1 Del. Admin. Code § 1501-4.0

Current through Reigster Vol. 28, No. 6, December 1, 2024

Section 1501-4.0 - Forms of Award and Financial Assistance

4.1 Grants. The Commission is empowered to make grants to applicants (a "Grant").

4.1.1 Grant proceeds may only be used to reimburse allowable project costs related to the promotion of the motion picture and television industry within the State of Delaware or which incentivize the entertainment industry in the creation of media projects and digital interactive entertainment in the State of Delaware.

4.1.2 Recapture Provision. The Commission shall determine, in its sole discretion, those circumstances in which a grantee must repay all or part of a grant ("recapture").

4.1.2.1 Recapture may occur in response to the following events:

4.1.2.1.1 Substantial or complete cessation of operations by the applicant before project completion;

4.1.2.1.2 Failure to reach employment or other benchmarks; or

4.1.2.1.3 Misuse or other improper application of grant proceeds.

4.1.2.2 The recapture obligation shall be consistent with the Fund purposes, and should consider the number of years necessary to realize the objectives of the grant consistent with applicable industry standards ("recapture period").

4.1.3 Post-Grant Period; Annual Reporting. The applicant shall, for a period equal to the recapture period of the grant, submit to the Commission, on an annual basis, detailed financial statements in a form acceptable to the Commission, a progress report on the status of the project, including, but not limited to, the number of permanent, quality, full-time jobs created or saved as a result of the project and the wage scale applicable to those jobs, any economic impact of the funding (such as sales, costs, etc.) within the State of Delaware and any other information required by the Commission. This reporting period may be extended or reduced, as deemed appropriate, by the Commission in its sole discretion.

4.1.4 Final Project Completion Mandatory. Final project completion shall be a mandatory condition precedent to any distribution from the Fund.

4.1.5 Final Project Completion Report Required. A grantee must adequately demonstrate final project completion by submitting a written final project completion report as more fully set forth in the required written agreement resulting from approval of an application.

4.1.6 In addition to the required provisions set forth above, grant agreements from the Entertainment Industry Fund may only be made pursuant to a written agreement containing at least the following additional core requirements:

4.1.6.1 Guidelines that identify allowable project costs;

4.1.6.2 A specific definition of final project completion; and

4.1.6.3 Terms and conditions which prevent fraud, waste, and abuse, including but not limited to terms and conditions which prevent self-dealing, the appearance of impropriety, or other potential conflicts of interest.

4.2 Equity Investment. The Commission is empowered to use the proceeds constituting the Entertainment Industry Fund to purchase common or preferred stock, membership units, or convertible debt from an applicant ("Equity Investment").

4.2.1 Proceeds of an equity investment can be used for, but are not limited to, financing expenses (such as equipment), working capital, or the construction of soundstage, storage, or office space which will be dedicated to the promotion of the motion picture and television industry within the State of Delaware or which incentivize the entertainment industry in the creation of media projects and digital interactive entertainment in the State of Delaware.

4.2.2 Post-Investment Period; Annual Reporting

4.2.2.1 The applicant shall, for a period equal to the Equity Investment, submit to the Commission, on an annual basis:

4.2.2.1.1 Detailed financial statements in a form acceptable to the Commission;

4.2.2.1.2 Progress report on the status of the project, including:

4.2.2.1.2.1 The number of permanent, quality, full-time jobs created or saved as a result of the project;

4.2.2.1.2.2 The wage scale applicable to those jobs;

4.2.2.1.2.3 Any economic impact of the funding (such as sales, costs, etc.) within the State of Delaware; and

4.2.2.1.2.4 Any other information required by the Commission.

4.2.2.1.3 The reporting period may be extended or reduced, as appropriate, by the Commission in its sole discretion.

4.2.3 Any dividends or royalties earned from Equity Investment shall be deposited into the Fund in order to make them available to further the statutory purposes of the Fund.

1 Del. Admin. Code § 1501-4.0

26 DE Reg. 1048 (6/1/2023) (final)