KRS 154.61-010: Definitions for subchapter.

As used in this subchapter:

(1) "Above-the-line production crew" means employees involved with the production

of a motion picture or entertainment production whose salaries are negotiated prior

to commencement of production, such as actors, directors, producers, and writers;

(2) "Animated production" means a nationally distributed feature -length film created

with the rapid display of a sequence of images using 2 -D or 3 -D graphics of

artwork or model positions in order to create an illusion of movement;

(3) "Approved company" means an elig ible company approved for incentives provided

under KRS 141.383 and 154.61-020;

(4) "Below-the-line production crew" means employees involved with the production

of a motion picture or entertainment production except above -the-line production

crew. "Below-the-line production crew" includes but is not limited to:

(a) Casting assistants;

(b) Costume design;

(c) Extras;

(d) Gaffers;

(e) Grips;

(f) Location managers;

(g) Production assistants;

(h) Set construction staff; and

(i) Set design staff;

(5) "Cabinet" means the Cabinet for Economic Development;

(6) "Certified audit" means an audit that:

(a) Contains production-related expenditures;

(b) Is completed within one hundred eighty (180) days of the completion of

production in Kentucky; and

(c) Is conducted in accordance with the office's standards established by

administrative regulations promulgated in accordance with KRS Chapter 13A,

including the adoption of expenditure sampling procedures;

(7) "Commonwealth" means the Commonwealth of Kentucky;

(8) "Compensation" means:

(a) Compensation included in adjusted gross income as calculated in KRS

141.019; and

(b) The following:

1. Employer-paid payroll taxes;

2. Union and guild benefits;

3. Workers' compensation insurance premiums;

4. Payroll service fees; and

5. Qualifying per diem;

(9) "Continuous film production" means a motion picture or entertainment production

that:

(a) 1. Has a projected minimum spend of ten million dollars ($10,000,000) for

qualifying expenditures and qualifying payroll expenditures, which may

be a prorated amount based on the total budget of the production; and

2. Has a minimum of fifty percent (50%) of the funds available and the

ability to raise the remaining funds necessary to complete the filming

and production, which may be verified by:

a. Bank statements or other financial documents; or

b. A fundraising plan at the request of the office;

(b) Demonstrates a distribution contract for each motion or entertainment

production; and

(c) Maintains:

1. An apprenticeship program or on -the-job training program as defined in

KRS 343.010; or

2. Partners with a film studies program with an accredited institution of

postsecondary education located in the Commonwealth;

(10) "Council" means the Kentucky Film Lea dership Council created in KRS 154.12 -

282;

(11) "Documentary" means a production based upon factual information and not

subjective interjections;

(12) "Eligible company" means any person that intends to film or produce a motion

picture or entertainment production in the Commonwealth;

(13) "Employee" has the same meaning as in KRS 141.010, and, for purposes of this

subchapter, also may include the employees or independent contractors of an

approved company or the employees of a loan -out entity engaged by an approved

company if they meet the requirements of KRS 141.310;

(14) "Employer-paid payroll taxes" means the tax paid by an approved company as an

employer under the Federal Insurance Contributions Act, 26 U.S.C. sec. 3101 et

seq., and the approved company 's share of contributions required under KRS

Chapter 341;

(15) "Feature-length film" means a live-action or animated production that is:

(a) More than thirty (30) minutes in length; and

(b) Produced for distribution in theaters or via digital format, including broadcast,

cable, and streaming;

(16) "Heritage county" means a county where the county population ranking determined

by the cabinet under KRS 154.21 -017 scores greater than or equal to ninety -seven

(97);

(17) "Industrial film" means a business -to-business film that may be viewed by the

public, including but not limited to videos used for training or for viewing at a trade

show;

(18) "Kentucky-based company" has the same meaning as in KRS 164.6011;

(19) "Loan-out entity" means a corporation, partnershi p, limited liability company, or

other entity through which an artist or other person is loaned out to perform services

for the approved company. A loan -out entity shall be registered and in good

standing with the Kentucky Secretary of State. Notwithstandi ng the business

organization, the loan-out entity and all employees of and other persons performing

services for the loan -out entity shall be subject to all applicable provisions of the

Kentucky personal income tax and any applicable payroll or other tax provisions;

(20) (a) "Motion picture or entertainment production" means:

1. The following if filmed in whole or in part, or produced in whole or in

part, in the Commonwealth:

a. A feature-length film;

b. A television program;

c. An industrial film;

d. A documentary;

e. A video game;

f. A music video; or

g. A commercial; or

2. A national touring production of a Broadway show produced in

Kentucky.

(b) "Motion picture or entertainment production" does not include the filming or

production of obscene material or television coverage of news or athletic

events;

(21) "Obscene" has the same meaning as in KRS 531.010;

(22) "Office" means the Kentucky Film Office created in KRS 154.12-280;

(23) "Payroll service fees" means administrative fees paid by an approved company to a

third-party payroll service company providing Kentucky -based payroll processing

for above-the-line and below-the-line production crew members;

(24) "Person" has the same meaning as in KRS 141.010;

(25) (a) "Qualifying expenditure" means expenditures made in the Commonwealth for

the following if directly used in or for a motion picture or entertainment

production:

1. The production script and synopsis;

2. Set construction and operations, wardrobe, accessories, and related

services;

3. Lease or rental of real property in Kentucky as a set location;

4. Photography, sound synchronization, lighting, and related services;

5. Editing and related services;

6. Rental of facilities and equipment;

7. Vehicle leases;

8. Food; and

9. Accommodations.

(b) "Qualifying expenditure" does not include:

1. Kentucky sales and use tax paid by the approved company on the

qualifying expenditure; or

2. Distribution expenses;

(26) "Qualifying payroll expenditure" means compensation paid to above -the-line crew

and below -the line crew while working on a motion picture or entertainment

production in the Commonwealth if the compensation is for services performed in

the Commonwealth;

(27) "Qualifying per diem":

(a) Means:

1. Meal and incidental allowance per diems, including those not taken on

set, in the amounts established by the United States General Services

Administration, if incurred in the Commonwealth; and

2. Hotel and other overnigh t living accommodations per diems, in the

amounts established by the United States General Services

Administration, if incurred in the Commonwealth; and

(b) Includes any amounts that:

1. Exceed the limits in paragraph (a)1. and 2. of this subsection; and

2. Are included in taxable compensation and subject to the withholding

required under KRS Chapter 341;

(28) "Resident" has the same meaning as in KRS 141.010;

(29) "Secretary" means the secretary of the Cabinet for Economic Development;

(30) "Tax incentive agreement" means the agreement entered into pursuant to KRS

154.61-030 between the council and the approved company;

(31) "Television program" means any live -action or animated production or

documentary, including but not limited to:

(a) An episodic series;

(b) A miniseries;

(c) A television movie; or

(d) A television pilot;

that is produced for distribution on television via broadcast, cable, or any digital

format, including but not limited to cable, satellite, internet, or mobile electronic

devices;

(32) "Union and guild benefits" means any mandatory contributions to pension, health,

and welfare plans paid by an approved company or a third -party payroll service

company pursuant to a union or guild agreement entered into for the provision of

services by above-the-line or below-the-line production crew members; and

(33) "Workers' compensation insurance premiums" means premiums paid by an

approved company or a third -party payroll service company for the provision of

workers' compensation covering above -the-line or below -the-line production crew

members.