A10083 Summary:

BILL NOA10083B
 
SAME ASSAME AS S07485-B
 
SPONSORLentol
 
COSPNSR
 
MLTSPNSR
 
Add §§43 & 44, amd §§210-B & 606, Tax L; rpld §352 sub 11, amd §§353 & 352, add §243, Ec Dev L
 
Establishes the empire state music production credit and the empire state digital gaming media production credit; defines terms.
Go to top    

A10083 Actions:

BILL NOA10083B
 
05/10/2016referred to ways and means
05/27/2016amend and recommit to ways and means
05/27/2016print number 10083a
06/08/2016reported referred to rules
06/13/2016amend (t) and recommit to rules
06/13/2016print number 10083b
06/14/2016reported
06/14/2016rules report cal.303
06/14/2016ordered to third reading rules cal.303
06/16/2016passed assembly
06/16/2016delivered to senate
06/16/2016REFERRED TO RULES
06/16/2016SUBSTITUTED FOR S7485B
06/16/20163RD READING CAL.1871
06/16/2016PASSED SENATE
06/16/2016RETURNED TO ASSEMBLY
11/16/2016delivered to governor
11/28/2016vetoed memo.255
11/28/2016tabled
Go to top

A10083 Committee Votes:

WAYS AND MEANS Chair:Farrell DATE:06/08/2016AYE/NAY:24/8 Action: Favorable refer to committee Rules
FarrellAyeOaksNay
LentolAyeCrouchNay
SchimmingerAyeBarclayNay
GanttAyeFitzpatrickNay
WeinsteinAyeSaladinoAye
GlickAyeHawleyNay
NolanExcusedDupreyExcused
PretlowAyeCorwinNay
PerryAyeMalliotakisNay
ColtonAyeWalterNay
CookAye
CahillAye
AubryAye
HooperAye
ThieleAye
WrightAye
CusickAye
OrtizAye
BenedettoAye
MarkeyAye
MoyaAye
WeprinAye
RodriguezAye
RamosExcused
BraunsteinAye

RULES Chair:Heastie DATE:06/14/2016AYE/NAY:27/0 Action: Favorable
HeastieAyeKolbAye
GottfriedAyeTediscoAye
LentolAyeOaksAye
FarrellAyeButlerAye
GanttAyeCrouchAye
NolanAyeFinchExcused
WeinsteinAyeBarclayAye
HooperAyeRaiaAye
OrtizAyeDupreyAye
PretlowAye
CookAye
GlickAye
MorelleAye
AubryAye
EnglebrightAye
WrightExcused
DinowitzExcused
ColtonAye
MagnarelliAye
PerryAye
MarkeyAye

Go to top

A10083 Memo:

NEW 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.
Go to top

A10083 Text:



 
                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.
                                                                   LBD15150-08-6

        A. 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 this

        A. 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  or

        A. 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[; or
    26    (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 music
    39  production 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,  as
     6  defined in subdivision one-a of section six hundred eleven of the gener-
     7  al  business  law,  other  than  those  embedded and used exclusively in
     8  advertising, 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, and

        A. 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.
Go to top