Notice of Adoption MEDIA
In the matter of the adoption of New Rules I through IX pertaining to the Montana Economic Development Industry Advancement Act (MEDIA)
TO: All Concerned Persons
1. On November 8, 2019, the Department of Commerce published MAR Notice No. 8-119-174 pertaining to the public hearing on the proposed adoption of the above-stated rules at page 1929 of the 2019 Montana Administrative Register, Issue Number 21.
2. The department has adopted the following rules as proposed: NEW RULES I (8.119.301), II (8.119.302), III (8.119.303), IV (8.119.304), V (8.119.305), VI (8.119.306), VII (8.119.307), VIII (8.119.308), and IX (8.119.309).
3. The department has thoroughly considered the comments and testimony received. A summary of the comments received and the department's responses are as follows:
COMMENT NO. 1: Activities that qualify as a postproduction expenditure should be clarified.
RESPONSE NO. 1: NEW RULE I(14) defines "qualified postproduction activity" as an activity performed in this state on a qualified production employing traditional, emerging, and new workflow techniques used in postproduction for picture, sound, and music editing, rerecording and mixing, visual effects, graphic design, original scoring, animation, musical composition, and other activities performed after initial production and including activities performed on previously produced and edited content.
COMMENT NO. 2: In defining "qualified production activity," only the coverage of news should be excluded from the definition.
RESPONSE NO. 2: The definition of "qualified production activity" is defined by 15-31-1003(16)(c), MCA, and cannot be amended through the administrative rulemaking process.
COMMENT NO. 3: The tax consequence for taxpayers utilizing a "loan-out company" could be clarified.
RESPONSE NO. 3: Clarification may be found in 15-31-1003, MCA.
COMMENT NO. 4: What is the definition of a "production company"?
RESPONSE NO. 4: "Production company" means a company primarily engaged in qualified production activities that have been approved by the Department of Commerce. The term does not include any form of business owned, affiliated, or controlled, in whole or in part, by a company or person that is in default on a tax obligation of the state, a loan made by the state, or a loan guaranteed by the state
COMMENT NO. 5: There is a cap of $10,000,000 in total claims for the tax credits per calendar year. Can unclaimed tax credits be carried forward to the next calendar year?
RESPONSE NO. 5: No. Pursuant to 15-31-1010, MCA, total claims for the tax credits for media production and postproduction wages may not exceed $10 million per calendar year.
COMMENT NO. 6: Applicants should be required to submit financial information in the form of a top sheet budget and that type of information, if submitted, should be confidential but not secret.
RESPONSE NO. 6: Applicants are required to submit budget information as part of the application process. Financial information submitted to the department is subject to the public records and privacy laws of the state.
COMMENT NO. 7: Who approves an application for a state certification of production and state certification of postproduction company? The criteria for approving or denying an application should be identified.
RESPONSE NO. 7: The Montana Film Office approves or denies applications after review of a complete application.
/s/ Garrett Norcott /s/ Tara Rice
Garrett Norcott Tara Rice
Rule Reviewer Director
Department of Commerce
Certified to the Secretary of State February 18, 2020.
Montana Administrative Register 4-2/28/20
TO: All Concerned Persons
1. On November 8, 2019, the Department of Commerce published MAR Notice No. 8-119-174 pertaining to the public hearing on the proposed adoption of the above-stated rules at page 1929 of the 2019 Montana Administrative Register, Issue Number 21.
2. The department has adopted the following rules as proposed: NEW RULES I (8.119.301), II (8.119.302), III (8.119.303), IV (8.119.304), V (8.119.305), VI (8.119.306), VII (8.119.307), VIII (8.119.308), and IX (8.119.309).
3. The department has thoroughly considered the comments and testimony received. A summary of the comments received and the department's responses are as follows:
COMMENT NO. 1: Activities that qualify as a postproduction expenditure should be clarified.
RESPONSE NO. 1: NEW RULE I(14) defines "qualified postproduction activity" as an activity performed in this state on a qualified production employing traditional, emerging, and new workflow techniques used in postproduction for picture, sound, and music editing, rerecording and mixing, visual effects, graphic design, original scoring, animation, musical composition, and other activities performed after initial production and including activities performed on previously produced and edited content.
COMMENT NO. 2: In defining "qualified production activity," only the coverage of news should be excluded from the definition.
RESPONSE NO. 2: The definition of "qualified production activity" is defined by 15-31-1003(16)(c), MCA, and cannot be amended through the administrative rulemaking process.
COMMENT NO. 3: The tax consequence for taxpayers utilizing a "loan-out company" could be clarified.
RESPONSE NO. 3: Clarification may be found in 15-31-1003, MCA.
COMMENT NO. 4: What is the definition of a "production company"?
RESPONSE NO. 4: "Production company" means a company primarily engaged in qualified production activities that have been approved by the Department of Commerce. The term does not include any form of business owned, affiliated, or controlled, in whole or in part, by a company or person that is in default on a tax obligation of the state, a loan made by the state, or a loan guaranteed by the state
COMMENT NO. 5: There is a cap of $10,000,000 in total claims for the tax credits per calendar year. Can unclaimed tax credits be carried forward to the next calendar year?
RESPONSE NO. 5: No. Pursuant to 15-31-1010, MCA, total claims for the tax credits for media production and postproduction wages may not exceed $10 million per calendar year.
COMMENT NO. 6: Applicants should be required to submit financial information in the form of a top sheet budget and that type of information, if submitted, should be confidential but not secret.
RESPONSE NO. 6: Applicants are required to submit budget information as part of the application process. Financial information submitted to the department is subject to the public records and privacy laws of the state.
COMMENT NO. 7: Who approves an application for a state certification of production and state certification of postproduction company? The criteria for approving or denying an application should be identified.
RESPONSE NO. 7: The Montana Film Office approves or denies applications after review of a complete application.
/s/ Garrett Norcott /s/ Tara Rice
Garrett Norcott Tara Rice
Rule Reviewer Director
Department of Commerce
Certified to the Secretary of State February 18, 2020.
Montana Administrative Register 4-2/28/20
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