HOUSE BUSINESS AND INDUSTRY COMMITTEE SUBSTITUTE FOR
HOUSE BILL 415
50th legislature - STATE OF NEW MEXICO - first session, 2011
AN ACT
RELATING TO THE MOTION PICTURE INDUSTRY; PROVIDING FOR SEVERANCE TAX PERMANENT FUND INVESTMENT IN SMALL-BUDGET NEW MEXICO FILMS.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
SECTION 1. A new section of the Severance Tax Bonding Act is enacted to read:
"[NEW MATERIAL] INVESTMENT IN SMALL-BUDGET NEW MEXICO FILMS.--
A. As a portion of the amount of severance tax permanent fund that may be invested in a New Mexico film project pursuant to Section 7-27-5.26 NMSA 1978, and pursuant to the requirements of this section, an investment loan may be made in a small-budget New Mexico film project.
B. An investment made pursuant to this section shall be for no less than one hundred fifty thousand dollars ($150,000) or no more than five million dollars ($5,000,000) in any one small-budget New Mexico film project.
C. The state investment officer shall make investments pursuant to this section only upon approval of the council after a review by the private equity investment advisory committee and a review and recommendation by the New Mexico film division of the economic development department with advice from New Mexico filmmakers. The state investment officer may make debt or equity investments pursuant to this section only in small-budget New Mexico films pursuant to the following conditions:
(1) the film is filmed wholly or substantially in New Mexico;
(2) the producer has agreed that, while filming in New Mexico, no less than one-half of the production crew payroll will be paid to New Mexico residents;
(3) the producer has posted a completion bond that has been approved by the council; provided that a completion bond shall not be required if the fund or project is guaranteed pursuant to Paragraph (4) of this subsection;
(4) the producer obtained a full, unconditional and irrevocable guarantee of repayment of the invested amount in favor of the severance tax permanent fund:
(a) by providing a full, unconditional and irrevocable letter of credit from a United States incorporated bank; or
(b) from a substantial and solvent entity as determined by the council in accordance with its standards and practices;
(5) the producer has agreed to pay a processing fee of no more than one and one-half percent of the investment loan amount to the council or to a third-party fund manager as directed by the council; and
(6) the investment loan shall be repaid at a market rate that is not less than the existing rate of return for ten-year United States treasury bonds plus one and one-half percent; provided that the rate in this paragraph may be reduced by:
(a) one-half percent if the producer agrees to film the majority of the small-budget New Mexico film in counties with a population of less than one hundred thousand according to the most recent federal decennial census;
(b) one-half percent if the producer pays a payroll to a production crew and cast that together are composed of at least eighty-five percent New Mexico residents; and
(c) one-half percent if the cultural affairs department or the tourism department certifies to the council that the small-budget New Mexico film will be of significant value in promoting cultural values or tourism in New Mexico.
D. As used in this section, "small-budget New Mexico film" means a single-medium or multimedia program, including advertising messages, that is fixed on film, videotape, computer disc, laser disc or other similar delivery medium from which the program can be viewed or reproduced; that is intended to be exhibited in theaters, licensed for exhibition by individual television stations, groups of stations, networks, cable television stations or other means or licensed for the home viewing market; that is produced by a person who maintains a legal domicile in New Mexico; and that has a budget of no less than one hundred fifty thousand dollars ($150,000) or no more than five million dollars ($5,000,000)."
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