Film Production Services Tax Credit Annual Report FY2017 July 1, 2016 – June 30, 2017

When a production company is ready to claim their credit, they engage an Illinois licensed independent Certified Public Accountant who submits a report attesting to the qualified expenses including exact numbers of Illinois residents hired, and vendors used. However, the Film Tax Credit rule provides qualified productions up to two years from the completion of the project to claim a tax credit. Therefore, the figures reported may be for projects dating back to 2012.

Beginning in FY2015 Q1, reporting methodology was changed from using spending estimates provided upon application to actual expenditures reported when the credit is claimed. However, we continue to report estimates for performance metrics. Estimates, while less precise, are timelier. Furthermore, projects awarded tax credits during this period may have been previously counted using the prior methodology.

Amount of film production spending in Illinois and number of job hires: Production Credits TOTAL Qualified Qualified IL Qualified IL Crew Talent Hires** FY17 Actual Office issued Expenses* Wages* Vendor Expenses* Hires** *** Hires** Commercial 183 46,919,486.91 24,743,109.61 21,869,359.05 717 6,115 607 TV 100 128,375,668.06 76,959,229.73 51,386,683.35 732 2,508 794 Film 14 17,666,792.58 10,180,795.93 7,485,996.65 55 1,249 140 TOTAL 297 $ 192,961,947.55 $ 111,883,135.27 $ 80,742,039.05 1,504 9,872 1,541

*Actual expenditures reported are measured from the date of issuance of the tax credit. Costs may have been incurred/paid in prior periods.

** Job hires represent a count of Illinois residents hired on productions and do not reflect unique individuals. Some residents may have worked on more than one project.

*** There were 5,581 “Extras” reported on these projects; however they are not included in Talent Job Hires for the sake of conservatism.

Types of vendors hired, depending on production needs, include but are not limited to caterers, janitorial service companies, security companies, lumber yards, hardware stores, fabric stores, clothing companies, grocery stores, gasoline stations, hotels, restaurants, parking garages, office rentals, stage rentals, computer rentals, insurance companies and legal services. • We are unable to track vendor related jobs. Any given project will use hundreds of vendors and we do not track how many employees of a particular vendor work on each project. • In the 2017 Legislative Session, the General Assembly, in coordination with the Department, introduced House Amendment #1 to SB 1461 (Holmes/Kifowit/Turner), which seeks to help the Department comply with the statutory mandate that requires the Department to report the number of minority-owned vendor firms contracting with qualified Film Tax Credit recipients. Specifically, the legislation sets reasonable thresholds on vendor reporting. Additionally, it seeks to resolve the conflicts between the statutory reporting provisions that the Department make public proprietary and confidential information regarding vendor costs utilized by productions and prohibition of

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such information from disclosure within the same Act. As amended by House Amendment #1, SB 1461 passed both Chambers, but was not concurred upon by the Senate. The Department plans to work with the General Assembly to introduce similar legislation in 2018 Legislative Session. The attached report listing vendors utilized by the tax credit recipients aligns with the proposed statutory changes described above, whereby the report lists vendors paid at least $10,000 or 10% of the accredited production’s spending, whichever is less.

Whether or not the human infrastructure reflects diversity of the state of Illinois:

• The film tax credit statute contains a diversity reporting requirement which means that no production will receive the tax credit without proof of a best faith effort to hire women and