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§ 5532. Studio Construction Project Certification -- Phase A.

10 CA ADC § 5532Barclays Official California Code of RegulationsEffective: February 8, 2024

Barclays California Code of Regulations
Title 10. Investment
Chapter 7.75. California Film Commission
Article 4. California Soundstage Filming Tax Credit Program
Effective: February 8, 2024
10 CCR § 5532
§ 5532. Studio Construction Project Certification -- Phase A.
(a) For Phase A, the application shall include the information set forth below:
(1) Section 1: Applicant information.
(A) Applicant entity and taxpayer ID number.
(B) Identify if the applicant is a corporation, limited liability company, individual proprietorship, subchapter S corporation, partnership, or other.
(2) Section 2: Contact information.
(A) Enter the contact type and provide the contact name, title, address, email and phone for each of the following, as applicable: applicant contact, primary contact, production company contact, parent company contact, and contact information for the Certified Public Accountant (CPA) firm which will provide the required report for the soundstage(s).
(3) Section 3: Applicant eligibility attestation.
(A) The applicant must attest that it has not received a California Competes Grant under section 12096.6 of the Government Code for wages or investment related to construction of the studio construction project.
(4) Section 4: Studio construction project certification.
(A) To enable the CFC to certify that a studio construction project met the requirements of sections 17053.98(k), 23698(k), and 17053.99 of the Revenue and Taxation Code, the applicant must provide a third-party Certified Studio Construction Project Verification Report performed by a CPA firm, which meets the requirements specified in subdivision (a)(4)(B) of this section, documenting compliance with the requirements of the California Soundstage Filming Tax Credit Program.
1. A studio construction project may include the construction or renovation of more than one soundstage located in the state. Applicants may provide separate reports for each soundstage construction or renovation project or a comprehensive report for all soundstage construction or renovation projects that make up each studio construction project. Regardless of whether the applicant submits one or multiple reports for the soundstage construction or renovation projects, the comprehensive studio construction project must, in aggregate, meet the definition and criteria in Revenue and Taxation Code sections 17053.98(k)(2)(A) and 23698(k)(2)(A) to be eligible as a certified studio construction project.
2. The public accounting firm performing the Certified Studio Construction Project Verification Report may, but is not required to, use the optional California Soundstage Filming Tax Credit Program Phase A Agreed Upon Procedures, Phase A AUP (August 12, 2022), hereby incorporated by reference.
(B) The public accounting firm performing the Certified Studio Construction Project Verification Report for an applicant shall provide documentation that a peer review was administered by the American Institute of Certified Public Accountants (“AICPA”) National Peer Review Committee (“NPRC”) within the last three years and that the peer review resulted in a rating of “Pass.” This documentation shall include the firm's most recent peer review report and the acceptance of that report by the NPRC.
(C) The public accounting firm performing the Certified Studio Construction Project Verification Report for an applicant may also perform the annual soundstage workforce certification required pursuant to section 5538 for that applicant. However, the same public accounting firm is not permitted to perform the report based on the California Soundstage Filming Tax Credit Program Agreed Upon Procedures, Soundstage AUP, (August 28, 2023), hereby incorporated by reference, required pursuant to section 5540 for a Phase B applicant filming on a soundstage or soundstages approved as part of a certified studio construction project for which the public accounting firm is providing or has provided services related to Phase A.
(5) Section 5: Supporting documentation.
(A) Project labor agreement, if applicable.
(B) A description of the studio construction project for which certification is sought, including a map with each soundstage identified by name or number as well as identification of any ancillary buildings.
(C) Copies of any and all foundation permits or structural building permits for the studio construction project, including the dates they were issued.
(b) Within thirty (30) business days of receipt of the completed application and all supporting documents required pursuant to subdivision (a) above, the Director of the CFC, or their designee, will notify the applicant whether its Phase A submission is approved or rejected. An eligible applicant fulfilling all Phase A application requirements and applying within the permitted timeframe specified in subdivisions (b) and (c) of section 5539 of this article will be approved. Upon approval, the CFC will issue the applicant an SCL, Form SCL (August 12, 2022), hereby incorporated by reference, for each certified soundstage and ancillary building or group of buildings. The SCL will include a unique identifier for every soundstage certified as part of the applicant's certified studio construction project. Upon issuance of an SCL, the producer of a qualified motion picture may submit a Phase B application. If rejected for application deficiencies that may be remedied, a Phase A applicant may remedy any deficiencies noted by the CFC in its submission and re-apply. The date of receipt of additional information to remedy any deficiencies will be considered the new submission date of the Phase A application. If the applicant is rejected due to noncompliance with statutory or regulatory requirements, the applicant may not reapply for the same studio construction project.
(c) Pursuant to sections 17053.98(k)(2)(A) and 23698(k)(2)(A) of the Revenue and Taxation Code, the period of certification for a soundstage or soundstages that are part of a certified studio construction project shall be five (5) years.
(1) A once certified soundstage for which the period of certification has expired may still be utilized by a project applying for an allocation of credits under the California Film and Television Tax Credit Program 3.0 or its successor programs pursuant to and in accordance with sections 17053.98(k)(8)(D) and 23698(k)(8)(D) of the Revenue and Taxation Code and as outlined in subdivision (h) of section 5539 of this article.
(2) A Phase A applicant may apply for an extension of the period of certification for a soundstage that is part of its certified studio construction project by submitting a written request to the CFC to pause the period of certification due to a Force Majeure event, as defined in subdivision (i) of section 5520 of this chapter.
(A) A Force Majeure extension request substantiated in accordance with subparagraph (B) below may be granted for either:
1. An indirect cause, which is a cause that prevents a qualified motion picture project intending to utilize the soundstage and applying for an allocation of credits under the California Soundstage Filming Tax Credit Program from moving forward with its planned application and use of the soundstage, such as, but not limited to, delays caused by breach by the motion picture director or a principal cast member or a labor disruption; or,
2. A direct cause, which is a cause that prevents the use of the soundstage by any entity for any film and television production purpose, such as, but not limited to, damage caused by fire, flood, earthquake, storm, hurricane, or other natural disaster.
(B) The CFC will review the written request to pause the period of certification and any supporting documentation and grant the request if the applicant provides evidence of a Force Majeure disruption in accordance with paragraph (2) above or deny the request if the applicant fails to provide evidence of a Force Majeure disruption in accordance with paragraph (2) above.
1. For purposes of this subdivision, to “pause the period of certification” means to tally the time during which a Force Majeure disruption impacting a soundstage with an approved request is in effect and extend the original period of certification by that amount of time.
(i) A Force Majeure extension request that has been granted for an indirect cause, as defined in clause 1. of subparagraph (A) above, will be in effect from the date of approval until the end-date of the Force Majeure disruption, or until the date the soundstage is in use, whichever comes first. The Phase A applicant must notify the CFC whenever a certified soundstage that was granted a Force Majeure extension for indirect cause is in use.
(ii) A Force Majeure extension request that has been granted for a direct cause, as defined in clause 2. of subparagraph (A) above, will be in effect from the date of approval until the soundstage is considered safe for use by the applicant. The Phase A applicant must notify the CFC whenever a certified soundstage that was granted a Force Majeure extension for direct cause is safe for use, whether it is in use or not.

Credits

Note: Authority cited: Sections 17053.98(k)(10) and 23698(k)(10), Revenue and Taxation Code; and Section 11152, Government Code. Reference: Sections 17053.98(k)(1), 17053.98(k)(2), 17053.98(k)(10), 17053.98(k)(12), 17053.99, 23698(k)(1), 23698(k)(2), 23698(k)(10) and 23698(k)(12), Revenue and Taxation Code; and Sections 12096.6 and 14998.1, Government Code.
History
1. New section filed 4-11-2022 as an emergency; operative 4-11-2022 (Register 2022, No. 15). A Certificate of Compliance must be transmitted to OAL by 10-10-2022 or emergency language will be repealed by operation of law on the following day.
2. New section refiled with amendments to section and Note 10-3-2022 as an emergency; operative 10-11-2022 (Register 2022, No. 40). A Certificate of Compliance must be transmitted to OAL by 1-9-2023 or emergency language will be repealed by operation of law on the following day.
3. Refiling of 10-3-2022 emergency on 1-9-2023; operative 1-10-2023 (Register 2023, No. 2). A Certificate of Compliance must be transmitted to OAL by 4-10-2023 or emergency language will be repealed by operation of law on the following day.
4. Certificate of Compliance as to 10-3-2022 order, including amendment of subsection (b) and Note, transmitted to OAL 1-3-2023 and filed 2-15-2023; amendments effective 2-15-2023 pursuant to Government Code section 11343.4(b)(3) (Register 2023, No. 7).
5. Amendment of subsection (a)(4)(C) and new subsection (c)-(c)(2)(B)1.(ii) filed 8-18-2023 as an emergency; operative 8-18-2023 (Register 2023, No. 33). A Certificate of Compliance must be transmitted to OAL by 2-14-2024 or emergency language will be repealed by operation of law on the following day.
6. Certificate of Compliance as to 8-18-2023 order, including amendment of subsections (a)(4)(C), (b), (c)(2) and (c)(2)(B)1.(ii) transmitted to OAL 12-26-2024 and filed 2-8-2024; amendments effective 2-8-2024 pursuant to Government Code section 11343.4(b)(3) (Register 2024, No. 6).
This database is current through 4/5/24 Register 2024, No. 14.
Cal. Admin. Code tit. 10, § 5532, 10 CA ADC § 5532
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