As used in this part:

1. (1) “Application for a rebate or a tax credit” means the document required by the Film Office, a division of the Arkansas Economic Development Commission to begin the process for obtaining a tax incentive under the Digital Product and Motion Picture Industry Development Act of 2009, Arkansas Code § 15-4-2001 et seq.;

2. (2)

   1. (A) "Below-the-line employees" means employees involved with a motion picture production, including but not limited to:

      1. (i) Casting assistants;
      2. (ii) Costume design;
      3. (iii) Gaffers;
      4. (iv) Grips;
      5. (v) Location managers;
      6. (vi) Production assistants;
      7. (vii) Set construction staff; and
      8. (viii) Set design staff.
   2. (B) "Below-the-line employees" does not include directors and producers;

3. (3) “Film” means a single media or multimedia production that is fixed on:

   1. (A) Film;
   2. (B) Digital medium;
   3. (C) Videotape;
   4. (D) Computer disc;
   5. (E) Laser disc; or
   6. (F) Similar delivery medium;

4. (4) “Film and digital product” means video images or other visual media entertainment content in digital format, film, or videotape, provided the program meets all the underlying criteria of a qualified production, including, but not limited to, the following:

   1. (A) Motion pictures;
   2. (B) Documentaries;
   3. (C) Long-form programs;
   4. (D) Specials;
   5. (E) Mini-series;
   6. (F) Series;
   7. (G) Music videos;
   8. (H) Television programming;
   9. (I) Interactive television;
   10. (J) Interactive games;
   11. (K) Video games;
   12. (L) Commercials;
   13. (M) Digital media for distribution or exhibition to the general public; or
   14. (N) Trailer, pilot, video teaser, or demo created primarily to stimulate the sale, marketing, promotion, or exploitation of future investment;
5. (5) "Film Office" means the division of the Arkansas Economic Development Commission charged with the responsibility of promoting and assisting the digital content industry in Arkansas in order to enhance Arkansas as a land of opportunity for digital and motion picture filmmaking;
6. (6) “Film production company” means a corporation, individual, limited liability company, or partnership that produces one (1) or more films or any part of a film;
7. (7) “Financial institution" means any bank or savings and loan in the state that carries Federal Deposit Insurance Corporation insurance;

8. (8)

   1. (A) "Highly compensated individual" means an individual who directly or indirectly receives compensation in excess of five hundred thousand dollars ($500,000) for personal services with respect to a single production.
   2. (B) An individual receives compensation indirectly when a production company pays a personal service company or an employee-leasing company that pays the individual;

9. (9) “Interactive television” means a television production in which the viewer’s action or actions may:

   1. (A) Affect the program being watched; or
   2. (B) Affect the outcome of the production;

10. (10) “Multiproject production” means two (2) or more qualified digital production projects by the same director or producer that have:

    1. (A) Signed two (2) or more financial incentive agreements for production projects in Arkansas within a twelve-month period; and
    2. (B) Commenced principal photography or post-production within a twelve-month period;

11. (11)

    1. (A) “Post-production” means a final stage in the production of film or digital content occurring after the action has been filmed or videotaped, including but not limited to:

       1. (i) Dialogue replacement;
       2. (ii) Sound editing;
       3. (iii) Addition or deletion of special effects;
       4. (iv) Editing music;
       5. (v) Beginning and end credits;
       6. (vi) Negative cutting;
       7. (vii) Soundtrack production;
       8. (viii) Dubbing;
       9. (ix) Subtitling; or
       10. (x) Addition or deletion of sound or visual effects.

    2. (B) “Post-production” does not include expenditures for:

       1. (i) Advertising;
       2. (ii) Marketing; or
       3. (iii) Distribution;
12. (12) “Post-production costs” means all expenditures incurred in the state associated with the post-production phase of a state-certified production within the state;

13. (13)

    1. (A) "Production" means the process of producing a type of entertainment content and includes film and digital content product.

    2. (B) "Production" shall not include:

       1. (i) News reports;
       2. (ii) Weather reports;
       3. (iii) Current events;
       4. (iv) Sporting events;
       5. (v) Fundraising events;
       6. (vi) Gala events;
       7. (vii) Marketing a product or service;
       8. (viii) Corporate training;
       9. (ix) Corporate advertising;
       10. (x) Nonscripted reality show;
       11. (xi) Productions containing any material or performance that is obscene; or
       12. (xii) Sexually explicit productions as defined in 18 U.S.C. § 2257, as it existed on January 1, 2009;

14. (14) "Production company" means a corporation, partnership, limited liability company, or other business entity:

    1. (A) Engaged in the business of producing qualified productions; and
    2. (B) Registered with the Secretary of State to engage in business in Arkansas;

15. (15)

    1. (A) "Qualified production costs" means costs associated with the development, preproduction, production, or post-production of a qualified production within the state, including but not limited to:

       1. (i) Per diem expenditures by the cast or crew for meals and lodging when accompanied by receipts, signed by the production company and the cast or crew member, evidencing payment of the per diem;
       2. (ii) Costs associated with original music compositions produced by an Arkansas resident to be used as incidental music, the score, or the soundtrack in film or video games;
       3. (iii) Arkansas residents for labor, wages, fees, talent, or management;
       4. (iv) Arkansas businesses for personal services;
       5. (v) The story and scenario used in the production;
       6. (vi) Set construction;
       7. (vii) Set operations;
       8. (viii) Wardrobe and accessory services;
       9. (ix) Photography;
       10. (x) Sound;
       11. (xi) Lighting;
       12. (xii) Editing-related services;
       13. (xiii) Rentals of equipment and facilities;
       14. (xiv) Leasing of motor vehicles;
       15. (xv) Chartering of aircraft through Arkansas-based businesses for in-state transportation attributed to the production;
       16. (xvi) Commercial airfare purchased for travel to and from Arkansas attributed to the production;

       17. (xvii) Insurance and bonding costs; (xviii) Costs to option or purchase intellectual property, including without limitation books, scripts, music, or trademarks relating to the development or purchase of a script, screenplay, or format if:

           1. (a) (a) The intellectual property was produced primarily in Arkansas or the creator of the intellectual property is a resident of Arkansas;
           2. (b) (b) At least seventy-five percent (75%) of the subsequent film or digital content is produced in Arkansas; and
       18. (c)
16. (1) (c)(1) The production expenses or costs for the optioning or purchase are less than twenty-five percent (25%) of the production expenses or costs incurred in Arkansas.

17. (2) (2) The expenses or costs include all expenditures associated with the optioning or purchase of intellectual property, including option money, agent fees, and attorney fees relating to the transaction, but do not include deferrals, deferments, royalties, profit participation, or recourse or nonrecourse loans that the eligible production company may negotiate in order to obtain the rights to the intellectual property;

    1. (xix) Other costs of the production in accordance with generally accepted entertainment industry practices;

       1. (xx) Fringe contributions being paid for work performed in Arkansas, including:

          1. (a) (a) Health benefits;
          2. (b) (b) Pension contributions;
       2. (c) (c) Welfare contributions;

       3. (d) (d) Stipends; and

          1. (e) (e) Living allowances; and

       4. (xxi)

          1. (a) (a) Food catering services.
          2. (b) (b) When a production company hires a food catering service company that is located outside the state, payments otherwise allowable that are made by the out-of-state food catering service to food businesses located in Arkansas shall be allowed as eligible expenditures.

    2. (B) "Qualified production costs" does not include:

       1. (i) The optioning or purchase of intellectual property that is not used in the production project;
       2. (ii) Media buys, promotional events, or gifts or public relations associated with the promotion or marketing of any qualified production;

       3. (iii) Deferred, leveraged, or profit participation costs relating to any and all personnel associated with any and all aspects of the production, including without limitation:

          1. (a) (a) Producer fees;
          2. (b) (b) Director fees;
       4. (c) (c) Talent fees; and
       5. (d) (d) Writer fees;
       6. (iv) Amounts paid to persons or businesses as a result of their participation in profits from the exploitation of the qualified production; and
       7. (v) Payments for penalties or fines, payments to nonprofit organizations, and payments to federal and state entities that do not pay state taxes;

18. (16) "Resident" means natural persons and includes, for the purpose of determining eligibility for the rebate incentive provided by this program, a person:

    1. (A) Domiciled in Arkansas;
    2. (B) Who maintains a permanent residence within the state; and
    3. (C) Who spends at least six (6) months of the taxable year within the state;
19. (17) “Season” means production of at least six (6) episodes of a television series;

20. (18) "State-certified production" means a qualified production produced by an eligible production company that is:

    1. (A) In compliance with the established rules of the Digital Content and Motion Picture Industry Development Act of 2009, Arkansas Code § 15-4-2001 et seq.;
    2. (B) Authorized by the Film Office of the Arkansas Economic Development Commission to conduct business in this state; and
    3. (C) Approved by the Director of the Arkansas Economic Development Commission as qualifying for a discretionary production tax incentive under this part;

21. (19) “Tax incentive” means a:

    1. (A) Rebate under Arkansas Code § 15-4-2008; or
    2. (B) Tax credit under Arkansas Code § 15-4-2012;
22. (20) “Television mini-series” means a limited run program of more than three (3) hours of programming or half-season block associated with serial or series programming;
23. (21) “Television programming” means a long-form or short-form narrative production of a television series, television mini-series, or television special that is intended for commercial broadcast;
24. (22) “Television series” means at least six (6) hours of television programming exhibited by a television station or network;
25. (23) “Television specials” means major dramatized presentations broadcast during times normally occupied by episodes of one (1) or more weekly television series;

26. (24) “Veteran” means an individual who:

    1. (A) Was honorably discharged from a tour of active duty, other than active duty for training only, with the United States Armed Forces; or
    2. (B) Has served honorably in the National Guard or reserve forces of the United States Armed Forces for at least six (6) years, regardless of whether the individual has been discharged; and

27. (25) “Veteran-owned small business” means a business:

    1. (A) With profits of less than one million dollars ($1,000,000);
    2. (B) In which at least one (1) veteran owns more than fifty percent (50%) of the business; and
    3. (C) That has its principal place of business or its headquarters in Arkansas.