media production tax credit and 
reimbursement are dependent upon the outcome of the pilot project and cannot occur 
before the pilot project is completed; and 
Whereas, in the judgment of the Legislature, these facts create an emergency within 
the meaning of the Constitution of Maine and require the following legislation as 
immediately necessary for the preservation of the public peace, health and safety; now, 
therefore, 
Be it enacted by the People of the State of Maine as follows: 
PART A 
Sec. A-1.  Pilot project for a tax simulation model for state dynamic fiscal 
analysis.  The Department of Economic and Community Development, referred to in 
this section as "the department," shall undertake a pilot project to develop and evaluate a 
tax simulation model for state dynamic fiscal analysis, which is analysis to estimate the 
effect a change in the tax laws would have on state revenue as well as the fiscal impact of 
the changes in taxpayer behavior and overall economic activity that may occur due to the 
tax law change. The department may enter into a memorandum of understanding with the 
University of Maine to develop and evaluate the pilot project model for a state dynamic 
fiscal analysis of the impact of the changes proposed in this Act to the certified visual 
media production credit established in the Maine Revised Statutes, Title 36, section 
5219-Y and the visual media production reimbursement established in Title 36, section 
6902.  The Department of Administrative and Financial Services, Maine Revenue 
Services may disclose information otherwise protected under Title 36, section 191 to 
specific University of Maine staff members identified in the memorandum of 
understanding for the purpose of developing and evaluating the pilot project model for 
state dynamic fiscal analysis of the changes proposed in this Act to the certified visual 
media production credit and the visual media production reimbursement.  The 
memorandum of understanding must include a completion date of August 1, 2014 and a 
requirement to report the findings of the pilot project to the department, Maine Revenue 
Services and the Office of Fiscal and Program Review. 
Sec. A-2.  Findings and report.  No later than August 15, 2014, the Department 
of Administrative and Financial Services, Maine Revenue Services and the Office of 
Fiscal and Program Review each shall evaluate the completed pilot project model under 
section 1 and submit a joint report to the Joint Standing Committee on Taxation that 
includes the findings of the evaluation and a determination of whether the changes 
proposed in this Act to the certified visual media production credit and the visual media 
production reimbursement will have a negative or a positive fiscal impact on state 
revenue.  Maine Revenue Services and the Office of Fiscal and Program Review also 
shall file a copy of the report, including the determination of fiscal impact, with the 
Secretary of State and the Office of the Revisor of Statutes. 
PART B 
Sec. B-1.  5 MRSA §13090-L, sub-§§1, 3, 5 and 7, as amended by PL 2009, c. 
470, §1, are further amended to read: 
1.  Generally.  A visual media production company that intends to undertake a visual 
media production in this State may apply to the department to have the production, or a 
portion of the production, certified under subsection 3 for purposes of the visual media 
production reimbursement pursuant to Title 36, chapter 919-A and the credit under Title 
36, section 5219-Y. 
3.  Requirements for visual media production certificate.  Applications for a 
visual media production certificate must be made on a form prescribed and furnished by 
the department.  The applicant must: 
A.  Provide the names of the principals involved in the visual media production and 
contact information for them; 
B.  Provide a certificate of insurance for the visual media production; 
C.  Provide financial information that demonstrates that the visual media production 
is fully financed and that at least $75,000 of visual media production expense will be 
incurred for the visual media production certified in accordance with this subsection; 
D.  Provide data demonstrating that the visual media production will benefit the 
people of the State by increasing opportunities for employment and will strengthen 
the economy of the State; 
E.  Agree to include, in the certified visual media production, an on-screen credit for 
the State of Maine.  The exact wording and size of that credit must be determined in 
rules adopted by the Maine State Film Office and the department.  The Maine State 
Film Office or the department may, at its discretion, exempt visual media productions 
from this requirement.  Rules adopted pursuant to this paragraph are routine technical 
rules as defined in chapter 375, subchapter 2-A; 
F.  Provide evidence that the visual media production company is not owned by, 
affiliated with or controlled by, in whole or in part, a person that is in default on a 
loan made by the State or a loan guaranteed by the State;  
G.  Provide any other information required by the department; and 
H.  Provide a projected schedule for preproduction, production and postproduction of 
the visual media production that shows that the production will begin within 60 days 
after certification pursuant to this subsection. 
To qualify for a visual media production certificate, a visual media production company 
must demonstrate to the satisfaction of the commissioner that the visual media production 
company has met, or will meet, the requirements of this subsection.  If the department 
determines that the applicant does not qualify for a visual media production certificate, it 
must inform the applicant of that determination in writing within 4 weeks of receiving the 
application.  As soon as practicable, the department shall issue a visual media production 
certificate for a visual media production that qualifies.  The department shall include with 
the certificate information regarding the tax credit report under subsection 4 and 
procedures for claiming reimbursement under Title 36, chapter 919-A and the credit 
under Title 36, section 5219-Y. 
5.  Department to provide information to State Tax Assessor.  The department 
shall provide to the State Tax Assessor copies of the visual media production certificate 
issued pursuant to subsection 3, together with any other information reasonably required 
by the State Tax Assessor for the administration of visual media production 
reimbursement under Title 36, chapter 919-A and the credit under Title 36, section 
5219-Y. 
7.  Report.  The Maine State Film Office shall submit a report by January 15th 
annually to the joint standing committee of the Legislature having jurisdiction over 
taxation matters regarding the certification and reporting process pursuant to this section 
and the visual media production tax credit and reimbursement activities pursuant to Title 
36, section 5219-Y and Title 36, chapter 919-A.  The report must include a description of 
any rule-making activity related to the implementation of the credit and reimbursement 
activities, outreach efforts to visual media production companies, the number of 
applications for the visual media production credit and tax reimbursement, the number of 
credits and reimbursements granted, the revenue loss associated with the credit and 
reimbursement and the amount of visual media production expenses generated in the 
State as a result of the credit and reimbursement. 
Sec. B-2.  5 MRSA §13090-M, sub-§4, ¶E, as enacted by PL 2011, c. 372, §1, is 
amended to read: 
E.  A signed agreement with the department provides that the project or production 
will not be the basis for a claim for an income tax credit under Title 36, section 
5219-Y or reimbursement under Title 36, chapter 919-A. 
Sec. B-3.  36 MRSA §191, sub-§2, ¶MM, as amended by PL 2009, c. 652, Pt. A, 
§51, is further amended to read: 
MM.  The disclosure to an authorized representative of the Department of Economic 
and Community Development of information required for the administration of the 
visual media production credit under section 5219-Y, the employment tax increment 
financing program under chapter 917, the visual media production reimbursement 
program under chapter 919-A or the Pine Tree Development Zone program under 
Title 30-A, chapter 206, subchapter 4; 
Sec. B-4.  36 MRSA §5219-Y, as amended by PL 2011, c. 240, §37, is repealed. 
Sec. B-5.  36 MRSA §6901, sub-§2, as amended by PL 2011, c. 240, §45 and 
affected by §47, is further amended to read: 
2.  Certified production wages.  "Certified production wages" means wages subject 
to withholding under section 5250, subsection 1 that are paid by a visual media 
production company for work on a certified visual media production. "Certified 
production wages" includes an amount paid to a temporary employee-leasing company 
for personal services rendered in this State by a leased employee in connection with a 
certified visual media production and an amount paid for the services of a performing 
artist working in the State in connection with a certified visual media production and 
other contractual payments for the services of individuals working in the State.  "Certified 
production wages" includes only the first $50,000 $100,000 paid to or with respect to a 
particular individual for personal services rendered in connection with a particular 
certified visual media production. 
Sec. B-6.  36 MRSA §6902, sub-§1, as amended by PL 2011, c. 240, §46, is 
further amended to read: 
1.  Generally.  A visual media production company is allowed a reimbursement 
equal to 12% 25% of certified production wages paid to or with respect to an individual 
who is a resident of Maine and 10% of certified production wages paid to or with respect 
to an individual who is not a resident of Maine. 
Sec. B-7.  36 MRSA §6902, sub-§1-A is enacted to read: 
1-A.  Reimbursement for expenses.  A visual media production company is allowed 
a reimbursement in an amount equal to 20% of its nonwage visual media production 
expenses incurred with respect to a certified visual media production if the visual media 
production company has visual media production expenses of $75,000 or more with 
respect to that certified visual media production.  For purposes of this section, "nonwage 
visual media production expenses" has the same meaning as in Title 5, section 13090-L, 
subsection 2-A, paragraph F, except that "nonwage visual media production expenses" 
does not include certified production wages or any amount that would be included in 
certified production wages but for the $100,000 limit provided by section 6901, 
subsection 2. 
Sec. B-8.  Contingent effective date.  This Part takes effect only if the 
Department of Administrative and Financial Services, Maine Revenue Services and the 
Office of Fiscal and Program Review jointly report to the Joint Standing Committee on 
Taxation that the result of the dynamic fiscal analysis pilot project conducted pursuant to 
Part A is a positive fiscal impact on state revenue.  Maine Revenue Services and the 
Office of Fiscal and Program Review shall provide a copy of their joint report and certify 
to the Secretary of State and the Office of the Revisor of Statutes the determination as to 
the positive or negative fiscal impact on state revenue of the pilot project conducted 
pursuant to Part A.   
Emergency clause.  In view of the emergency cited in the preamble, this 
legislation takes effect when approved. 
SUMMARY 
Part A of this bill creates a pilot project to develop and evaluate a tax simulation 
model for state dynamic fiscal analysis of potential changes to the certified visual media 
production credit established in the Maine Revised Statutes, Title 36, section 5219-Y and 
the visual media production reimbursement established in Title 36, section 6902.  The 
Department of Economic and Community Development is permitted to enter into a 
memorandum of understanding with the University of Maine to conduct the pilot project.   
The Department of Administrative and Financial Services, Maine Revenue Services and 
the Office of Fiscal and Program Review are required to evaluate the findings of the pilot 
project and to jointly report to the Joint Standing Committee on Taxation whether the 
proposed changes to the visual media production credit and reimbursement would result 
in a negative or positive fiscal impact. 
Part B of this bill repeals the certified visual media production credit and instead 
increases the reimbursement amount for certified production wages paid from 12% to 
25% for residents of Maine, increases the cap on the reimbursement of wages from 
$50,000 to $100,000 and provides for a reimbursement of 20% of nonwage visual media 
production expenses.  These changes take effect only if the result of the joint finding of 
Maine Revenue Services and the Office of Fiscal and Program Review is that the changes 
proposed in this Part would result in a positive fiscal impact on state revenue.