(1) Subject to the provisions of this section, on or after July
1, 2012, any production company employing a workforce for any in-state production activities made up of at least fifty percent Colorado residents shall be allowed to claim a performancebased incentive in an amount as follows:
For a production company that originates production activities in Colorado, an amount equal to twenty percent of the total amount of the production company's qualified local expenditures if the total of such expenditures equals or exceeds one hundred thousand dollars; and
(I) Except as provided in subparagraph (II) of this paragraph (b), for a productioncompany that does not originate production activities in Colorado, an amount equal to twenty percent of the total amount of the production company's qualified local expenditures if the total of such expenditures equals or exceeds one million dollars.
(II) For a production company that produces a television commercial or video game and that does not originate production activities in Colorado, any production company employing a workforce for any in-state production activities made up of at least fifty percent Colorado residents shall be allowed to claim a performance-based incentive in an amount equal to twenty percent of the total amount of the production company's qualified local expenditures if the total of such expenditures equals or exceeds two hundred fifty thousand dollars.
(2) (a) In order for a production company to claim a performance-based incentive for production activities in Colorado pursuant to this section, the production company shall apply to the office, in a manner to be determined by the office, prior to beginning production activities in the state for the project for which the production company is seeking a performance-based incentive. The application must include a statement of intent by the production company to produce a film in Colorado for which the production company will be eligible to receive the incentive. The production company shall submit, in conjunction with the application, any documentation necessary to demonstrate that:
The production company's projected qualified local expenditures will satisfy the expenditures specified in subsections (1)(a) and (1)(b) of this section, as applicable; and
If the production company seeks an incentive specified in subsection (1)(a) of thissection, the production company meets the definition of "originates" set forth in section 24-48.5114 (4), including copies of income tax forms, proof of voter registration, or copies of utility bills, to provide documentary evidence that as of the date of applying for a performance-based incentive:
The production company engaged in production activities in the state for other projects in the past twelve consecutive months; or
If the production company created a business entity for the sole purpose of conducting production activities in the state, the manager of the business entity is a resident in the state for the past twelve consecutive months.
The office shall review each application submitted by a production company beforethe production company begins work on a film in Colorado. Based on the information provided in the production company's application, the office shall make an initial determination of whether the production company will be eligible to receive a performance-based incentive and estimate the amount of the incentive that will be due to the production company. The office, with approval of the Colorado economic development commission created in section 24-46-102, shall grant conditional written approval to a production company that, based on the information provided by the production company and based on an analysis of such information by the office and the Colorado economic development commission, will satisfy the requirements of this section and be eligible to claim an incentive. The office shall not issue a performance-based incentive to a production company until the production company and the office have entered into a contract in accordance with the "Procurement Code", articles 101 to 112 of this title 24.
(I) Upon completion of production activities in Colorado, a production company thatreceived conditional approval for a performance-based incentive from the office shall retain a certified public accountant to review and report in writing, and in accordance with professional standards, regarding the accuracy of the financial documents that detail the expenses incurred in the course of the film production activities in Colorado. The certified public accountant's written report shall include documentation of the production company's actual expenditures, including its actual qualified local expenditures, and any documentation necessary to show that the production company employed a workforce for the in-state production activities made up of at least fifty percent Colorado residents. When the production company provides a copy of the certified public accountant's written report and the production company certifies in writing to the office that the amount of the production company's actual qualified local expenditures equals or exceeds the minimum total amount of the production company's qualified local expenditures as specified in subsection (1) of this section, the office shall conduct a review of the certified public accountant's written report to ensure the requirements of this section are met. If the office is satisfied that the requirements of this section are met, and the office confirms that the certified public accountant who provided the written report is from the list described in subsection (2)(c)(II)(C) of this section, then the office may issue an incentive to the production company.
(II) (A) For purposes of this subsection (2)(c), "certified public accountant" means a certified public accountant licenced to practice in this state or a certified public accounting firm that is registered in this state.
Any services of a certified public accountant provided to meet the requirements ofthis subsection (2)(c) shall be performed in Colorado.
The office shall develop a list of certified public accountants that meet the requirements of this section. Such list must be made available to all production companies and must be posted on the office of economic development's website.
The office shall develop procedures for the administration of this section, includingapplication guidelines for production companies applying to receive a performance-based incentive and for the office to issue payment of the incentives pursuant to this section.
If a performance-based incentive is erroneously or improperly issued to a productioncompany for any reason, including for ineligibility, overpayment, or improper payment, the office shall engage the services of the attorney general to recover from the production company any amount of the performance-based incentive that was erroneously or improperly issued. The state treasurer shall credit any such recovered performance-based incentives to the fund.
The office shall include data regarding the number of production companies thatclaimed the performance-based incentive pursuant to this section and the total amount of all incentives claimed during the most recent fiscal year for which such information is available in an annual report to the general assembly.
The total amount of performance-based incentives that the office issues pursuant tothis section in any fiscal year shall not exceed the amount appropriated to the office to be used for the purposes of this section in the applicable fiscal year and any moneys not expended or encumbered from previous fiscal years that were appropriated to the office to be used for the purposes of this section.
(a) There is hereby created in the state treasury the Colorado office of film, television, and media operational account cash fund, referred to in this section as the "fund". The fund shall consist of:
Money transferred to the fund in accordance with section 44-30-701 (2);
Moneys transferred to the fund, including three million dollars that shall be transferred on July 1, 2012, from the general fund to the Colorado office of film, television, and media operational account cash fund; and
Any gifts, grants, or donations from private or public sources that the office is hereby authorized to seek and accept.
The moneys in the fund shall be annually appropriated to the office for the operationof the office, for the performance-based incentive for film production in Colorado as specified in subsection (1) of this section, and for the loan guarantee program as specified in section 24-48.5115 (3).
All moneys not expended or encumbered, and all interest earned on the investment ordeposit of moneys in the fund, remain in the fund and do not revert to the general fund or any other fund at the end of any fiscal year. Any moneys not expended or encumbered from any appropriation at the end of any fiscal year remain available for expenditure in the next fiscal year without further appropriation.
Source: L. 2012: Entire section added, (HB 12-1286), ch. 186, p. 708, § 2, effective July 1. L. 2018: (2) amended, (SB 18-103), ch. 39, p. 456, § 2, effective March 15; (5)(a)(I) amended, (SB 18-034), ch. 14, p. 246, § 35, effective October 1.
Editor's note: This section is similar to former § 24-48.5-311 as it existed prior to 2012.
Cross references: For the legislative declaration in the 2012 act adding this section, see section 1 of chapter 186, Session Laws of Colorado 2012.