To amend section 5747.98 and to enact sections 122.85 and 5747.66 of the Revised Code to create a tax credit for individuals who invest in state-certified motion picture productions and to create the Ohio Media Production Advisory Committee to prepare a report about and make recommendations for the growth of the electronic media production industry throughout the state.

Section 1. That section 5747.98 be amended and sections 122.85 and 5747.66 of the Revised Code be enacted to read as follows:

Sec. 122.85.  (A) As used in this section:

(1) "Base investment" has the same meaning as in section 5747.66 of the Revised Code.

(2) "Company" means a corporation, partnership, limited liability company, or other business entity.

(3) "Headquartered in Ohio" means a corporation incorporated in Ohio, or a partnership, limited liability company, or other business entity domiciled and headquartered in Ohio.

(4) "Motion picture production" means a nationally distributed feature-length film, video, or television series made in this state, in whole or in part, for theatrical or television viewing, or as a television pilot, or a commercial made in this state that will be broadcast or cablecast to at least twenty-five per cent of the households in the United States, and includes home videos for foreign or domestic retail distribution, digital interactive media for retail distribution, music videos, episodics, serials, infomercials, documentaries, pilots, and programs produced for theatrical, cable, television network, or syndicated release. "Motion picture production" does not include political advocacy commercials, the production of radio or television coverage of news or athletic events, or any other production utilizing station staff.

(5) "Motion picture production company" means a company engaged in the business of producing motion pictures, but does not include any company owned, affiliated, or controlled, in whole or in part, by any company or person that is in default on a loan made by the state or a loan guaranteed by the state.

(B) For the purpose of encouraging the development in Ohio of a strong capital base for motion picture productions in this state, the director of development may certify a motion picture produced by a motion picture production company as a state-certified production, the investment in the production of which may qualify for a tax credit under section 5747.66 of the Revised Code. The director, in consultation with the tax commissioner, shall adopt rules that establish criteria for determining what motion picture productions qualify as state-certified productions for purposes of this section and section 5747.66 of the Revised Code. The rules shall require that the motion picture production company be headquartered in Ohio; that a motion picture production that is a theatrical film include a credit acknowledgment in the film that it was filmed in this state, and give credit to any Ohio film office rendering services to the production; and that the form and content of applications for tax credit certificates under this section include, at a minimum, all of the following information:

(1) The name and telephone number of the motion picture production company;

(2) The name and telephone number of the company's contact person;

(3) A list of the first preproduction date through the last production date in Ohio;

(4) The Ohio production office address and telephone number;

(5) The total budget of the motion picture production;

(6) The total expenditures in Ohio;

(7) The total percentage of the motion picture production being shot in Ohio;

(8) The level of employment of Ohio cast and crew;

(9) A synopsis of the script;

(10) A creative elements list that includes the names of the principal cast and crew, and the producer and director;

(11) The date principal photography of the motion picture production will begin;

(12) The distribution plan for the motion picture production, including domestic and international distribution, and the sales estimates for the production.

(C) An application for a tax credit certificate issued under this section shall be completed before production of a motion picture commences. Expenditures made prior to initial certification of a motion picture production as a state-certified production shall not be included in the calculation of base investment under division (B) of section 5747.66 of the Revised Code.

(D)(1) The director of development shall submit the director's initial certification of a motion picture production as a state-certified production to the tax commissioner. The initial certification shall include a unique identifying number for each state-certified production.

(2) Upon completion of the motion picture production, the director of development shall review the motion picture production company's base investment and issue a tax credit certificate to any taxpayer who is an individual who invested in the motion picture production and who may be eligible to claim the tax credit under section 5747.66 of the Revised Code. The tax credit certificate shall include the identifying number assigned to that state-certified production in the initial certification. The director shall issue certificates in the order in which the principal photography of the motion picture production was scheduled to begin. The director shall not issue a tax credit certificate if the production, in the opinion of the director, violates any Ohio obscenity statute.

Sec. 5747.66.  (A) As used in this section:

(1) "Base investment" means expenditures paid by a motion picture production company to companies headquartered in Ohio, expenditures for Ohio resident talent employees, and that portion of expenditures paid to Ohio residents for below-the-line employee wages, benefits, payroll costs, production equipment and facility rentals or purchases, legal services, accounting services, and post-production services. Nonresident crew wages, benefits, and payroll costs may be included in the calculation of base investment under division (B) of this section if at least seventy per cent of a state-certified production's crew wages and benefits are allocated to Ohio residents and nonresident crew are treated as Ohio employees and have Ohio employee withholding taxes withheld from their wages. "Base investment" also includes:

(a) Guaranteed holding fees and residuals for commercials in an amount that does not exceed three times the screen actors guild/American federation of television and radio artists scale;

(b) Payments made to a talent or crew personal service corporation if the corporation pays the tax levied under Chapter 5751. of the Revised Code on those payments, and the person receiving payments from the corporation pays the tax levied under section 5747.02 of the Revised Code on those payments and is covered by the corporation under Ohio workers' compensation and unemployment insurance;

(c) Up to twenty per cent of combined talent agent commissions or service fees; and

(d) The cost of renting or purchasing highly specialized production equipment from entities outside this state, provided that the equipment is not available in this state and provided that the application filed under section 122.85 of the Revised Code clearly states the reason for having to do so.

"Base investment" does not include talent wages, salaries, and benefits paid in excess of three times the screen actors guild/American federation of television and radio artists scale for actors or artists with an equity box office interest or similar interest in a motion picture production; advertising, marketing, distribution, or post-production of a motion picture production; meals, except craft services; car rentals; air transportation; or lodging, except for Ohio resident talent or crew.

(2) "Company," "headquartered in Ohio," "motion picture production," and "motion picture production company" have the same meanings as in section 122.85 of the Revised Code.

(3) "State-certified production" means a motion picture production for which a tax credit certificate has been issued by the director of development under section 122.85 of the Revised Code.

(B) Beginning in taxable year 2008, a nonrefundable credit is allowed against the tax imposed by section 5747.02 of the Revised Code for a taxpayer who is an individual who invests money in a state-certified production. No taxpayer is entitled to a credit under this section unless the taxpayer has obtained a tax credit certificate issued by the director of development under division (D)(2) of section 122.85 of the Revised Code. The credit shall be calculated as a percentage of the investment, according to the total base investment dollars certified for the production, as follows:

(1) If the total base investment is greater than three hundred thousand dollars and less than or equal to eight million dollars, the taxpayer shall be allowed a credit of fifteen per cent of the actual investment made by the taxpayer;

(2) If the total base investment is greater than eight million dollars, the taxpayer shall be allowed a credit of twenty per cent of the actual investment made by the taxpayer.

The total dollar amount of credits that may be issued under this section to taxpayers in a taxable year shall not exceed three million dollars.

(C) The credit shall be claimed in the taxable year indicated on the tax credit certificate. The taxpayer shall claim the credit allowed under this section in the order required by section 5747.98 of the Revised Code. The taxpayer may carry forward any credit amount in excess of its tax due under section 5747.02 of the Revised Code, after allowing for all other credits preceding the credit allowed under this section in that order. The excess credit, if any, may be carried forward for not more than three taxable years following the taxable year for which the credit is first claimed under this section.

(D) The total tax credits taken under this section for a state-certified production shall never exceed the total base investment for that production, and the total dollar amount of tax credits that may be taken for a state-certified production shall not exceed five hundred thousand dollars.

Sec. 5747.98.  (A) To provide a uniform procedure for calculating the amount of tax due under section 5747.02 of the Revised Code, a taxpayer shall claim any credits to which the taxpayer is entitled in the following order:

(1) The retirement income credit under division (B) of section 5747.055 of the Revised Code;

(2) The senior citizen credit under division (C) of section 5747.05 of the Revised Code;

(3) The lump sum distribution credit under division (D) of section 5747.05 of the Revised Code;

(4) The dependent care credit under section 5747.054 of the Revised Code;

(5) The lump sum retirement income credit under division (C) of section 5747.055 of the Revised Code;

(6) The lump sum retirement income credit under division (D) of section 5747.055 of the Revised Code;

(7) The lump sum retirement income credit under division (E) of section 5747.055 of the Revised Code;

(8) The low-income credit under section 5747.056 of the Revised Code;

(9) The credit for displaced workers who pay for job training under section 5747.27 of the Revised Code;

(10) The campaign contribution credit under section 5747.29 of the Revised Code;

(11) The twenty-dollar personal exemption credit under section 5747.022 of the Revised Code;

(12) The joint filing credit under division (G) of section 5747.05 of the Revised Code;

(13) The nonresident credit under division (A) of section 5747.05 of the Revised Code;

(14) The credit for a resident's out-of-state income under division (B) of section 5747.05 of the Revised Code;

(15) The credit for employers that enter into agreements with child day-care centers under section 5747.34 of the Revised Code;

(16) The credit for employers that reimburse employee child care expenses under section 5747.36 of the Revised Code;

(17) The credit for adoption of a minor child under section 5747.37 of the Revised Code;

(18) The credit for purchases of lights and reflectors under section 5747.38 of the Revised Code;

(19) The job retention credit under division (B) of section 5747.058 of the Revised Code;

(20) The credit for purchases of new manufacturing machinery and equipment under section 5747.26 or section 5747.261 of the Revised Code;

(21) The second credit for purchases of new manufacturing machinery and equipment and the credit for using Ohio coal under section 5747.31 of the Revised Code;

(22) The job training credit under section 5747.39 of the Revised Code;

(23) The enterprise zone credit under section 5709.66 of the Revised Code;

(24) The credit for the eligible costs associated with a voluntary action under section 5747.32 of the Revised Code;

(25) The credit for employers that establish on-site child day-care centers under section 5747.35 of the Revised Code;

(26) The ethanol plant investment credit under section 5747.75 of the Revised Code;

(27) The credit for purchases of qualifying grape production property under section 5747.28 of the Revised Code;

(28) The export sales credit under section 5747.057 of the Revised Code;

(29) The credit for research and development and technology transfer investors under section 5747.33 of the Revised Code;

(30) The enterprise zone credits under section 5709.65 of the Revised Code;

(31) The research and development credit under section 5747.331 of the Revised Code;

(32) The motion picture production investment credit under section 5747.66 of the Revised Code;

(33) The refundable jobs creation credit under division (A) of section 5747.058 of the Revised Code;

(33)(34) The refundable credit for taxes paid by a qualifying entity granted under section 5747.059 of the Revised Code;

(34)(35) The refundable credits for taxes paid by a qualifying pass-through entity granted under division (J) of section 5747.08 of the Revised Code;

(35)(36) The refundable credit for tax withheld under division (B)(1) of section 5747.062 of the Revised Code;

(36)(37) The refundable credit under section 5747.80 of the Revised Code for losses on loans made to the Ohio venture capital program under sections 150.01 to 150.10 of the Revised Code.

(B) For any credit, except the credits enumerated in divisions (A)(32)(33) to (36)(37) of this section and the credit granted under division (I) of section 5747.08 of the Revised Code, the amount of the credit for a taxable year shall not exceed the tax due after allowing for any other credit that precedes it in the order required under this section. Any excess amount of a particular credit may be carried forward if authorized under the section creating that credit. Nothing in this chapter shall be construed to allow a taxpayer to claim, directly or indirectly, a credit more than once for a taxable year.

Section 2. That existing section 5747.98 of the Revised Code is hereby repealed.

Section 3. (A)(1) The Ohio Media Production Advisory Committee shall conduct a comprehensive study of the electronic media production industry in Ohio. The study shall identify and benchmark Ohio's current and potential capabilities for growth in the sectors and subsectors of commercials and industrial, educational, and entertainment media.

(2) Based on the study, the Committee shall prepare a comprehensive report of its findings, along with recommendations for private sector and public policy initiatives that can lead to the future growth of the electronic media production industry, increase job opportunities, and enhance Ohio's image as a desirable place to do business.

(3) Broadcast and cable television, radio stations, and musical and performing arts groups shall not be within the Committee's purview or addressed in its study or report.

(B) In carrying out its duties under division (A) of this section, the Ohio Media Production Advisory Committee shall identify competitive market factors and seek input and advice from specialists in Ohio and elsewhere who are involved in the production of electronic media, including national, regional, and local advertisers and advertising agencies; production, post-production, and sound recording studios; equipment and crew service vendors; independent producers; writers; the academic community; specialists in entertainment law, accounting, and finance; elected and appointed officials; and business, trade, labor, and professional organizations.

(C) Not later than nine months after the effective date of this section, the Committee shall provide to the General Assembly copies of its recommendations and report.

Section 4. (A) The Ohio Media Production Advisory Committee is hereby created to advise the Director of Development on issues pertaining to electronic media production growth throughout Ohio; to evaluate and advise the General Assembly as to the effectiveness of the tax credit enacted by this act; to offer advice to the Director regarding the adoption under section 122.85 of the Revised Code of rules for, and the interpretation and implementation of, the tax credit; and to carry out the duties prescribed in Section 3 of this act. The Committee shall consist of the following members:

(1) Three members of the House of Representatives, to be appointed by the Speaker of the House of Representatives in consultation with the Minority Leader of the House of Representatives;

(2) Three members of the Senate, to be appointed by the President of the Senate in consultation with the Minority Leader of the Senate;

(3) One representative of one film commission in Ohio, to be appointed by the Governor;

(4) One representative of the Department of Taxation, to be appointed by the Tax Commissioner;

(5) One representative of the Department of Development, to be appointed by the Director of Development;

(6) One representative of each of the following entities headquartered in Ohio, to be appointed by the Governor:

(a) A national advertiser;

(b) An advertising agency;

(c) A production company;

(d) A post-production company;

(e) A sound recording facility;

(f) A production payroll, production tax, or production accounting firm;

(g) An independent producer;

(h) An equipment and crew service provider;

(i) Talent from the Screen Actors Guild or the American Federation of Television and Radio Artists.

(7) One representative each from a full service production company headquartered in northeast Ohio, in central Ohio, and in southwest Ohio, all three of these representatives to be appointed by the Governor;

(8) One representative of higher education in Ohio who is involved with media production, to be appointed by the Governor.

(B) Appointments to the Committee shall be made within thirty days after the effective date of this section. The chairperson of the Committee shall be one of the Senate members of the Committee, selected by the President of the Senate. The Committee shall meet at least once every two months. Members of the Committee shall serve without compensation.

(C) Upon submission of its recommendations and report under Section 3 of this act, the Committee shall cease to exist.

Section 5. From fiscal year 2008 appropriations to the Department of Development that may be used for this purpose, the Director of Development shall provide up to $50,000 to pay for the study and report required by Section 3 of this act.