Okla. Admin. Code § 150:150-1-3

Current through Vol. 42, No. 7, December 16, 2024

Section 150:150-1-3 - Program criteria and qualification

(a) Applying for rebate eligibility:

(1) Applications and all necessary forms may be submitted to OFMO through the OFMO website or as otherwise specified by OFMO.

(2) Unless otherwise authorized by OFMO, Eligibility Applications submitted for projects filmed inside the State pursuant to 68 O.S. §3635 may be submitted no earlier than one (1) year prior to the start of Principal Photography but no later than forty-five (45) days prior to the start of Principal Photography. The exact specifications of the Eligibility Application are shown on the OFMO website, and include but are not limited to:

(A) General information about the Production;

(B) Contact information;

(C) Preliminary production milestone dates;

(D) A copy of the screenplay (or treatment if appropriate);

(E) The Production Budget top sheet and estimated headcount;

(F) Various acknowledgements of program and OFMO criteria and agreements to abide by them;

(3) Unless otherwise authorized by OFMO, Eligibility Applications for post-production activity on a Project filmed outside of this state pursuant to 68 O.S. §3636 may be submitted no earlier than one (1) year prior to the occurrence of the post-production activity occurring in Oklahoma but no later than fourteen (14) days prior to the occurrence of the post-production activity occurring in Oklahoma. The exact specifications of this Eligibility Application are shown on the OFMO website, and include but are not limited to:

(A) The post-production budget or budget top sheet including post-production services and

(B) Proof of funding for the post-production services.

(4) Applicants may track the status of their Eligibility Application on the OFMO website.

(5) Application does not guarantee acceptance. OFMO considers each Eligibility Application individually based upon many factors, including compliance with these Rules, the Act, the benefits of the project to Oklahoma (such as economic impact, jobs, tourism, branding, image and follow-on work), funds available, anticipated future Program needs, and other projects applying for a rebate.

(6) If the Eligibility Application is approved, the Production Company will be Conditionally Pre-Qualified and OFMO will work with the Production to establish a Rebate Schedule.

(7) Conditional Pre-Qualification does not guarantee ultimate approval of a Rebate Claim. The Rebate Claim is not deemed to be approved until after the Final Application is approved.

(8) If the Eligibility Application is denied, OFMO may provide the applicant with the reason(s) it was denied.

(9) Only one Eligibility Application per fiscal year per Production may be accepted.

(10) OFMO may provide the Oklahoma Tax Commission with quarterly reports containing information concerning the Conditional Pre-Qualification of Applications and approved Rebate Claims.

(b) Application Estimate. If the Eligibility Application is approved, the Application Estimate will be multiplied by the rebate percentage deemed appropriate by the Department. The resultant amount is the amount that may later be paid as the Rebate Claim (the "Potential Rebate Claim"

(c) If the Final Application and Rebate Claim are later approved:

(1) If the QPE are less than or equal to the application Estimate, the Rebate claim may be paid in full up to the Potential Rebate Claim amount. Any amount of the Potential Rebate Claim that has been Pre-Qualified but is less than the actual Rebate Claim may be deemed not Pre-Qualified and will not count toward the limitations set forth in 68 O.S. §3634.

(2) If the actual QPE are more than the Application Estimate, the amount that may be paid on the Rebate Claim is limited to the Potential Rebate Claim Amount. QPE that exceed the Potential Rebate Claim Amount are considered an additional claim and may, at OFMO's discretion, be approved for payment. If the additional claim is approved, the additional amount agreed to be paid counts toward the Conditional Pre-Qualification limits set forth in 68 O.S. §3634 of the then current fiscal year.

(d) Rebate Schedule. For Projects filmed in this State pursuant to 68 O.S. §3635, unless otherwise agreed by OFMO in writing, after Conditional Pre-Qualification, OFMO and the Production Company will establish a schedule of dates based upon the following benchmarks:

(1) 45 calendar days prior to Principal Photography- submit Application Estimate and Proof of Funding for at least fifty percent (50%) of the Production budget unless otherwise agreed upon beforehand by OFMO.

(2) Prior to paying salaries or wages to a Production Company's employee in Oklahoma- submit a certificate of workers' compensation insurance with limits pursuant to Oklahoma Law.

(3) 30 calendar days prior to Principal Photography - submit the following:

(A) Proof of funding for the Production Budget;

(B) Updated filming schedule;

(C) Updated screenplay (or treatment if appropriate);

(D) Copy of the completion bond as described in "(e)" Below, if applicable;

(E) Additional documents as reasonably requested by OFMO.

(4) 10 calendar days prior to Principal Photography:

(A) Submit a certificate of general liability insurance with a minimum limit of $1,000,000 in coverage (or a binder for such with a state date no later than the estimated Start of Pre-Production).

(B) Submit a certificate of automobile liability insurance with minimums of $250,000/500,000/250,000 coverage (or a binder for such with a state date no later than the estimated Start of Pre-Production) or certification that no employee of the Production will drive an automobile as part of the Production.

(5) During Principal Photography - submit the following (preferably in advance, if practical):

(A) Updates to the filming schedule;

(B) Updates to the screenplay (or treatment if appropriate);

(C) Call Sheets.

(6) Within 90 calendar days of completion of the Production (or payment date of last QPE, if later):

(A) Upload through the OFMO website the list of Oklahoma Crew, Oklahoma Expatriates and Oklahoma Vendors used on the Production;

(B) Submit the Final Application.

(e) Completion Bond. Unless a Production is backed by a major studio or other financing source acceptable to OFMO, the Production will post a Completion Bond from a guarantor acceptable to OFMO guaranteeing completion of the Production and payment of all Oklahoma liabilities. In lieu of a Completion Bond, a Production may produce evidence acceptable to OFMO that all Crew, vendors and taxes have been paid and there are no outstanding or potential liens in Oklahoma against the Production Company.

(f) End of Production credits:

(1) The end credit crawl of all release prints of a Film filmed in Oklahoma will include "filmed in Oklahoma using the Filmed in Oklahoma Act" and a logo provided by OFMO.

(2) The end credit crawl for all release prints of a Film for Projects filmed outside of this state pursuant to 68 O.S. §3636 will include "postproduction activity for the film was conducted in Oklahoma using the Filmed in Oklahoma Act" and a logo provided by OFMO.

(3) If the production does not contain end credits, the production company will provide equivalent value as determined by OFMO prior to payment of the Rebate Claim. If the production does not intend to use end credits, this should be disclosed to OFMO prior to Conditional Pre-Qualification of the project.

(g) Certified Public Accountant's Report: Final Applications for both Projects filmed in this state and for Projects filmed outside of this state pursuant to 68 O.S. §3636 will be accompanied by a CPA's Report, prepared at the expense of the Applicant, attesting that the amounts in the Final Application are QPE that comply with these rules.

(1) Reports will be prepared by a CPA currently licensed by the State of Oklahoma and who is independent under the American Institute of certified Public Accountants' (AICPA) Independence Rule.

(2) CPAs will carry professional liability insurance, in a form and from a carrier acceptable to OFMO, for at least $500,000.

(3) The CPA's examination will be conducted according to the AICPA's Attestation Standards.

(4) Reports will use a materiality threshold set by OFMO and published on its website.

(5) CPAs will work with the Production Company to resolve exceptions or discrepancies prior to submitting the Final Application, such that the CPA's Report attests to the validity and accuracy of the amounts on the Application without exception.

(6) The CPA's Report will attest:

(A) Actual Production expenditures were at least $50,000 and QPE at least $25,000.

(B) All amounts on the Application are properly calculated and materially accurate.

(C) All Oklahoma payroll tax returns due from the Production Company (or its payroll processor) have been filed.

(D) All Oklahoma income tax returns for the Production Company due as of the review date have been filed.

(7) The CPA will retain all workpapers for the CPA's Report for seven years, during which they may be subject to audit by OFMO or its agents, upon a request by OFMO.

(h) Final Application:

(1) Upon completion of the Production and mandates herein, the Production Company may submit a Final Application.

(2) Submitting a Final Application does not guarantee approval. OFMO may approve or disapprove of all claims within 60 calendar days of receipt of a properly completed Final Application.

(3) If a Final Application or Rebate Claim is denied, the Production Company may attempt to correct any discrepancies or problems and resubmit within thirty (30) days of denial.

(4) Once a Final Application is approved by OFMO,

(A) Amendments are not allowed;

(B) The Production Company will work with OFMO to establish a vendor ID with the State.

(5) The Oklahoma Tax Commission will, upon notification of approval from the OFMO, issue payment for all approved Rebate Claims, subject to any statutory limitations and any other written agreements between the Production Company and the Department.

(i) Delays, Transferability and Expiration:

(1) A Conditionally Pre-Qualified Production may delay the start of Principal Photography two times for a total delay of up to ninety (90) days from the date when principal photography was originally scheduled to begin, unless other extensions are granted in writing by OFMO for good cause. If the start is delayed a third time, or a Production does not start by the date specified in their latest update to the Production Schedule submitted to OFMO, Pre-Qualification is revoked, the Eligibility Application is denied and the Production cannot apply again until the following fiscal year.

(2) Conditional Pre-Qualification is specific to the Production and Production Company and is non-transferable. Productions, screenplays and budgets may evolve as long as they are substantially similar to those submitted in the Eligibility Application.

(3) Unless otherwise approved by OFMO in writing, Conditional Pre-Qualification expires:

(A) If the letter offering Conditional Pre-Qualification is not signed and returned to OFMO within seven (7) business days of receiving it; or

(B) Two (2) years from the start of Principal Photography.

(4) If Conditional Pre-Qualification expires or is revoked, the Potential Rebate Claim amount from the revoked or expired Conditional Pre-Qualification does not count toward the Conditional Pre-Qualification cap set forth in 68 O.S. §3634.

Okla. Admin. Code § 150:150-1-3

Adopted by Oklahoma Register, Volume 39, Issue 24, September 1, 2022, eff. 9/11/2022