Source: https://www.nysenate.gov/legislation/bills/2019/S2966
Timestamp: 2019-09-20 01:22:23
Document Index: 221805014

Matched Legal Cases: ['§44', '§210', '§352', '§353', '§243', '§ 44', '§ 2', '§  3', '§  4', '§  5', '§ 45', '§ 6', '§ 7', '§ 8', '§ 9', '§ 10', '§  11', '§  12', '§  13', '§ 243', '§ 14']

NY State Senate Bill S2966
senate Bill S2966
Establishes the empire state music production credit and the empire state digital gaming media production credit; repealer
Get Status Alerts for S2966
Jan 31, 2019 referred to investigations and government operations
S2966 (ACTIVE) - Details
Add §§44 & 45, amd §§210-B & 606, Tax L; rpld §352 sub 13, amd §§353 & 352, add §243, Ec Dev L
2015-2016: S7485, A10083
2017-2018: S3159, A2670
S2966 (ACTIVE) - Summary
Establishes the empire state music production credit and the empire state digital gaming media production credit; defines terms.
S2966 (ACTIVE) - Sponsor Memo
BILL NUMBER: S2966
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 13 of section 352 of the economic development law relating
thereto; and providing for the repeal of certain provisions upon expira-
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
Section one creates a new section forty-four 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 $50 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-five 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 five year sunset
to the programs.
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 disconcert-
ing. 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 UpState.
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 $50 million a year for each
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.
2015-16:S. 4072-B/A.10083: Veto 255
2017-18: S 3159-A /A2670-B
Up to $100 million a year in tax expenditures.
Immediately and shall apply to taxable years beginning on or after Janu-
ary 1, 2020 and before January 1, 2025 provided that sections one
through eight of this act shall expire and be deemed repealed December
31, 2024.
View More (114 Lines)
S2966 (ACTIVE) - Bill Text download pdf
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
thereto; and providing for the repeal of certain provisions upon expi-
§ 44. EMPIRE STATE MUSIC PRODUCTION CREDIT. (A) ALLOWANCE  OF  CREDIT.
(1)  A  TAXPAYER WHICH IS A MUSIC PRODUCTION ENTITY ENGAGED IN QUALIFIED
MUSIC PRODUCTION, OR WHO IS A SOLE PROPRIETOR OF OR A MEMBER OF A  PART-
NERSHIP,  WHICH  IS A MUSIC PRODUCTION ENTITY ENGAGED IN QUALIFIED MUSIC
PRODUCTION, AND IS SUBJECT TO TAX UNDER ARTICLE NINE-A OR TWENTY-TWO  OF
THIS  CHAPTER, SHALL BE ALLOWED A CREDIT AGAINST SUCH TAX TO BE COMPUTED
AS PROVIDED HEREIN.
(2) THE AMOUNT OF THE CREDIT SHALL BE THE PRODUCT (OR PRO  RATA  SHARE
OF  THE  PRODUCT,  IN  THE  CASE OF A MEMBER OF A PARTNERSHIP OR LIMITED
LIABILITY COMPANY) OF TWENTY-FIVE PERCENT AND  THE  ELIGIBLE  PRODUCTION
COSTS OF ONE OR MORE QUALIFIED MUSIC PRODUCTIONS.
(3)  ELIGIBLE  PRODUCTION  COSTS  FOR  A  QUALIFIED  MUSIC  PRODUCTION
INCURRED AND PAID IN THIS STATE BUT OUTSIDE SUCH  METROPOLITAN  COMMUTER
TRANSPORTATION DISTRICT SHALL BE ELIGIBLE FOR A CREDIT OF TEN PERCENT OF
SUCH  ELIGIBLE  PRODUCTION  COSTS IN ADDITION TO THE CREDIT SPECIFIED IN
LBD04548-01-9
S. 2966                             2
(4) ELIGIBLE PRODUCTION COSTS SHALL NOT INCLUDE THOSE  COSTS  USED  BY
THE  TAXPAYER  OR ANOTHER TAXPAYER AS THE BASIS CALCULATION OF ANY OTHER
TAX CREDIT ALLOWED UNDER THIS CHAPTER OR ALLOWED IN ANY OTHER STATE.
(B)  ALLOCATION OF CREDIT. THE AGGREGATE AMOUNT OF TAX CREDITS ALLOWED
UNDER THIS SECTION, SUBDIVISION FIFTY-THREE OF SECTION TWO HUNDRED TEN-B
AND SUBSECTION (JJJ) OF SECTION SIX HUNDRED SIX OF THIS CHAPTER  IN  ANY
TAXABLE  YEAR  SHALL  BE FIFTY MILLION DOLLARS.  THE AGGREGATE AMOUNT OF
CREDITS FOR ANY TAXABLE YEAR SHALL BE DISTRIBUTED ON A REGIONAL BASIS AS
FOLLOWS: FIFTY PERCENT OF THE  AGGREGATE  AMOUNT  OF  CREDITS  SHALL  BE
AVAILABLE  FOR  QUALIFIED  MUSIC  PRODUCTIONS  THAT INCUR AT LEAST SIXTY
PERCENT OF ELIGIBLE PRODUCTION COSTS FOR A QUALIFIED MUSIC PRODUCTION IN
REGION ONE; TWENTY PERCENT OF THE AGGREGATE AMOUNT OF CREDITS  SHALL  BE
REGION TWO; AND THIRTY PERCENT OF THE AGGREGATE AMOUNT OF CREDITS  SHALL
BE  AVAILABLE  FOR QUALIFIED MUSIC PRODUCTIONS THAT INCUR AT LEAST SIXTY
REGION THREE. IF SUCH REGIONAL DISTRIBUTION IS NOT  FULLY  ALLOCATED  IN
ANY  TAXABLE  YEAR, THE REMAINDER OF SUCH CREDITS SHALL BE AVAILABLE FOR
ALLOCATION TO ANY REGION IN THE SUBSEQUENT TAX YEAR.   FOR THE  PURPOSES
OF  THIS  SECTION  REGION ONE SHALL CONTAIN THE CITY OF NEW YORK; REGION
TWO SHALL CONTAIN THE COUNTIES  OF  WESTCHESTER,  ROCKLAND,  NASSAU  AND
SUFFOLK;  AND  REGION  THREE  SHALL  CONTAIN ANY COUNTY NOT CONTAINED IN
REGIONS ONE AND TWO.  SUCH CREDIT SHALL BE ALLOCATED BY THE EMPIRE STATE
DEVELOPMENT CORPORATION AMONG TAXPAYERS IN ORDER OF PRIORITY BASED  UPON
THE  DATE  OF  FILING  AN APPLICATION FOR ALLOCATION OF MUSIC PRODUCTION
CREDITS WITH SUCH OFFICE. IF  THE  TOTAL  AMOUNT  OF  ALLOCATED  CREDITS
APPLIED  FOR  IN ANY PARTICULAR YEAR EXCEEDS THE AGGREGATE AMOUNT OF TAX
CREDITS ALLOWED FOR SUCH YEAR UNDER THIS SECTION, SUCH EXCESS  SHALL  BE
TREATED  AS  HAVING  BEEN APPLIED FOR ON THE FIRST DAY OF THE SUBSEQUENT
(1) "MUSIC PRODUCTION" MEANS THE CREATION OF A SOUND RECORDING AND ANY
RELATED MUSIC VIDEO, EITHER OF WHICH IS INTENDED FOR COMMERCIAL RELEASE.
A "MUSIC PRODUCTION" DOES NOT  INCLUDE  RECORDINGS  THAT  ARE  PRIMARILY
SPOKEN  WORD OR WILDLIFE OR NATURE SOUNDS, OR PRODUCED FOR INSTRUCTIONAL
USE OR ADVERTISING OR PROMOTIONAL PURPOSES.
(2) "QUALIFIED MUSIC PRODUCTION" IS A MUSIC PRODUCTION IN WHICH ELIGI-
BLE PRODUCTION COSTS EQUAL TO OR ARE IN EXCESS OF  SEVEN  THOUSAND  FIVE
HUNDRED  DOLLARS IF INCURRED AND PAID IN THIS STATE IN THE TWELVE MONTHS
PRECEDING THE DATE ON WHICH THE CREDIT IS CLAIMED. PROVIDED, HOWEVER, IF
SUCH PRODUCTION COSTS ARE INCURRED AND  PAID  OUTSIDE  THE  METROPOLITAN
COMMUTER  TRANSPORTATION  DISTRICT  IN THIS STATE, SUCH PRODUCTION COSTS
SHALL BE EQUAL TO OR IN EXCESS OF THREE  THOUSAND  SEVEN  HUNDRED  FIFTY
DOLLARS  TO  BE  A  QUALIFIED  MUSIC PRODUCTION FOR THE PURPOSES OF THIS
(3) (A) "ELIGIBLE PRODUCTION COSTS FOR A QUALIFIED  MUSIC  PRODUCTION"
ARE  COSTS  INCURRED  AND  PAID  IN THIS STATE FOR TANGIBLE PROPERTY AND
SERVICES USED IN THE PRODUCTION OF QUALIFIED MUSIC PRODUCTION, AS DETER-
MINED BY THE DEPARTMENT OF  ECONOMIC  DEVELOPMENT,  INCLUDING,  BUT  NOT
LIMITED  TO:   (I) STUDIO RENTAL FEES AND RELATED COSTS, (II) INSTRUMENT
AND EQUIPMENT RENTAL FEES, (III) PRODUCTION SESSION FEES FOR  MUSICIANS,
PROGRAMMERS,  ENGINEERS,  AND  TECHNICIANS AND (IV) MIXING AND MASTERING
(B) ELIGIBLE PRODUCTION COSTS SHALL NOT INCLUDE: (I) COSTS FOR  TANGI-
BLE  PROPERTY  OR SERVICES USED OR PERFORMED OUTSIDE OF THIS STATE, (II)
S. 2966                             3
PERFORMANCE FEES FOR FEATURED ARTISTS OR FEATURED GUEST ARTISTS  RECEIV-
ING  ROYALTIES  OR  ADVANCES  ON  ROYALTIES  OR SPECIAL PERFORMANCE FEES
(OTHER THAN THOSE THAT WOULD  NORMALLY  BE  COLLECTED  BY  A  PERFORMING
RIGHTS ORGANIZATION) PURSUANT TO AN AGREEMENT DIRECTLY WITH THE PRODUCER
OR  EMPLOYER,  (III)  SALARIES  OR RELATED COMPENSATION FOR PRODUCERS OR
SONGWRITERS, (IV) COMPOSER, ARTIST OR  PRODUCER  RESIDUAL  ROYALTIES  OR
ADVANCES,  (V)  LICENSING FEES FOR SAMPLES, (VI) INTERPOLATIONS OR OTHER
MUSIC CLEARANCE COSTS, (VII) MASTERING OR  POST-PRODUCTION  EXPENDITURES
FOR  PROJECTS  THAT  WERE  NOT  PRINCIPALLY TRACKED AND RECORDED IN THIS
STATE, (VIII) ANY  COSTS  ASSOCIATED  WITH  MANUFACTURING,  DUPLICATION,
PACKAGING,  DISTRIBUTION,  PROMOTION,  MARKETING  OR TOURING NOT SPECIF-
ICALLY OUTLINED IN  THIS  SUBPARAGRAPH,  OR  (IX)  LOCAL  TRANSPORTATION
EXPENDITURES  DIRECTLY RELATED TO MUSIC PRODUCTION AND PROVIDED AT OR TO
THE SITE OF SUCH MUSIC PRODUCTION.  WITH RESPECT TO THE PRODUCTION OF  A
MUSIC  VIDEO,  ELIGIBLE  PRODUCTION COSTS ARE THOSE DEFINED IN PARAGRAPH
TWO OF SUBDIVISION (B) OF SECTION  TWENTY-FOUR  OF  THIS  ARTICLE.  SUCH
TOTAL PRODUCTION COSTS INCURRED AND PAID IN THIS STATE SHALL BE EQUAL TO
OR  EXCEED  SEVENTY-FIVE PERCENT OF TOTAL COST OF AN ELIGIBLE PRODUCTION
INCURRED AND PAID WITHIN AND WITHOUT THIS STATE.
(D) CROSS-REFERENCES. FOR APPLICATIONS OF THE CREDIT PROVIDED  FOR  IN
THIS SECTION, SEE THE FOLLOWING PROVISIONS OF THIS CHAPTER:
(1)  ARTICLE  NINE-A:  SECTION  TWO  HUNDRED TEN-B, SUBDIVISION FIFTY-
(2) ARTICLE TWENTY-TWO: SECTION SIX HUNDRED SIX, SUBSECTION (I), PARA-
GRAPH ONE, SUBPARAGRAPH (B), CLAUSE (XLIV).
(3) ARTICLE TWENTY-TWO: SECTION SIX HUNDRED SIX, SUBSECTION (JJJ).
§ 2. Section 210-B of the tax law is amended by adding a new  subdivi-
53.  EMPIRE  STATE MUSIC PRODUCTION CREDIT. (A) ALLOWANCE OF CREDIT. A
TAXPAYER WHO IS ELIGIBLE PURSUANT TO SECTION FORTY-FOUR OF THIS  CHAPTER
SHALL  BE  ALLOWED  A  CREDIT TO BE COMPUTED AS PROVIDED IN SUCH SECTION
FORTY-FOUR AGAINST THE TAX IMPOSED BY THIS ARTICLE.
FOR  ANY TAXABLE YEAR SHALL NOT REDUCE THE TAX DUE FOR SUCH YEAR TO LESS
THAN THE AMOUNT PRESCRIBED  IN  PARAGRAPH  (D)  OF  SUBDIVISION  ONE  OF
SECTION  TWO HUNDRED TEN OF THIS ARTICLE. PROVIDED, HOWEVER, THAT IF THE
AMOUNT OF THE CREDIT ALLOWABLE UNDER THIS SUBDIVISION  FOR  ANY  TAXABLE
YEAR  REDUCES  THE TAX TO SUCH AMOUNT, THE EXCESS SHALL BE TREATED AS AN
OVERPAYMENT OF TAX TO BE CREDITED OR REFUNDED  IN  ACCORDANCE  WITH  THE
PROVISIONS OF SECTION ONE THOUSAND EIGHTY-SIX OF THIS CHAPTER, PROVIDED,
HOWEVER, NO INTEREST SHALL BE PAID THEREON.
§  3. Subparagraph (B) of paragraph 1 of subsection (i) of section 606
of the tax law is amended by adding a  new  clause  (xliv)  to  read  as
(XLIV) EMPIRE STATE MUSIC               AMOUNT OF CREDIT UNDER
PRODUCTION CREDIT UNDER                 SUBDIVISION FIFTY-THREE
SUBSECTION (JJJ)                        OF SECTION TWO HUNDRED TEN-B
§  4. Section 606 of the tax law is amended by adding a new subsection
(jjj) to read as follows:
(JJJ) EMPIRE STATE MUSIC PRODUCTION CREDIT. (1) ALLOWANCE OF CREDIT. A
S. 2966                             4
(2) APPLICATION OF CREDIT. IF THE AMOUNT OF THE CREDIT ALLOWABLE UNDER
YEAR, THE EXCESS SHALL BE TREATED AS AN OVERPAYMENT OF TAX TO BE CREDIT-
ED OR REFUNDED AS PROVIDED IN SECTION SIX  HUNDRED  EIGHTY-SIX  OF  THIS
§  5.  The  tax  law  is amended by adding a new section 45 to read as
§ 45. EMPIRE STATE DIGITAL GAMING MEDIA PRODUCTION CREDIT. (A)  ALLOW-
ANCE  OF  CREDIT.  (1)  A  TAXPAYER  WHICH  IS  A  DIGITAL  GAMING MEDIA
PRODUCTION ENTITY ENGAGED IN QUALIFIED DIGITAL GAMING MEDIA  PRODUCTION,
OR  WHO IS A SOLE PROPRIETOR OF OR A MEMBER OF A PARTNERSHIP, WHICH IS A
DIGITAL GAMING MEDIA PRODUCTION  ENTITY  ENGAGED  IN  QUALIFIED  DIGITAL
GAMING  MEDIA  PRODUCTION, AND IS SUBJECT TO TAX UNDER ARTICLE NINE-A OR
TWENTY-TWO OF THIS CHAPTER, SHALL BE ALLOWED A CREDIT AGAINST  SUCH  TAX
TO BE COMPUTED AS PROVIDED HEREIN.
(2)  THE  AMOUNT OF THE CREDIT SHALL BE THE PRODUCT (OR PRO RATA SHARE
OF THE PRODUCT, IN THE CASE OF A MEMBER  OF  A  PARTNERSHIP  OR  LIMITED
LIABILITY  COMPANY)  OF  TWENTY-FIVE PERCENT AND THE ELIGIBLE PRODUCTION
COSTS OF ONE OR MORE QUALIFIED DIGITAL GAMING MEDIA PRODUCTIONS.
(3) ELIGIBLE DIGITAL GAMING MEDIA PRODUCTION  COSTS  FOR  A  QUALIFIED
DIGITAL  GAMING  MEDIA  PRODUCTION  INCURRED  AND PAID IN THIS STATE BUT
OUTSIDE SUCH METROPOLITAN  COMMUTER  TRANSPORTATION  DISTRICT  SHALL  BE
ELIGIBLE  FOR  A CREDIT OF TEN PERCENT OF SUCH ELIGIBLE PRODUCTION COSTS
IN ADDITION TO THE CREDIT SPECIFIED IN PARAGRAPH TWO  OF  THIS  SUBDIVI-
(4)  ELIGIBLE  PRODUCTION  COSTS SHALL NOT INCLUDE THOSE COSTS USED BY
THE TAXPAYER OR ANOTHER TAXPAYER AS THE BASIS CALCULATION OF  ANY  OTHER
UNDER THIS SECTION, SUBDIVISION FIFTY-FOUR OF SECTION TWO HUNDRED  TEN-B
AND  SUBSECTION  (KKK) OF SECTION SIX HUNDRED SIX OF THIS CHAPTER IN ANY
TAXABLE YEAR SHALL BE FIFTY MILLION DOLLARS.   THE AGGREGATE  AMOUNT  OF
CREDITS  FOR ANY TAXABLE YEAR MUST BE DISTRIBUTED ON A REGIONAL BASIS AS
AVAILABLE  FOR  QUALIFIED DIGITAL GAMING MEDIA PRODUCTIONS THAT INCUR AT
LEAST SIXTY PERCENT OF ELIGIBLE PRODUCTION COSTS FOR A QUALIFIED DIGITAL
GAMING MEDIA PRODUCTION IN REGION ONE; TWENTY PERCENT OF  THE  AGGREGATE
AMOUNT  OF CREDITS SHALL BE AVAILABLE FOR QUALIFIED DIGITAL GAMING MEDIA
PRODUCTIONS THAT INCUR AT LEAST SIXTY  PERCENT  OF  ELIGIBLE  PRODUCTION
COSTS FOR A QUALIFIED DIGITAL GAMING MEDIA PRODUCTION IN REGION TWO; AND
THIRTY PERCENT OF THE AGGREGATE AMOUNT OF CREDITS SHALL BE AVAILABLE FOR
QUALIFIED  DIGITAL  GAMING  MEDIA  PRODUCTIONS THAT INCUR AT LEAST SIXTY
PERCENT OF ELIGIBLE PRODUCTION COSTS  FOR  A  QUALIFIED  DIGITAL  GAMING
MEDIA  PRODUCTION IN REGION THREE.  IF SUCH REGIONAL DISTRIBUTION IS NOT
FULLY ALLOCATED IN ANY TAXABLE YEAR, THE REMAINDER OF SUCH CREDITS SHALL
BE AVAILABLE FOR ALLOCATION TO ANY REGION IN THE  SUBSEQUENT  TAX  YEAR.
FOR  THE  PURPOSES  OF THIS SECTION REGION ONE SHALL CONTAIN THE CITY OF
NEW YORK; REGION TWO SHALL CONTAIN THE COUNTIES  OF  WESTCHESTER,  ROCK-
LAND,  NASSAU AND SUFFOLK; AND REGION THREE SHALL CONTAIN ANY COUNTY NOT
CONTAINED IN REGIONS ONE AND TWO.  SUCH CREDIT SHALL BE ALLOCATED BY THE
EMPIRE STATE DEVELOPMENT CORPORATION AMONG TAXPAYERS IN ORDER OF PRIORI-
TY BASED UPON THE DATE  OF  FILING  AN  APPLICATION  FOR  ALLOCATION  OF
DIGITAL  GAMING  MEDIA  PRODUCTION CREDIT WITH SUCH OFFICE. IF THE TOTAL
AMOUNT OF ALLOCATED CREDITS APPLIED FOR IN ANY PARTICULAR  YEAR  EXCEEDS
THE  AGGREGATE  AMOUNT  OF  TAX CREDITS ALLOWED FOR SUCH YEAR UNDER THIS
S. 2966                             5
SECTION, SUCH EXCESS SHALL BE TREATED AS HAVING BEEN APPLIED FOR ON  THE
FIRST DAY OF THE SUBSEQUENT TAXABLE YEAR.
(1)  "QUALIFIED DIGITAL GAMING MEDIA PRODUCTION" MEANS: (I) A WEBSITE,
THE DIGITAL MEDIA PRODUCTION COSTS OF WHICH ARE PAID OR INCURRED  PREDO-
MINATELY  IN  CONNECTION  WITH  (A)  VIDEO  SIMULATION, ANIMATION, TEXT,
AUDIO, GRAPHICS OR SIMILAR GAMING RELATED PROPERTY EMBODIED  IN  DIGITAL
FORMAT,  AND  (B)  INTERACTIVE  FEATURES OF DIGITAL GAMING (E.G., LINKS,
MESSAGE BOARDS, COMMUNITIES OR  CONTENT  MANIPULATION);  (II)  VIDEO  OR
INTERACTIVE GAMES PRODUCED PRIMARILY FOR DISTRIBUTION OVER THE INTERNET,
WIRELESS  NETWORK  OR SUCCESSORS THERETO; (III) ANIMATION, SIMULATION OR
EMBEDDED GRAPHICS DIGITAL GAMING RELATED SOFTWARE INTENDED  FOR  COMMER-
CIAL  DISTRIBUTION REGARDLESS OF MEDIUM; AND (IV) A DIGITAL GAMING MEDIA
PRODUCTION IN WHICH QUALIFIED  DIGITAL  GAMING  MEDIA  PRODUCTION  COSTS
EQUAL  TO  OR  ARE  IN  EXCESS OF SEVEN THOUSAND FIVE HUNDRED DOLLARS IF
INCURRED AND PAID IN THIS STATE IN TWELVE MONTHS PRECEDING THE  DATE  ON
WHICH  THE  CREDIT  IS  CLAIMED. PROVIDED, HOWEVER, IF SUCH A PRODUCTION
COSTS ARE INCURRED AND PAID OUTSIDE THE METROPOLITAN COMMUTER  TRANSPOR-
TATION  DISTRICT  IN THIS STATE, SUCH PRODUCTION COSTS SHALL BE EQUAL TO
OR IN EXCESS OF THREE THOUSAND SEVEN HUNDRED FIFTY DOLLARS TO BE A QUAL-
IFIED DIGITAL GAMING MEDIA PRODUCTION FOR PURPOSES OF THIS PARAGRAPH.  A
QUALIFIED  DIGITAL  GAMING  MEDIA PRODUCTION DOES NOT INCLUDE A WEBSITE,
VIDEO, INTERACTIVE GAME OR SOFTWARE  THAT  IS  USED  PREDOMINATELY  FOR:
ELECTRONIC COMMERCE (RETAIL OR WHOLESALE PURPOSES OTHER THAN THE SALE OF
VIDEO OR INTERACTIVE GAMES), GAMBLING (INCLUDING ACTIVITIES REGULATED BY
A  NEW YORK GAMING AGENCY), EXCLUSIVE LOCAL CONSUMPTION FOR ENTITIES NOT
ACCESSIBLE BY THE GENERAL PUBLIC INCLUDING INDUSTRIAL OR  OTHER  PRIVATE
PURPOSES, AND POLITICAL ADVOCACY PURPOSES.
(2)  "DIGITAL GAMING MEDIA PRODUCTION COSTS" MEANS ANY COSTS FOR PROP-
ERTY USED AND WAGES OR SALARIES PAID TO  INDIVIDUALS  DIRECTLY  EMPLOYED
FOR  SERVICES  PERFORMED BY THOSE INDIVIDUALS DIRECTLY AND PREDOMINATELY
IN THE CREATION OF A DIGITAL GAMING  MEDIA  PRODUCTION  OR  PRODUCTIONS.
DIGITAL  GAMING  MEDIA PRODUCTION COSTS INCLUDE BUT SHALL NOT BE LIMITED
TO TO PAYMENTS FOR PROPERTY USED AND  SERVICES  PERFORMED  DIRECTLY  AND
PREDOMINATELY  IN  THE DEVELOPMENT (INCLUDING CONCEPT CREATION), DESIGN,
PRODUCTION (INCLUDING CONCEPT CREATION), DESIGN,  PRODUCTION  (INCLUDING
TESTING),  EDITING  (INCLUDING  ENCODING) AND COMPOSITING (INCLUDING THE
INTEGRATION OF DIGITAL FILES FOR INTERACTION BY END  USERS)  OF  DIGITAL
GAMING  MEDIA.   DIGITAL GAMING MEDIA PRODUCTION COSTS SHALL NOT INCLUDE
EXPENSES INCURRED FOR THE DISTRIBUTION, MARKETING, PROMOTION, OR  ADVER-
TISING  CONTENT  GENERATED  BY END-USERS OR OTHER COSTS NOT DIRECTLY AND
PREDOMINATELY RELATED TO THE CREATION,  PRODUCTION  OR  MODIFICATION  OF
DIGITAL GAMING MEDIA. IN ADDITION, SALARIES OR OTHER INCOME DISTRIBUTION
RELATED  TO  THE  CREATION  OF  DIGITAL  GAMING MEDIA FOR ANY PERSON WHO
SERVES IN THE ROLE OF CHIEF EXECUTIVE OFFICER, CHIEF FINANCIAL  OFFICER,
PRESIDENT,  TREASURER  OR  SIMILAR  POSITION  SHALL  NOT  BE INCLUDED AS
DIGITAL GAMING MEDIA PRODUCTION COSTS. FURTHERMORE, ANY INCOME OR  OTHER
DISTRIBUTION  TO  ANY  INDIVIDUAL  WHO  HOLDS AN OWNERSHIP INTEREST IN A
DIGITAL GAMING MEDIA PRODUCTION ENTITY SHALL NOT BE INCLUDED AS  DIGITAL
GAMING MEDIA PRODUCTION COSTS.
(3)  "QUALIFIED  DIGITAL  GAMING MEDIA PRODUCTION COSTS" MEANS DIGITAL
GAMING MEDIA PRODUCTION COSTS ONLY TO THE EXTENT SUCH COSTS ARE  ATTRIB-
UTABLE  TO  THE  USE  OF  PROPERTY OR THE PERFORMANCE OF SERVICES BY ANY
PERSONS WITHIN THE STATE DIRECTLY AND  PREDOMINANTLY  IN  THE  CREATION,
PRODUCTION  OR  MODIFICATION OF DIGITAL GAMING RELATED MEDIA. SUCH TOTAL
PRODUCTION COSTS INCURRED AND PAID IN THIS STATE SHALL BE  EQUAL  TO  OR
S. 2966                             6
EXCEED  SEVENTY-FIVE  PERCENT  OF  TOTAL  COST OF AN ELIGIBLE PRODUCTION
(D)  CROSS-REFERENCES.  FOR  APPLICATION OF THE CREDIT PROVIDED FOR IN
(1) ARTICLE NINE-A: SECTION TWO HUNDRED TEN-B, SUBDIVISION FIFTY-FOUR.
GRAPH ONE, SUBPARAGRAPH (B), CLAUSE (XLV).
(3) ARTICLE TWENTY-TWO: SECTION SIX HUNDRED SIX, SUBSECTION (KKK).
§ 6. Section 210-B of the tax law is amended by adding a new  subdivi-
sion 54 to read as follows:
54. EMPIRE STATE DIGITAL GAMING MEDIA PRODUCTION CREDIT. (A) ALLOWANCE
OF  CREDIT. A TAXPAYER WHO IS ELIGIBLE PURSUANT TO SECTION FORTY-FIVE OF
THIS CHAPTER SHALL BE ALLOWED A CREDIT TO BE  COMPUTED  AS  PROVIDED  IN
SUCH SECTION FORTY-FIVE AGAINST THE TAX IMPOSED BY THIS ARTICLE.
FOR ANY TAXABLE YEAR SHALL NOT REDUCE THE TAX DUE FOR SUCH YEAR TO  LESS
THAN  THE  AMOUNT  PRESCRIBED  IN  PARAGRAPH  (D)  OF SUBDIVISION ONE OF
SECTION TWO HUNDRED TEN OF THIS ARTICLE. PROVIDED, HOWEVER, THAT IF  THE
AMOUNT  OF  THE  CREDIT ALLOWABLE UNDER THIS SUBDIVISION FOR ANY TAXABLE
YEAR REDUCES THE TAX TO SUCH AMOUNT, THE EXCESS SHALL BE TREATED  AS  AN
§ 7. Subparagraph (B) of paragraph 1 of subsection (i) of section  606
of  the  tax  law  is  amended  by  adding a new clause (xlv) to read as
(XLV) EMPIRE STATE DIGITAL           AMOUNT OF CREDIT
GAMING MEDIA PRODUCTION              UNDER SUBDIVISION
CREDIT UNDER SUBSECTION (KKK)        FIFTY-FOUR OF SECTION
TWO HUNDRED TEN-B
§ 8. Section 606 of the tax law is amended by adding a new  subsection
(kkk) to read as follows:
(KKK)  EMPIRE STATE DIGITAL GAMING MEDIA PRODUCTION CREDIT. (1) ALLOW-
ANCE OF CREDIT. A TAXPAYER WHO IS ELIGIBLE PURSUANT  TO  SECTION  FORTY-
FIVE  OF  THIS  CHAPTER  SHALL  BE  ALLOWED  A  CREDIT TO BE COMPUTED AS
PROVIDED IN SUCH SECTION FORTY-FIVE AGAINST  THE  TAX  IMPOSED  BY  THIS
ED  OR  REFUNDED  AS  PROVIDED IN SECTION SIX HUNDRED EIGHTY-SIX OF THIS
§ 9. The state commissioner of economic development, after  consulting
with  the  state  commissioner of taxation and finance, shall promulgate
regulations by December 31, 2019 to establish procedures for  the  allo-
cation  of  tax credits as required by subdivision (a) of section 44 and
subdivision (a) of section 45 of the tax law. Such rules and regulations
shall include provisions describing the  application  process,  the  due
dates for such applications, the standards which shall be used to evalu-
ate the applications, the documentation that will be provided to taxpay-
ers  substantiate  to  the  New  York  state  department of taxation and
finance the amount of tax credits allocated  to  such  taxpayers,  under
what  conditions all or a portion of this tax credit may be revoked, and
such other provisions as deemed necessary and appropriate. Notwithstand-
ing any other provisions to the contrary  in  the  state  administrative
S. 2966                             7
procedure act, such rules and regulations may be adopted on an emergency
basis if necessary to meet such December 31, 2019 deadline.
§ 10. Subdivision 13 of section 352 of the economic development law is
§  11. Subdivisions 1, 3 and 5 of section 353 of the economic develop-
ment law, subdivisions 1 and 3 as amended by section  2  of  part  K  of
chapter  59  of the laws of 2017, subdivision 3 as separately amended by
section 2 of part ZZ of chapter 59 of the laws of 2017 and subdivision 5
as amended by section 2 of part K of chapter 59 of the laws of 2015, are
1. To be a participant in the excelsior jobs program, a business enti-
ty shall operate in New York state predominantly:
(a) as a financial services data center or a financial  services  back
office operation;
(b) in manufacturing;
(c) in software development and new media;
(d) in scientific research and development;
(e) in agriculture;
(f)  in  the  creation  or  expansion of back office operations in the
(g) in a distribution center;
(h) in an  industry  with  significant  potential  for  private-sector
economic  growth  and  development  in  this state as established by the
commissioner in regulations promulgated pursuant  to  this  article.  In
promulgating  such  regulations  the  commissioner shall include job and
investment criteria;
(i) as an entertainment company; OR
(j) [in music production; or
(k)] as a life sciences company.
3. For the purposes of this article, in order to  participate  in  the
excelsior  jobs  program,  a  business entity operating predominantly in
manufacturing must create at least five net new jobs; a business  entity
operating predominately in agriculture must create at least five net new
jobs;  a  business entity operating predominantly as a financial service
data center or financial services customer back  office  operation  must
create  at  least  twenty-five net new jobs; a business entity operating
predominantly in scientific research  and  development  must  create  at
least  five  net  new jobs; a business entity operating predominantly in
software development must create at least five net new jobs; a  business
entity creating or expanding back office operations must create at least
twenty-five  net new jobs; [a business entity operating predominately in
music production must create at least five net  new  jobs;]  a  business
entity  operating  predominantly as an entertainment company must create
or obtain at least one hundred net new jobs; or a business entity  oper-
ating predominantly as a distribution center in the state must create at
least  fifty  net  new  jobs,  notwithstanding  subdivision five of this
section; or a business entity operating predominately as a life sciences
company must create at least five net new jobs;  or  a  business  entity
must be a regionally significant project as defined in this article; or
5.  A  not-for-profit business entity, a business entity whose primary
function is the provision of services including personal services, busi-
ness services, or the provision of  utilities,  and  a  business  entity
engaged  predominantly  in  the  retail or entertainment industry, other
than a business operating as an entertainment company as defined in this
article [and other than a business entity engaged in music  production],
and  a company engaged in the generation or distribution of electricity,
S. 2966                             8
the distribution of natural gas, or the production of  steam  associated
with  the  generation of electricity are not eligible to receive the tax
credit described in this article.
§  12.  Subdivision 23 of section 352 of the economic development law,
as amended by section 1 of part K of chapter 59 of the laws of 2017,  is
23.  "Software  development"  means  the  creation  of  coded computer
instructions [or  production  or  post-production  of  video  games,  as
defined in subdivision one-a of section six hundred eleven of the gener-
al  business  law,  other  than  those  embedded and used exclusively in
advertising, promotional websites or microsites,]  and  [also]  includes
new media as defined by the commissioner in regulations.
§  13. The economic development law is amended by adding a new section
243 to read as follows:
§ 243. REPORTS ON THE MUSIC AND DIGITAL GAMING INDUSTRIES IN NEW YORK.
1. THE EMPIRE STATE DEVELOPMENT CORPORATION SHALL FILE  A  REPORT  ON  A
BIANNUAL  BASIS  WITH THE DIRECTOR OF THE DIVISION OF THE BUDGET AND THE
CHAIRPERSONS OF THE ASSEMBLY WAYS AND MEANS COMMITTEE AND SENATE FINANCE
COMMITTEE. THE REPORT SHALL BE FILED NO LATER THAN  THIRTY  DAYS  BEFORE
THE  MID-POINT  AND  THE  END OF THE STATE FISCAL YEAR. THE FIRST REPORT
SHALL COVER THE CALENDAR HALF YEAR THAT BEGINS  ON  JANUARY  FIRST,  TWO
THOUSAND  TWENTY-ONE. EACH REPORT MUST CONTAIN THE FOLLOWING INFORMATION
FOR THE COVERED CALENDAR HALF YEAR:
(A) THE TOTAL DOLLAR AMOUNT OF CREDITS ALLOCATED PURSUANT TO  SECTIONS
FORTY-FOUR  AND  FORTY-FIVE  OF THE TAX LAW DURING THE HALF YEAR, BROKEN
DOWN BY MONTH;
(B) THE NUMBER OF MUSIC AND DIGITAL GAMING PROJECTS, WHICH  HAVE  BEEN
ALLOCATED  TAX CREDITS OF LESS THAN ONE MILLION DOLLARS PER PROJECT, AND
THE TOTAL DOLLAR AMOUNT OF CREDITS ALLOCATED TO THOSE PROJECTS  DISTRIB-
UTED  BY  REGION  PURSUANT TO SUBDIVISION (B) OF SECTIONS FORTY-FOUR AND
FORTY-FIVE OF THE TAX LAW;
(C) THE NUMBER OF MUSIC AND DIGITAL GAMING PROJECTS, WHICH  HAVE  BEEN
ALLOCATED  TAX  CREDITS  OF MORE THAN ONE MILLION DOLLARS, AND THE TOTAL
DOLLAR AMOUNT OF CREDITS ALLOCATED  TO  THOSE  PROJECTS  DISTRIBUTED  BY
REGION PURSUANT TO SUBDIVISION (B) OF SECTIONS FORTY-FOUR AND FORTY-FIVE
OF THE TAX LAW;
(D)  A  LIST  OF EACH ELIGIBLE MUSIC AND DIGITAL GAMING PROJECT, WHICH
HAS BEEN ALLOCATED A TAX CREDIT ENUMERATED BY REGION PURSUANT TO  SUBDI-
VISION (B) OF SECTIONS FORTY-FOUR AND FORTY-FIVE OF THE TAX LAW, AND FOR
EACH OF THOSE PROJECTS, (I) THE ESTIMATED NUMBER OF EMPLOYEES ASSOCIATED
WITH  THE PROJECT, (II) THE ESTIMATED QUALIFYING COSTS FOR THE PROJECTS,
(III) THE ESTIMATED TOTAL COSTS OF THE PROJECT, (IV) THE CREDIT ELIGIBLE
EMPLOYEE HOURS FOR EACH PROJECT, AND (V) TOTAL  WAGES  FOR  SUCH  CREDIT
ELIGIBLE EMPLOYEE HOURS FOR EACH PROJECT; AND
(E)  (I)  THE  NAME  OF  EACH TAXPAYER ALLOCATED A TAX CREDIT FOR EACH
PROJECT AND THE COUNTY OF RESIDENCE OR INCORPORATION  OF  SUCH  TAXPAYER
OR,  IF THE TAXPAYER DOES NOT RESIDE OR IS NOT INCORPORATED IN NEW YORK,
THE STATE OF RESIDENCE OR INCORPORATION; HOWEVER, IF THE TAXPAYER CLAIMS
A TAX CREDIT BECAUSE THE TAXPAYER IS A MEMBER  OF  A  LIMITED  LIABILITY
COMPANY,  A  PARTNER IN A PARTNERSHIP OR A SHAREHOLDER IN A SUBCHAPTER S
CORPORATION, THE NAME OF EACH LIMITED LIABILITY COMPANY, PARTNERSHIP  OR
SUBCHAPTER  S  CORPORATION  EARNING  ANY  OF  THOSE  TAX CREDITS MUST BE
INCLUDED IN THE REPORT INSTEAD OF INFORMATION ABOUT THE TAXPAYER  CLAIM-
ING  THE  TAX  CREDIT,  (II)  THE AMOUNT OF TAX CREDIT ALLOCATED TO EACH
TAXPAYER; PROVIDED HOWEVER, IF THE TAXPAYER CLAIMS A TAX CREDIT  BECAUSE
THE  TAXPAYER IS A MEMBER OF A LIMITED LIABILITY COMPANY, A PARTNER IN A
S. 2966                             9
PARTNERSHIP OR A SHAREHOLDER IN A SUBCHAPTER S CORPORATION,  THE  AMOUNT
OF  TAX  CREDIT  EARNED  BY  EACH  ENTITY MUST BE INCLUDED IN THE REPORT
INSTEAD OF INFORMATION ABOUT THE TAXPAYER CLAIMING THE TAX  CREDIT,  AND
(III)  INFORMATION IDENTIFYING THE PROJECT ASSOCIATED WITH EACH TAXPAYER
FOR WHICH A TAX CREDIT WAS CLAIMED UNDER SECTION  FORTY-FOUR  OR  FORTY-
FIVE OF THE TAX LAW.
2.  THE  EMPIRE STATE DEVELOPMENT CORPORATION SHALL FILE A REPORT ON A
TRIENNIAL BASIS WITH THE DIRECTOR OF THE DIVISION OF THE BUDGET AND  THE
COMMITTEE.  THE  FIRST  REPORT SHALL BE FILED NO LATER THAN MARCH FIRST,
TWO THOUSAND TWENTY-THREE. THE REPORT MUST BE PREPARED BY AN INDEPENDENT
THIRD PARTY AUDITOR AND INCLUDE: (A) INFORMATION  REGARDING  THE  EMPIRE
STATE  MUSIC  PRODUCTION  CREDIT  AND  THE  EMPIRE  STATE DIGITAL GAMING
PRODUCTION CREDIT PROGRAMS INCLUDING THE EFFICIENCY OF OPERATIONS, RELI-
ABILITY OF FINANCIAL REPORTING, COMPLIANCE WITH LAWS AND REGULATIONS AND
DISTRIBUTION OF ASSETS AND FUNDS; (B) AND ECONOMIC IMPACT STUDY PREPARED
BY AN INDEPENDENT THIRD PARTY OF THE PROGRAM WITH  SPECIAL  EMPHASIS  ON
THE  REGIONAL  IMPACT  BY  REGION AND THE TOTAL DOLLAR AMOUNT OF CREDITS
ALLOCATED TO THOSE PROJECTS DISTRIBUTED BY REGION PURSUANT  TO  SUBDIVI-
SION  (B)  OF SECTIONS FORTY-FOUR AND FORTY-FIVE OF THE TAX LAW; AND (C)
ANY OTHER INFORMATION OR STATISTICAL INFORMATION THAT  THE  COMMISSIONER
OF  ECONOMIC  DEVELOPMENT DEEMS TO BE USEFUL IN ANALYZING THE EFFECTS OF
§ 14. This act shall take effect immediately and shall apply to  taxa-
ble  years  beginning  on  January  1,  2020 and before January 1, 2025;
provided that sections one through eight of this act shall expire and be
deemed repealed December 31, 2024.