S T A T E   O F   N E W   Y O R K
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                                  5998

                       2009-2010 Regular Sessions

                            I N  S E N A T E

                              June 19, 2009
                               ___________

Introduced  by  Sen.  KLEIN  -- read twice and ordered printed, and when
  printed to be committed to the Committee on Rules

AN ACT to amend the tax law, in relation to  the  commercial  production
  credit

  THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section 1. Subparagraph (i) of  paragraph  2  of  subdivision  (a)  of
section  28  of  the  tax  law, as amended by chapter 300 of the laws of
2007, is amended to read as follows:
  (i) The state annually will disburse three million of the total  seven
million  in  tax  credits  to  all eligible production companies and 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) of twenty percent of
the qualified production costs paid or incurred in the production  of  a
qualified  commercial, provided that the qualified production costs paid
or incurred are attributable to the use  of  tangible  property  or  the
performance of services within the state in the production of such qual-
ified  commercial.  To  be  eligible for said credit the total qualified
production costs of a qualified production company must  be  greater  in
the  aggregate  during the current calendar year than the average of the
three previous years for which the credit was applied. Provided,  howev-
er,  that  until  a qualified production company has established a three
year history, the credit will be based on either the  previous  year  or
the  average of the two previous years, whichever [is greater] PERIOD IS
LONGER FOR THE QUALIFIED PRODUCTION COMPANY SEEKING THE CREDIT.  If  the
qualified  production  company  has never applied for the growth credit,
the previous [years] YEAR'S data will be used to create a benchmark. The
tax credit shall be applied only to the amount of  the  total  qualified
production  costs of the current calendar year that are greater than the
total amount of production costs of the [preceding calendar year] APPRO-
PRIATE MEASUREMENT PERIOD AS DESCRIBED IN  THIS  SUBPARAGRAPH.  The  tax

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD11186-04-9
              

S. 5998                             2

credit  must  be  distributed  to eligible production companies on a pro
rata basis, provided, however, that no such qualified production company
shall receive more than three hundred thousand dollars annually for such
credit.  The  credit  shall be allowed for the taxable year in which the
production of such qualified commercial is completed.
  S 2. Paragraph 2 of subdivision (b) of section 28 of the tax  law,  as
amended  by  chapter  440  of  the  laws  of 2006, is amended to read as
follows:
  (2) "Production costs" means any costs for tangible property used  and
services performed directly and predominantly in the production (includ-
ing  pre-production  and  post-production)  of  a  qualified commercial.
"Production costs" shall not include (i) costs for a  story,  script  or
scenario  to  be used for a qualified commercial and (ii) wages or sala-
ries or other  compensation  for  writers,  directors,  including  music
directors,  producers  and performers (other than background actors with
no scripted lines who are employed by  a  qualified  company  and  musi-
cians).   "Production   costs"  generally  include  technical  and  crew
production costs, such as expenditures for commercial production facili-
ties and/or location costs, or any part thereof, film, audiotape,  vide-
otape or digital medium, props, makeup, wardrobe, commercial processing,
camera,  sound recording, scoring, set construction, lighting, shooting,
editing and meals. For purposes of this section, "post production costs"
include the production of original content for  a  qualified  commercial
employing  techniques  traditionally  used in post-production for visual
effects, graphic design, animation, and musical composition.    HOWEVER,
WHERE  THE  COMMERCIAL  CONSISTS  IN  ITS ENTIRETY OF TECHNIQUES SUCH AS
VISUAL EFFECTS, GRAPHIC DESIGN, OR ANIMATION, SUCH COSTS INCURRED IN THE
PRODUCTION OF THE COMMERCIAL, WHEN  OCCURRING  IN  NEW  YORK,  SHALL  BE
DEEMED  QUALIFIED  PRODUCTION  COSTS  FOR  THE PURPOSES OF THIS SECTION.
Provided FURTHER,  however,  that  "post  production  costs"  shall  not
include  the  editing  of  previously  produced  content for a qualified
commercial.
  S 3. This act shall take effect immediately, provided,  however,  that
the amendments to section 28 of the tax law made by sections one and two
of this act shall not affect the expiration of such section and shall be
deemed to expire therewith.