A10083 Summary:
BILL NO | A10083B |
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SAME AS | SAME AS S07485-B |
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SPONSOR | Lentol |
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COSPNSR | |
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MLTSPNSR | |
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Add §§43 & 44, amd §§210-B & 606, Tax L; rpld §352 sub 11, amd §§353 & 352, add §243, Ec Dev L | |
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Establishes the empire state music production credit and the empire state digital gaming media production credit; defines terms. |
A10083 Actions:
BILL NO | A10083B | |||||||||||||||||||||||||||||||||||||||||||||||||
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05/10/2016 | referred to ways and means | |||||||||||||||||||||||||||||||||||||||||||||||||
05/27/2016 | amend and recommit to ways and means | |||||||||||||||||||||||||||||||||||||||||||||||||
05/27/2016 | print number 10083a | |||||||||||||||||||||||||||||||||||||||||||||||||
06/08/2016 | reported referred to rules | |||||||||||||||||||||||||||||||||||||||||||||||||
06/13/2016 | amend (t) and recommit to rules | |||||||||||||||||||||||||||||||||||||||||||||||||
06/13/2016 | print number 10083b | |||||||||||||||||||||||||||||||||||||||||||||||||
06/14/2016 | reported | |||||||||||||||||||||||||||||||||||||||||||||||||
06/14/2016 | rules report cal.303 | |||||||||||||||||||||||||||||||||||||||||||||||||
06/14/2016 | ordered to third reading rules cal.303 | |||||||||||||||||||||||||||||||||||||||||||||||||
06/16/2016 | passed assembly | |||||||||||||||||||||||||||||||||||||||||||||||||
06/16/2016 | delivered to senate | |||||||||||||||||||||||||||||||||||||||||||||||||
06/16/2016 | REFERRED TO RULES | |||||||||||||||||||||||||||||||||||||||||||||||||
06/16/2016 | SUBSTITUTED FOR S7485B | |||||||||||||||||||||||||||||||||||||||||||||||||
06/16/2016 | 3RD READING CAL.1871 | |||||||||||||||||||||||||||||||||||||||||||||||||
06/16/2016 | PASSED SENATE | |||||||||||||||||||||||||||||||||||||||||||||||||
06/16/2016 | RETURNED TO ASSEMBLY | |||||||||||||||||||||||||||||||||||||||||||||||||
11/16/2016 | delivered to governor | |||||||||||||||||||||||||||||||||||||||||||||||||
11/28/2016 | vetoed memo.255 | |||||||||||||||||||||||||||||||||||||||||||||||||
11/28/2016 | tabled |
A10083 Committee Votes:
Farrell | Aye | Oaks | Nay | ||||||
Lentol | Aye | Crouch | Nay | ||||||
Schimminger | Aye | Barclay | Nay | ||||||
Gantt | Aye | Fitzpatrick | Nay | ||||||
Weinstein | Aye | Saladino | Aye | ||||||
Glick | Aye | Hawley | Nay | ||||||
Nolan | Excused | Duprey | Excused | ||||||
Pretlow | Aye | Corwin | Nay | ||||||
Perry | Aye | Malliotakis | Nay | ||||||
Colton | Aye | Walter | Nay | ||||||
Cook | Aye | ||||||||
Cahill | Aye | ||||||||
Aubry | Aye | ||||||||
Hooper | Aye | ||||||||
Thiele | Aye | ||||||||
Wright | Aye | ||||||||
Cusick | Aye | ||||||||
Ortiz | Aye | ||||||||
Benedetto | Aye | ||||||||
Markey | Aye | ||||||||
Moya | Aye | ||||||||
Weprin | Aye | ||||||||
Rodriguez | Aye | ||||||||
Ramos | Excused | ||||||||
Braunstein | Aye | ||||||||
Heastie | Aye | Kolb | Aye | ||||||
Gottfried | Aye | Tedisco | Aye | ||||||
Lentol | Aye | Oaks | Aye | ||||||
Farrell | Aye | Butler | Aye | ||||||
Gantt | Aye | Crouch | Aye | ||||||
Nolan | Aye | Finch | Excused | ||||||
Weinstein | Aye | Barclay | Aye | ||||||
Hooper | Aye | Raia | Aye | ||||||
Ortiz | Aye | Duprey | Aye | ||||||
Pretlow | Aye | ||||||||
Cook | Aye | ||||||||
Glick | Aye | ||||||||
Morelle | Aye | ||||||||
Aubry | Aye | ||||||||
Englebright | Aye | ||||||||
Wright | Excused | ||||||||
Dinowitz | Excused | ||||||||
Colton | Aye | ||||||||
Magnarelli | Aye | ||||||||
Perry | Aye | ||||||||
Markey | Aye | ||||||||
Go to top
A10083 Floor Votes:
Yes
Abbate
Yes
Crespo
Yes
Gottfried
Yes
Lopez
Yes
Palumbo
Yes
Simon
Yes
Abinanti
No
Crouch
No
Graf
Yes
Lupardo
Yes
Paulin
Yes
Simotas
Yes
Arroyo
Yes
Curran
Yes
Gunther
Yes
Lupinacci
Yes
Peoples-Stokes
Yes
Skartados
Yes
Aubry
Yes
Cusick
Yes
Harris
Yes
Magee
Yes
Perry
No
Skoufis
No
Barclay
Yes
Cymbrowitz
No
Hawley
Yes
Magnarelli
Yes
Pichardo
Yes
Solages
Yes
Barrett
Yes
Davila
Yes
Hevesi
No
Malliotakis
Yes
Pretlow
Yes
Stec
Yes
Barron
Yes
DenDekker
Yes
Hikind
Yes
Markey
Yes
Quart
Yes
Steck
Yes
Benedetto
Yes
Dilan
Yes
Hooper
Yes
Mayer
No
Ra
Yes
Stirpe
Yes
Bichotte
Yes
Dinowitz
Yes
Hunter
Yes
McDonald
Yes
Raia
Yes
Tedisco
Yes
Blake
ER
DiPietro
Yes
Hyndman
Yes
McDonough
Yes
Ramos
No
Tenney
No
Blankenbush
Yes
Duprey
Yes
Jaffee
Yes
McKevitt
Yes
Richardson
Yes
Thiele
Yes
Brabenec
Yes
Englebright
Yes
Jean-Pierre
No
McLaughlin
Yes
Rivera
Yes
Titone
Yes
Braunstein
Yes
Fahy
Yes
Johns
Yes
Miller
Yes
Robinson
Yes
Titus
ER
Brennan
Yes
Farrell
Yes
Joyner
No
Montesano
Yes
Rodriguez
Yes
Walker
Yes
Brindisi
ER
Finch
ER
Katz
Yes
Morelle
Yes
Rosenthal
No
Walter
Yes
Bronson
No
Fitzpatrick
Yes
Kavanagh
Yes
Mosley
Yes
Rozic
Yes
Weinstein
No
Buchwald
No
Friend
Yes
Kearns
Yes
Moya
Yes
Russell
Yes
Weprin
Yes
Butler
Yes
Galef
ER
Kim
Yes
Murray
Yes
Ryan
Yes
Williams
Yes
Cahill
Yes
Gantt
No
Kolb
No
Nojay
Yes
Saladino
Yes
Woerner
Yes
Cancel
Yes
Garbarino
No
Lalor
Yes
Nolan
No
Santabarbara
No
Wozniak
No
Castorina
Yes
Giglio
Yes
Lavine
No
Oaks
Yes
Schimel
ER
Wright
Yes
Ceretto
Yes
Gjonaj
No
Lawrence
Yes
O'Donnell
Yes
Schimminger
Yes
Zebrowski
Yes
Colton
Yes
Glick
Yes
Lentol
Yes
Ortiz
Yes
Seawright
Yes
Mr. Speaker
Yes
Cook
Yes
Goldfeder
Yes
Lifton
Yes
Otis
Yes
Sepulveda
Yes
Corwin
Yes
Goodell
Yes
Linares
No
Palmesano
Yes
Simanowitz
‡ Indicates voting via videoconference
A10083 Memo:
Go to topNEW YORK STATE ASSEMBLY
MEMORANDUM IN SUPPORT OF LEGISLATION
submitted in accordance with Assembly Rule III, Sec 1(f)   BILL NUMBER: A10083B SPONSOR: Lentol
  TITLE OF BILL: An act to amend the tax law and the economic develop- ment law, in relation to the creation of the empire state music production credit and the empire state digital gaming media production credit; to repeal subdivision 11 of section 352 of the economic develop- ment law relating thereto; and providing for the repeal of certain provisions upon expiration thereof   PURPOSE: To remake the digital media gaming and music credits adopted in Part K of the Revenue bill in last year's budget, into a "below-the-line" production credit This will allow both the industries to accurately calculate the benefits of the programs, allow the State to better moni- tor the credits, and to ease access to the incentives. Both industries are of the opinion that the credits as currently in statute are unwork- able and are actually serving as a deterrent to growth for New York companies.   SUMMARY OF PROVISIONS: Section one creates a new section forty-three in the Tax Law to provide a production incentive for the creation of music products in New York. Subdivision (a) lays out eligibility criteria for companies that file under the corporate franchise or personal income taxes. Subdivision (b) limits the annual amount of refundable credits available under the program to no more that $25 million a year, allocates the available credits to three regions of the state, namely New York City at fifty percent of the total credit allocations per year, the metro New York suburbs at twenty percent and Upstate at thirty percent. A project must perform at least 60 percent of eligible costs within a region to qualify for credits in that region. Subdivision (c) defines eligible "below the line" costs and qualified productions. Sections 2, 3 and 4 establish the credit in Articles 9-A and 22 of the Tax Law. Sections 5 through 8 create a new section forty-four of the Tax Law for digital gaming that mirrors the incentives for the music industry. Section 9 authorizes the Commissioner of Economic Development to estab- lish corresponding regulations and procedures to allow for the effective administration of the credit. Sections 10, 11 and 12 repeal the amendments to the Excelsior Credit program adopted as part of the SFY 2016 budget. Section 13 creates a new section 243 in the economic development law for reporting requirements for the two new programs. Reports will be filed by ESDC on a biannual basis to be sent to the Director of the Budget and the fiscal chairs of the legislature. The reports must detail the amount of credits claimed and paid, the number of projects by size and region, and the name of the taxpayer or taxpaying entity receiving the credits. In addition, every third year ESDC will be required to produce and pres- ent a report to the Executive and the Legislature prepared by an inde- pendent third party on how the programs are operating and the overall economic impact of the programs on the State economy. Section 14 contains the effective date of the act and a three year sunset to the programs.   JUSTIFICATION: This bill is designed to provide meaningful and effective incentives two industries essential to the future of the State. Provisions hoping to aid and intent both music and digital gaming production in New York State were included in the adopted SFY 16 Budget, but unfortunately, it now appears that those incentives fail to provide any real boosts to these industries The bill would remove the in hoped-for industry support from the Excelsior program, and support production activities occurring in the State. The need for a functioning incentive program can be seen in that New York currently only generates a tiny fraction, estimated at less than four percent, of the $17 billion U.S., and less than two percent of the $55 billion global music production industry. Unfortu- nately, in digital gaming New York currently fares even worse, with only one percent of the U.S. $25 billion industry, and an insignificant blip of the $70 billion worldwide gaming industry. What is truly disconcerting about these numbers is that New York is undoubtedly the home of the most creative individuals in the music industry, and graduates the finest game developers anywhere. We need robust and accessible programs to encourage these creative geniuses to work and perform in the State, for industries that have a potential for exponential growth both in Down and Up State. Aiding either of these programs through the Excelsior template has been seen as being nearly impossible, and no one is aware of any claims for credits for the two industries since they were placed in Excelsior last year. Consequently, both industries have approached the Legislature for different, more strategic and easier to access programs. This bill has received universal support from the music and gaming industries. The bill provides for a true "below the line" production credits that will exponentially grow these industries in New York, and create employment while not providing taxpayer funds for "stars and directors". In order to not to place any strains on the State budget, the credit for both industries is capped at $25 million a year for each industry. The bill also provides for strong reporting requirements to determine if the incentives will produce significant company revenue and permanent employment growth in the State.   PRIOR LEGISLATIVE HISTORY: none   FISCAL IMPLICATIONS: Up to $50 million a year in tax expenditures.   EFFECTIVE DATE: Immediately and shall apply to taxable years beginning on or after Janu- ary 1, 2017, and will be deemed to expire and be repealed on December 31, 2019.   EFFECTIVE DATE: Immediately and shall apply to taxable years begin- ning on or after January 1, 2016.
A10083 Text:
Go to top STATE OF NEW YORK ________________________________________________________________________ 10083--B IN ASSEMBLY May 10, 2016 ___________ Introduced by M. of A. LENTOL -- read once and referred to the Committee on Ways and Means -- committee discharged, bill amended, ordered reprinted as amended and recommitted to said committee -- reported and referred to the Committee on Rules -- Rules Committee discharged, bill amended, ordered reprinted as amended and recommitted to the Committee on Rules AN ACT to amend the tax law and the economic development law, in relation to the creation of the empire state music production credit and the empire state digital gaming media production credit; to repeal subdivision 11 of section 352 of the economic development law relating thereto; and providing for the repeal of certain provisions upon expi- ration thereof The People of the State of New York, represented in Senate and Assem- bly, do enact as follows: 1 Section 1. The tax law is amended by adding a new section 43 to read 2 as follows: 3 § 43. Empire state music production credit. (a) Allowance of credit. 4 (1) A taxpayer which is a music production entity engaged in qualified 5 music production, or who is a sole proprietor of or a member of a part- 6 nership, which is a music production entity engaged in qualified music 7 production, and is subject to tax under article nine-A or twenty-two of 8 this chapter, shall be allowed a credit against such tax to be computed 9 as provided herein. 10 (2) The amount of the credit shall be the product (or pro rata share 11 of the product, in the case of a member of a partnership or limited 12 liability company) of twenty-five percent and the eligible production 13 costs of one or more qualified music productions. 14 (3) Eligible production costs for a qualified music production 15 incurred and paid in this state but outside such metropolitan commuter 16 transportation district shall be eligible for a credit of ten percent of 17 such eligible production costs in addition to the credit specified in 18 paragraph two of this subdivision. EXPLANATION--Matter in italics (underscored) is new; matter in brackets [] is old law to be omitted. LBD15150-08-6A. 10083--B 2 1 (4) Eligible production costs shall not include those costs used by 2 the taxpayer or another taxpayer as the basis calculation of any other 3 tax credit allowed under this chapter or allowed in any other state. 4 (b) Allocation of credit. The aggregate amount of tax credits allowed 5 under this section, subdivision fifty-two of section two hundred ten-B 6 and subsection (hhh) of section six hundred six of this chapter in any 7 taxable year shall be twenty-five million dollars. The aggregate amount 8 of credits for any taxable year shall be distributed on a regional basis 9 as follows: fifty percent of the aggregate amount of credits shall be 10 available for qualified music productions that incur at least sixty 11 percent of eligible production costs for a qualified music production in 12 region one; twenty percent of the aggregate amount of credits shall be 13 available for qualified music productions that incur at least sixty 14 percent of eligible production costs for a qualified music production in 15 region two; and thirty percent of the aggregate amount of credits shall 16 be available for qualified music productions that incur at least sixty 17 percent of eligible production costs for a qualified music production in 18 region three. If such regional distribution is not fully allocated in 19 any taxable year, the remainder of such credits shall be available for 20 allocation to any region in the subsequent tax year. For the purposes 21 of this section region one shall contain the city of New York; region 22 two shall contain the counties of Westchester, Rockland, Nassau and 23 Suffolk; and region three shall contain any county not contained in 24 regions one and two. Such credit shall be allocated by the empire state 25 development corporation among taxpayers in order of priority based upon 26 the date of filing an application for allocation of music production 27 credits with such office. If the total amount of allocated credits 28 applied for in any particular year exceeds the aggregate amount of tax 29 credits allowed for such year under this section, such excess shall be 30 treated as having been applied for on the first day of the subsequent 31 taxable year. 32 (c) Definitions. As used in this section: 33 (1) "Music production" means the creation of a sound recording and any 34 related music video, either of which is intended for commercial release. 35 A "music production" does not include recordings that are primarily 36 spoken word or wildlife or nature sounds, or produced for instructional 37 use or advertising or promotional purposes. 38 (2) "Qualified music production" is a music production in which eligi- 39 ble production costs equal to or are in excess of seven thousand five 40 hundred dollars if incurred and paid in this state in the twelve months 41 preceding the date on which the credit is claimed. Provided, however, if 42 such production costs are incurred and paid outside the metropolitan 43 commuter transportation district in this state, such production costs 44 shall be equal to or in excess of three thousand seven hundred fifty 45 dollars to be a qualified music production for the purposes of this 46 paragraph. 47 (3) (A) "Eligible production costs for a qualified music production" 48 are costs incurred and paid in this state for tangible property and 49 services used in the production of qualified music production, as deter- 50 mined by the department of economic development, including, but not 51 limited to: (i) studio rental fees and related costs, (ii) instrument 52 and equipment rental fees, (iii) production session fees for musicians, 53 programmers, engineers, and technicians and (iv) mixing and mastering 54 services. 55 (B) Eligible production costs shall not include: (i) costs for tangi- 56 ble property or services used or performed outside of this state, (ii)A. 10083--B 3 1 performance fees for featured artists or featured guest artists receiv- 2 ing royalties or advances on royalties or special performance fees 3 (other than those that would normally be collected by a performing 4 rights organization) pursuant to an agreement directly with the producer 5 or employer, (iii) salaries or related compensation for producers or 6 songwriters, (iv) composer, artist or producer residual royalties or 7 advances, (v) licensing fees for samples, (vi) interpolations or other 8 music clearance costs, (vii) mastering or post-production expenditures 9 for projects that were not principally tracked and recorded in this 10 state, (viii) any costs associated with manufacturing, duplication, 11 packaging, distribution, promotion, marketing or touring not specif- 12 ically outlined in this subparagraph, or (ix) local transportation 13 expenditures directly related to music production and provided at or to 14 the site of such music production. With respect to the production of a 15 music video, eligible production costs are those defined in paragraph 16 two of subdivision (b) of section twenty-four of this article. Such 17 total production costs incurred and paid in this state shall be equal to 18 or exceed seventy-five percent of total cost of an eligible production 19 incurred and paid within and without this state. 20 (d) Cross-references. For applications of the credit provided for in 21 this section, see the following provisions of this chapter: 22 (1) Article nine-A: section two hundred ten-B, subdivision fifty-two. 23 (2) Article twenty-two: section six hundred six, subsection (i), para- 24 graph one, subparagraph (B), clause (xliii). 25 (3) Article twenty-two: section six hundred six, subsection (hhh). 26 § 2. Section 210-B of the tax law is amended by adding a new subdivi- 27 sion 52 to read as follows: 28 52. Empire state music production credit. (a) Allowance of credit. A 29 taxpayer who is eligible pursuant to section forty-three of this chapter 30 shall be allowed a credit to be computed as provided in such section 31 forty-three against the tax imposed by this article. 32 (b) Application of credit. The credit allowed under this subdivision 33 for any taxable year shall not reduce the tax due for such year to less 34 than the amount prescribed in paragraph (d) of subdivision one of 35 section two hundred ten of this article. Provided, however, that if the 36 amount of the credit allowable under this subdivision for any taxable 37 year reduces the tax to such amount, the excess shall be treated as an 38 overpayment of tax to be credited or refunded in accordance with the 39 provisions of section one thousand eighty-six of this chapter, provided, 40 however, no interest shall be paid thereon. 41 § 3. Subparagraph (B) of paragraph 1 of subsection (i) of section 606 42 of the tax law is amended by adding a new clause (xliii) to read as 43 follows: 44 (xliii) Empire state music Amount of credit 45 production credit under under subdivision 46 subsection (hhh) fifty-two of section two hundred 47 ten-B 48 § 4. Section 606 of the tax law is amended by adding a new subsection 49 (hhh) to read as follows: 50 (hhh) Empire state music production credit. (1) Allowance of credit. A 51 taxpayer who is eligible pursuant to section forty-three of this chapter 52 shall be allowed a credit to be computed as provided in such section 53 forty-three against the tax imposed by this article.A. 10083--B 4 1 (2) Application of credit. If the amount of the credit allowable under 2 this subsection for any taxable year exceeds the taxpayer's tax for such 3 year, the excess shall be treated as an overpayment of tax to be credit- 4 ed or refunded as provided in section six hundred eighty-six of this 5 article, provided, however, that no interest shall be paid thereon. 6 § 5. The tax law is amended by adding a new section 44 to read as 7 follows: 8 § 44. Empire state digital gaming media production credit. (a) Allow- 9 ance of credit. (1) A taxpayer which is a digital gaming media 10 production entity engaged in qualified digital gaming media production, 11 or who is a sole proprietor of or a member of a partnership, which is a 12 digital gaming media production entity engaged in qualified digital 13 gaming media production, and is subject to tax under article nine-A or 14 twenty-two of this chapter, shall be allowed a credit against such tax 15 to be computed as provided herein. 16 (2) The amount of the credit shall be the product (or pro rata share 17 of the product, in the case of a member of a partnership or limited 18 liability company) of twenty-five percent and the eligible production 19 costs of one or more qualified digital gaming media productions. 20 (3) Eligible digital gaming media production costs for a qualified 21 digital gaming media production incurred and paid in this state but 22 outside such metropolitan commuter transportation district shall be 23 eligible for a credit of ten percent of such eligible production costs 24 in addition to the credit specified in paragraph two of this subdivi- 25 sion. 26 (4) Eligible production costs shall not include those costs used by 27 the taxpayer or another taxpayer as the basis calculation of any other 28 tax credit allowed under this chapter or allowed in any other state. 29 (b) Allocation of credit. The aggregate amount of tax credits allowed 30 under this section, subdivision fifty-three of section two hundred ten-B 31 and subsection (iii) of section six hundred six of this chapter in any 32 taxable year shall be twenty-five million dollars. The aggregate amount 33 of credits for any taxable year must be distributed on a regional basis 34 as follows: fifty percent of the aggregate amount of credits shall be 35 available for qualified digital gaming media productions that incur at 36 least sixty percent of eligible production costs for a qualified digital 37 gaming media production in region one; twenty percent of the aggregate 38 amount of credits shall be available for qualified digital gaming media 39 productions that incur at least sixty percent of eligible production 40 costs for a qualified digital gaming media production in region two; and 41 thirty percent of the aggregate amount of credits shall be available for 42 qualified digital gaming media productions that incur at least sixty 43 percent of eligible production costs for a qualified digital gaming 44 media production in region three. If such regional distribution is not 45 fully allocated in any taxable year, the remainder of such credits shall 46 be available for allocation to any region in the subsequent tax year. 47 For the purposes of this section region one shall contain the city of 48 New York; region two shall contain the counties of Westchester, Rock- 49 land, Nassau and Suffolk; and region three shall contain any county not 50 contained in regions one and two. Such credit shall be allocated by the 51 empire state development corporation among taxpayers in order of priori- 52 ty based upon the date of filing an application for allocation of 53 digital gaming media production credit with such office. If the total 54 amount of allocated credits applied for in any particular year exceeds 55 the aggregate amount of tax credits allowed for such year under thisA. 10083--B 5 1 section, such excess shall be treated as having been applied for on the 2 first day of the subsequent taxable year. 3 (c) Definitions. As used in this section: 4 (1) "Qualified digital gaming media production" means: (i) a website, 5 the digital media production costs of which are paid or incurred predo- 6 minately in connection with (A) video simulation, animation, text, 7 audio, graphics or similar gaming related property embodied in digital 8 format, and (B) interactive features of digital gaming (e.g., links, 9 message boards, communities or content manipulation); (ii) video or 10 interactive games produced primarily for distribution over the internet, 11 wireless network or successors thereto; (iii) animation, simulation or 12 embedded graphics digital gaming related software intended for commer- 13 cial distribution regardless of medium; and (iv) a digital gaming media 14 production in which qualified digital gaming media production costs 15 equal to or are in excess of seven thousand five hundred dollars if 16 incurred and paid in this state in twelve months preceding the date on 17 which the credit is claimed. Provided, however, if such a production 18 costs are incurred and paid outside the metropolitan commuter transpor- 19 tation district in this state, such production costs shall be equal to 20 or in excess of three thousand seven hundred fifty dollars to be a qual- 21 ified digital gaming media production for purposes of this paragraph. A 22 qualified digital gaming media production does not include a website, 23 video, interactive game or software that is used predominately for: 24 electronic commerce (retail or wholesale purposes other than the sale of 25 video or interactive games), gambling (including activities regulated by 26 a New York gaming agency), exclusive local consumption for entities not 27 accessible by the general public including industrial or other private 28 purposes, and political advocacy purposes. 29 (2) "Digital gaming media production costs" means any costs for prop- 30 erty used and wages or salaries paid to individuals directly employed 31 for services performed by those individuals directly and predominately 32 in the creation of a digital gaming media production or productions. 33 Digital gaming media production costs include but shall not be limited 34 to to payments for property used and services performed directly and 35 predominately in the development (including concept creation), design, 36 production (including concept creation), design, production (including 37 testing), editing (including encoding) and compositing (including the 38 integration of digital files for interaction by end users) of digital 39 gaming media. Digital gaming media production costs shall not include 40 expenses incurred for the distribution, marketing, promotion, or adver- 41 tising content generated by end-users or other costs not directly and 42 predominately related to the creation, production or modification of 43 digital gaming media. In addition, salaries or other income distribution 44 related to the creation of digital gaming media for any person who 45 serves in the role of chief executive officer, chief financial officer, 46 president, treasurer or similar position shall not be included as 47 digital gaming media production costs. Furthermore, any income or other 48 distribution to any individual who holds an ownership interest in a 49 digital gaming media production entity shall not be included as digital 50 gaming media production costs. 51 (3) "Qualified digital gaming media production costs" means digital 52 gaming media production costs only to the extent such costs are attrib- 53 utable to the use of property or the performance of services by any 54 persons within the state directly and predominantly in the creation, 55 production or modification of digital gaming related media. Such total 56 production costs incurred and paid in this state shall be equal to orA. 10083--B 6 1 exceed seventy-five percent of total cost of an eligible production 2 incurred and paid within and without this state. 3 (d) Cross-references. For application of the credit provided for in 4 this section, see the following provisions of this chapter: 5 (1) Article nine-A: section two hundred ten-B, subdivision fifty- 6 three. 7 (2) Article twenty-two: section six hundred six, subsection (i), para- 8 graph one, subparagraph (B), clause (xliv). 9 (3) Article twenty-two: section six hundred six, subsection (iii). 10 § 6. Section 210-B of the tax law is amended by adding a new subdivi- 11 sion 53 to read as follows: 12 53. Empire state digital gaming media production credit. (a) Allowance 13 of credit. A taxpayer who is eligible pursuant to section forty-four of 14 this chapter shall be allowed a credit to be computed as provided in 15 such section forty-four against the tax imposed by this article. 16 (b) Application of credit. The credit allowed under this subdivision 17 for any taxable year shall not reduce the tax due for such year to less 18 than the amount prescribed in paragraph (d) of subdivision one of 19 section two hundred ten of this article. Provided, however, that if the 20 amount of the credit allowable under this subdivision for any taxable 21 year reduces the tax to such amount, the excess shall be treated as an 22 overpayment of tax to be credited or refunded in accordance with the 23 provisions of section one thousand eighty-six of this chapter, provided, 24 however, no interest shall be paid thereon. 25 § 7. Subparagraph (B) of paragraph 1 of subsection (i) of section 606 26 of the tax law is amended by adding a new clause (xliv) to read as 27 follows: 28 (xliv) Empire state digital Amount of credit 29 gaming media production under subdivision 30 credit under subsection (iii) fifty-three of section 31 two hundred ten-B 32 § 8. Section 606 of the tax law is amended by adding a new subsection 33 (iii) to read as follows: 34 (iii) Empire state digital gaming media production credit. (1) Allow- 35 ance of credit. A taxpayer who is eligible pursuant to section forty- 36 four of this chapter shall be allowed a credit to be computed as 37 provided in such section forty-four against the tax imposed by this 38 article. 39 (2) Application of credit. If the amount of the credit allowable under 40 this subsection for any taxable year exceeds the taxpayer's tax for such 41 year, the excess shall be treated as an overpayment of tax to be credit- 42 ed or refunded as provided in section six hundred eighty-six of this 43 article, provided, however, that no interest shall be paid thereon. 44 § 9. The state commissioner of economic development, after consulting 45 with the state commissioner of taxation and finance, shall promulgate 46 regulations by December 31, 2016 to establish procedures for the allo- 47 cation of tax credits as required by subdivision (a) of section 43 and 48 subdivision (a) of section 44 of the tax law. Such rules and regulations 49 shall include provisions describing the application process, the due 50 dates for such applications, the standards which shall be used to evalu- 51 ate the applications, the documentation that will be provided to taxpay- 52 ers substantiate to the New York state department of taxation and 53 finance the amount of tax credits allocated to such taxpayers, under 54 what conditions all or a portion of this tax credit may be revoked, and 55 such other provisions as deemed necessary and appropriate. Notwithstand-A. 10083--B 7 1 ing any other provisions to the contrary in the state administrative 2 procedure act, such rules and regulations may be adopted on an emergency 3 basis if necessary to meet such December 31, 2016 deadline. 4 § 10. Subdivision 11 of section 352 of the economic development law is 5 REPEALED. 6 § 11. Subdivisions 1, 3 and 5 of section 353 of the economic develop- 7 ment law, as amended by section 2 of part K of chapter 59 of the laws of 8 2015, are amended to read as follows: 9 1. To be a participant in the excelsior jobs program, a business enti- 10 ty shall operate in New York state predominantly: 11 (a) as a financial services data center or a financial services back 12 office operation; 13 (b) in manufacturing; 14 (c) in software development and new media; 15 (d) in scientific research and development; 16 (e) in agriculture; 17 (f) in the creation or expansion of back office operations in the 18 state; 19 (g) in a distribution center; 20 (h) in an industry with significant potential for private-sector 21 economic growth and development in this state as established by the 22 commissioner in regulations promulgated pursuant to this article. In 23 promulgating such regulations the commissioner shall include job and 24 investment criteria; or 25 (i) as an entertainment company[; or26(j) in music production]. 27 3. For the purposes of this article, in order to participate in the 28 excelsior jobs program, a business entity operating predominantly in 29 manufacturing must create at least ten net new jobs; a business entity 30 operating predominately in agriculture must create at least five net new 31 jobs; a business entity operating predominantly as a financial service 32 data center or financial services customer back office operation must 33 create at least fifty net new jobs; a business entity operating predomi- 34 nantly in scientific research and development must create at least five 35 net new jobs; a business entity operating predominantly in software 36 development must create at least five net new jobs; a business entity 37 creating or expanding back office operations must create at least fifty 38 net new jobs; [a business entity operating predominately in music39production must create at least five net new jobs;] a business entity 40 operating predominantly as an entertainment company must create or 41 obtain at least one hundred net new jobs; or a business entity operating 42 predominantly as a distribution center in the state must create at least 43 seventy-five net new jobs, notwithstanding subdivision five of this 44 section; or a business entity must be a regionally significant project 45 as defined in this article; or 46 5. A not-for-profit business entity, a business entity whose primary 47 function is the provision of services including personal services, busi- 48 ness services, or the provision of utilities, and a business entity 49 engaged predominantly in the retail or entertainment industry, other 50 than a business operating as an entertainment company as defined in this 51 article [and other than a business entity engaged in music production], 52 and a company engaged in the generation or distribution of electricity, 53 the distribution of natural gas, or the production of steam associated 54 with the generation of electricity are not eligible to receive the tax 55 credit described in this article.A. 10083--B 8 1 § 12. Subdivision 21 of section 352 of the economic development law, 2 as amended by section 1 of part K of chapter 59 of the laws of 2015, is 3 amended to read as follows: 4 21. "Software development" means the creation of coded computer 5 instructions [or production or post-production of video games, as6defined in subdivision one-a of section six hundred eleven of the gener-7al business law, other than those embedded and used exclusively in8advertising, promotional websites or microsites,] and [also] includes 9 new media as defined by the commissioner in regulations. 10 § 13. The economic development law is amended by adding a new section 11 243 to read as follows: 12 § 243. Reports on the music and digital gaming industries in New York. 13 1. The empire state development corporation shall file a report on a 14 biannual basis with the director of the division of the budget and the 15 chairpersons of the assembly ways and means committee and senate finance 16 committee. The report shall be filed no later than thirty days before 17 the mid-point and the end of the state fiscal year. The first report 18 shall cover the calendar half year that begins on January first, two 19 thousand eighteen. Each report must contain the following information 20 for the covered calendar half year: 21 (a) the total dollar amount of credits allocated pursuant to sections 22 forty-three and forty-four of the tax law during the half year, broken 23 down by month; 24 (b) the number of music and digital gaming projects, which have been 25 allocated tax credits of less than one million dollars per project, and 26 the total dollar amount of credits allocated to those projects distrib- 27 uted by region pursuant to subdivision (b) of sections forty-three and 28 forty-four of the tax law; 29 (c) the number of music and digital gaming projects, which have been 30 allocated tax credits of more than one million dollars, and the total 31 dollar amount of credits allocated to those projects distributed by 32 region pursuant to subdivision (b) of sections forty-three and forty- 33 four of the tax law; 34 (d) a list of each eligible music and digital gaming project, which 35 has been allocated a tax credit enumerated by region pursuant to subdi- 36 vision (b) of sections forty-three and forty-four of the tax law, and 37 for each of those projects, (i) the estimated number of employees asso- 38 ciated with the project, (ii) the estimated qualifying costs for the 39 projects, (iii) the estimated total costs of the project, (iv) the cred- 40 it eligible employee hours for each project, and (v) total wages for 41 such credit eligible employee hours for each project; and 42 (e) (i) the name of each taxpayer allocated a tax credit for each 43 project and the county of residence or incorporation of such taxpayer 44 or, if the taxpayer does not reside or is not incorporated in New York, 45 the state of residence or incorporation; however, if the taxpayer claims 46 a tax credit because the taxpayer is a member of a limited liability 47 company, a partner in a partnership or a shareholder in a subchapter S 48 corporation, the name of each limited liability company, partnership or 49 subchapter S corporation earning any of those tax credits must be 50 included in the report instead of information about the taxpayer claim- 51 ing the tax credit, (ii) the amount of tax credit allocated to each 52 taxpayer; provided however, if the taxpayer claims a tax credit because 53 the taxpayer is a member of a limited liability company, a partner in a 54 partnership or a shareholder in a subchapter S corporation, the amount 55 of tax credit earned by each entity must be included in the report 56 instead of information about the taxpayer claiming the tax credit, andA. 10083--B 9 1 (iii) information identifying the project associated with each taxpayer 2 for which a tax credit was claimed under section forty-three or forty- 3 four of the tax law. 4 2. The empire state development corporation shall file a report on a 5 triennial basis with the director of the division of the budget and the 6 chairpersons of the assembly ways and means committee and senate finance 7 committee. The first report shall be filed no later than March first, 8 two thousand twenty. The report must be prepared by an independent third 9 party auditor and include: (a) information regarding the empire state 10 music production credit and the empire state digital gaming production 11 credit programs including the efficiency of operations, reliability of 12 financial reporting, compliance with laws and regulations and distrib- 13 ution of assets and funds; (b) and economic impact study prepared by an 14 independent third party of the program with special emphasis on the 15 regional impact by region and the total dollar amount of credits allo- 16 cated to those projects distributed by region pursuant to subdivision 17 (b) of sections forty-three and forty-four of the tax law; and (c) any 18 other information or statistical information that the commissioner of 19 economic development deems to be useful in analyzing the effects of the 20 programs. 21 § 14. This act shall take effect immediately and shall apply to taxa- 22 ble years beginning on January 1, 2017 and before January 1, 2020; 23 provided that sections one through eight of this act shall expire and be 24 deemed repealed December 31, 2019.