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

                                  7485

                            I N  S E N A T E

                               May 4, 2016
                               ___________

Introduced  by  Sen.  GOLDEN -- read twice and ordered printed, and when
  printed to be committed to the Committee on Investigations and Govern-
  ment Operations

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;  and  to
  repeal  subdivision  11 of section 352 of the economic development law
  relating thereto

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

  Section  1.  The tax law is amended by adding a new section 43 to read
as follows:
  S 43. 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
PARAGRAPH TWO OF THIS SUBDIVISION.
  (4) NO ELIGIBLE PRODUCTION COSTS CLAIMED BY A TAXPAYER  AS  THE  BASIS
FOR  THE  CREDIT  UNDER  THIS  SECTION SHALL BE USED BY SUCH TAXPAYER TO
CLAIM ANY OTHER CREDIT PURSUANT TO THIS CHAPTER.
  (B) ALLOCATION OF CREDIT. THE AGGREGATE AMOUNT OF TAX CREDITS  ALLOWED
UNDER  THIS  SECTION, SUBDIVISION FIFTY-TWO OF SECTION TWO HUNDRED TEN-B
AND SUBSECTION (FFF) OF SECTION SIX HUNDRED SIX OF THIS CHAPTER  IN  ANY

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

                                                           LBD15150-02-6

S. 7485                             2

TAXABLE YEAR SHALL BE TWENTY-FIVE MILLION DOLLARS. SUCH AGGREGATE AMOUNT
OF  CREDITS  SHALL  BE  ALLOCATED BY THE EMPIRE STATE DEVELOPMENT CORPO-
RATION AMONG TAXPAYERS IN ORDER OF  PRIORITY  BASED  UPON  THE  DATE  OF
FILING  AN  APPLICATION  FOR ALLOCATION OR 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 TAXABLE YEAR.
  (C) DEFINITIONS. AS USED IN THIS SECTION:
  (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
PARAGRAPH.
  (3) "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 DETERMINED 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  PROGRAMMERS,  ENGINEERS,
AND  TECHNICIANS,  (IV)  MIXING  AND  MASTERING  SERVICES, AND (V) LOCAL
TRANSPORTATION EXPENDITURES DIRECTLY RELATED  TO  MUSIC  PRODUCTION  AND
PROVIDED AT OR TO THE SITE OF SUCH MUSIC PRODUCTION. ELIGIBLE PRODUCTION
COSTS  SHALL  NOT  INCLUDE:  (I) COSTS FOR TANGIBLE PROPERTY OR SERVICES
USED OR PERFORMED OUTSIDE OF  THIS  STATE,  (II)  PERFORMANCE  FEES  FOR
ARTISTS,  (III)  SALARIES OR RELATED COMPENSATION FOR PRODUCERS OR SONG-
WRITERS,  (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, OR (VIII) ANY COSTS ASSOCIATED WITH  MANUFACTURING,  DUPLICATION,
PACKAGING,  DISTRIBUTION,  PROMOTION,  MARKETING  OR TOURING NOT SPECIF-
ICALLY OUTLINED IN THIS SUBPARAGRAPH. 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) REPORTING. THE DEPARTMENT OF ECONOMIC DEVELOPMENT SHALL SUBMIT  AN
ANNUAL  REPORT,  ON OR BEFORE DECEMBER FIRST OF EACH YEAR, TO THE GOVER-
NOR, THE DIRECTOR OF THE DIVISION OF THE BUDGET, THE TEMPORARY PRESIDENT
OF THE SENATE, AND THE SPEAKER  OF  THE  ASSEMBLY,  INCLUDING,  BUT  NOT
LIMITED  TO,  THE  FOLLOWING INFORMATION REGARDING THE PREVIOUS CALENDAR
YEAR REGIONALLY, FOR ACTIVITY WITHIN AND WITHOUT THE METROPOLITAN COMMU-
TER TRANSPORTATION DISTRICT; THE TOTAL DOLLAR AMOUNT  OF  CREDITS  ALLO-
CATED,  THE  NAME  AND  ADDRESS OF EACH ELIGIBLE MUSIC PRODUCTION ENTITY
ALLOCATED CREDITS UNDER THIS SECTION, AND THE TOTAL  AMOUNT  OF  CREDITS

S. 7485                             3

ALLOCATED  TO EACH ELIGIBLE MUSIC PRODUCTION ENTITY. THE REPORT MAY ALSO
INCLUDE ANY RECOMMENDATIONS FOR CHANGES IN THE CALCULATION  OR  ADMINIS-
TRATION  OF  THE CREDIT, AND ANY OTHER INFORMATION REGARDING THIS CREDIT
AS MAY BE USEFUL AND APPROPRIATE.
  (E)  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-TWO.
  (2) ARTICLE TWENTY-TWO: SECTION SIX HUNDRED SIX, SUBSECTION (I), PARA-
GRAPH ONE, SUBPARAGRAPH (B), CLAUSE (XLIII).
  (3) ARTICLE TWENTY-TWO: SECTION SIX HUNDRED SIX, SUBSECTION (FFF).
  S 2. Section 210-B of the tax law is amended by adding a new  subdivi-
sion 52 to read as follows:
  52.  EMPIRE  STATE MUSIC PRODUCTION CREDIT. (A) ALLOWANCE OF CREDIT. A
TAXPAYER WHO IS ELIGIBLE PURSUANT TO SECTION FORTY-THREE OF THIS CHAPTER
SHALL BE ALLOWED A CREDIT TO BE COMPUTED AS  PROVIDED  IN  SUCH  SECTION
FORTY-THREE AGAINST THE TAX IMPOSED BY THIS ARTICLE.
  (B)  APPLICATION  OF CREDIT. THE CREDIT ALLOWED UNDER THIS SUBDIVISION
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.
  S 3. Subparagraph (B) of paragraph 1 of subsection (i) of section  606
of  the  tax  law  is  amended by adding a new clause (xliii) to read as
follows:

(XLIII) EMPIRE STATE MUSIC              AMOUNT OF CREDIT
PRODUCTION CREDIT UNDER                 UNDER SUBDIVISION
SUBSECTION (FFF)                        FIFTY-TWO OF SECTION TWO HUNDRED
                                        TEN-B

  S 4. Section 606 of the tax law is amended by adding a new  subsection
(fff) to read as follows:
  (FFF) EMPIRE STATE MUSIC PRODUCTION CREDIT. (1) ALLOWANCE OF CREDIT. A
TAXPAYER WHO IS ELIGIBLE PURSUANT TO SECTION FORTY-THREE OF THIS CHAPTER
SHALL  BE  ALLOWED  A  CREDIT TO BE COMPUTED AS PROVIDED IN SUCH SECTION
FORTY-THREE AGAINST THE TAX IMPOSED BY THIS ARTICLE.
  (2) APPLICATION OF CREDIT. IF THE AMOUNT OF THE CREDIT ALLOWABLE UNDER
THIS SUBSECTION FOR ANY TAXABLE YEAR EXCEEDS THE TAXPAYER'S TAX FOR SUCH
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
ARTICLE, PROVIDED, HOWEVER, THAT NO INTEREST SHALL BE PAID THEREON.
  S  5.  The  tax  law  is amended by adding a new section 44 to read as
follows:
  S 44. 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.

S. 7485                             4

  (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-
SION.
  (4) NO ELIGIBLE PRODUCTION COSTS CLAIMED BY A TAXPAYER  AS  THE  BASIS
FOR  THE  CREDIT  UNDER  THIS  SECTION SHALL BE USED BY SUCH TAXPAYER TO
CLAIM ANY OTHER CREDIT PURSUANT TO THIS CHAPTER.
  (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  (GGG) OF SECTION SIX HUNDRED SIX OF THIS CHAPTER IN ANY
TAXABLE YEAR SHALL BE TWENTY-FIVE MILLION DOLLARS. SUCH AGGREGATE AMOUNT
OF CREDITS SHALL BE ALLOCATED BY THE  EMPIRE  STATE  DEVELOPMENT  CORPO-
RATION  AMONG  TAXPAYERS  IN  ORDER  OF  PRIORITY 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 SECTION, SUCH EXCESS SHALL BE
TREATED AS HAVING BEEN APPLIED FOR ON THE FIRST DAY  OF  THE  SUBSEQUENT
TAXABLE YEAR.
  (C) DEFINITIONS. AS USED IN THIS SECTION:
  (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 SERVICES  PERFORMED  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 PREDOMI-

S. 7485                             5

NATELY  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 MORE THAN A FIVE PERCENT OWNER-
SHIP 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
EXCEED  SEVENTY-FIVE  PERCENT  OF  TOTAL  COST OF AN ELIGIBLE PRODUCTION
INCURRED AND PAID WITHIN AND WITHOUT THIS STATE.
  (D) REPORTING. THE DEPARTMENT OF ECONOMIC DEVELOPMENT SHALL SUBMIT  AN
ANNUAL  REPORT,  ON OR BEFORE DECEMBER FIRST OF EACH YEAR, TO THE GOVER-
NOR, THE DIRECTOR OF THE DIVISION OF THE BUDGET, THE TEMPORARY PRESIDENT
OF THE SENATE, AND THE SPEAKER  OF  THE  ASSEMBLY,  INCLUDING,  BUT  NOT
LIMITED  TO,  THE  FOLLOWING INFORMATION REGARDING THE PREVIOUS CALENDAR
YEAR REGIONALLY, FOR ACTIVITY WITHIN AND WITHOUT THE METROPOLITAN COMMU-
TER TRANSPORTATION DISTRICT; THE TOTAL DOLLAR AMOUNT  OF  CREDITS  ALLO-
CATED,  THE  NAME  AND  ADDRESS  OF  EACH  ELIGIBLE DIGITAL GAMING MEDIA
PRODUCTION ENTITY ALLOCATED CREDITS UNDER THIS SECTION,  AND  THE  TOTAL
AMOUNT  OF  CREDITS  ALLOCATED  TO  EACH  ELIGIBLE  DIGITAL GAMING MEDIA
PRODUCTION ENTITY. THE REPORT MAY ALSO INCLUDE ANY  RECOMMENDATIONS  FOR
CHANGES  IN  THE  CALCULATION  OR  ADMINISTRATION OF THE CREDIT, AND ANY
OTHER INFORMATION REGARDING THIS CREDIT AS MAY BE USEFUL  AND  APPROPRI-
ATE.
  (E)  CROSS-REFERENCES.  FOR  APPLICATION 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-THREE.
  (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 (GGG).
  S  6. Section 210-B of the tax law is amended by adding a new subdivi-
sion 53 to read as follows:
  53. EMPIRE STATE DIGITAL GAMING MEDIA 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.
  (B) APPLICATION OF CREDIT. THE CREDIT ALLOWED UNDER  THIS  SUBDIVISION
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

S. 7485                             6

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.
  S  7. 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
follows:

(XLIV) EMPIRE STATE DIGITAL          AMOUNT OF CREDIT
GAMING MEDIA PRODUCTION              UNDER SUBDIVISION
CREDIT UNDER SUBSECTION (GGG)        FIFTY-THREE OF SECTION
                                     TWO HUNDRED TEN-B
  S  8. Section 606 of the tax law is amended by adding a new subsection
(ggg) to read as follows:
  (GGG) EMPIRE STATE DIGITAL GAMING MEDIA PRODUCTION CREDIT. (1)  ALLOW-
ANCE  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.
  (2) APPLICATION OF CREDIT. IF THE AMOUNT OF THE CREDIT ALLOWABLE UNDER
THIS SUBSECTION FOR ANY TAXABLE YEAR EXCEEDS THE TAXPAYER'S TAX FOR SUCH
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
ARTICLE, PROVIDED, HOWEVER, THAT NO INTEREST SHALL BE PAID THEREON.
  S  9. The state commissioner of economic development, after consulting
with the state commissioner of taxation and  finance,  shall  promulgate
regulations  by  December 31, 2016 to establish procedures for the allo-
cation of tax credits as required by subdivision (a) of section  43  and
subdivision (a) of section 44 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
procedure act, such rules and regulations may be adopted on an emergency
basis if necessary to meet such December 31, 2016 deadline.
  S 10. Subdivision 11 of section 352 of the economic development law is
REPEALED.
  S 11. Subdivisions 1, 3 and 5 of section 353 of the economic  develop-
ment law, as amended by section 2 of part K of chapter 59 of the laws of
2015, are amended to read as follows:
  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
state;
  (g) in a distribution center;

S. 7485                             7

  (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; OR
  (i) as an entertainment company[; or
  (j) in music production].
  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 ten 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 fifty net new jobs; a business entity operating predomi-
nantly 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 fifty
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 operating
predominantly as a distribution center in the state must create at least
seventy-five  net  new  jobs,  notwithstanding  subdivision five of this
section; 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,
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.
  S 12. Subdivision 21 of section 352 of the economic  development  law,
as  amended by section 1 of part K of chapter 59 of the laws of 2015, is
amended to read as follows:
  21. "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.
  S 13. This act shall take effect immediately and shall apply to  taxa-
ble years beginning on or after January 1, 2016.

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

                                 7485--A

                            I N  S E N A T E

                               May 4, 2016
                               ___________

Introduced  by  Sen.  GOLDEN -- read twice and ordered printed, and when
  printed to be committed to the Committee on Investigations and Govern-
  ment  Operations  --  committee  discharged,  bill  amended,   ordered
  reprinted as amended and recommitted to said committee

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; and to
  repeal subdivision 11 of section 352 of the economic  development  law
  relating thereto

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

  Section 1. The tax law is amended by adding a new section 43  to  read
as follows:
  S  43.  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
PARAGRAPH TWO OF THIS SUBDIVISION.
  (4)  NO  ELIGIBLE  PRODUCTION COSTS CLAIMED BY A TAXPAYER AS THE BASIS
FOR THE CREDIT UNDER THIS SECTION SHALL BE  USED  BY  SUCH  TAXPAYER  TO
CLAIM ANY OTHER CREDIT PURSUANT TO THIS CHAPTER.
  (B)  ALLOCATION OF CREDIT. THE AGGREGATE AMOUNT OF TAX CREDITS ALLOWED
UNDER THIS SECTION, SUBDIVISION FIFTY-TWO OF SECTION TWO  HUNDRED  TEN-B

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

                                                           LBD15150-03-6

S. 7485--A                          2

AND  SUBSECTION  (FFF) OF SECTION SIX HUNDRED SIX OF THIS CHAPTER IN ANY
TAXABLE YEAR SHALL BE TWENTY-FIVE MILLION DOLLARS. SUCH AGGREGATE AMOUNT
OF CREDITS SHALL BE ALLOCATED BY THE  EMPIRE  STATE  DEVELOPMENT  CORPO-
RATION  AMONG  TAXPAYERS  IN  ORDER  OF  PRIORITY BASED UPON THE DATE OF
FILING AN APPLICATION FOR ALLOCATION OR 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 TAXABLE YEAR.
  (C) DEFINITIONS. AS USED IN THIS SECTION:
  (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
PARAGRAPH.
  (3)  "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  DETERMINED  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, (IV) MIXING AND MASTERING SERVICES, AND  (V)
LOCAL  TRANSPORTATION  EXPENDITURES DIRECTLY RELATED TO MUSIC PRODUCTION
AND PROVIDED AT OR TO  THE  SITE  OF  SUCH  MUSIC  PRODUCTION.  ELIGIBLE
PRODUCTION  COSTS  SHALL NOT INCLUDE: (I) COSTS FOR TANGIBLE PROPERTY OR
SERVICES USED OR PERFORMED OUTSIDE OF THIS STATE, (II) PERFORMANCE  FEES
FOR  FEATURED  ARTISTS  OR FEATURED GUEST ARTISTS RECEIVING ROYALTIES OR
ADVANCES ON ROYALTIES OR SPECIAL PERFORMANCE FEES (OTHER THAN THOSE THAT
WOULD NORMALLY BE COLLECTED BY A PERFORMING RIGHTS ORGANIZATION)  PURSU-
ANT  TO AN AGREEMENT DIRECTLY WITH THE PRODUCER OR EMPLOYER, (III) SALA-
RIES OR RELATED COMPENSATION FOR PRODUCERS OR SONGWRITERS, (IV)  COMPOS-
ER,  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, OR (VIII) ANY  COSTS
ASSOCIATED  WITH  MANUFACTURING,  DUPLICATION,  PACKAGING, DISTRIBUTION,
PROMOTION, MARKETING  OR  TOURING  NOT  SPECIFICALLY  OUTLINED  IN  THIS
SUBPARAGRAPH.  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) REPORTING. THE DEPARTMENT OF ECONOMIC DEVELOPMENT SHALL SUBMIT  AN
ANNUAL  REPORT,  ON OR BEFORE DECEMBER FIRST OF EACH YEAR, TO THE GOVER-
NOR, THE DIRECTOR OF THE DIVISION OF THE BUDGET, THE TEMPORARY PRESIDENT
OF THE SENATE, AND THE SPEAKER  OF  THE  ASSEMBLY,  INCLUDING,  BUT  NOT

S. 7485--A                          3

LIMITED  TO,  THE  FOLLOWING INFORMATION REGARDING THE PREVIOUS CALENDAR
YEAR REGIONALLY, FOR ACTIVITY WITHIN AND WITHOUT THE METROPOLITAN COMMU-
TER TRANSPORTATION DISTRICT; THE TOTAL DOLLAR AMOUNT  OF  CREDITS  ALLO-
CATED,  THE  NAME  AND  ADDRESS OF EACH ELIGIBLE MUSIC PRODUCTION ENTITY
ALLOCATED CREDITS UNDER THIS SECTION, AND THE TOTAL  AMOUNT  OF  CREDITS
ALLOCATED  TO EACH ELIGIBLE MUSIC PRODUCTION ENTITY. THE REPORT MAY ALSO
INCLUDE ANY RECOMMENDATIONS FOR CHANGES IN THE CALCULATION  OR  ADMINIS-
TRATION  OF  THE CREDIT, AND ANY OTHER INFORMATION REGARDING THIS CREDIT
AS MAY BE USEFUL AND APPROPRIATE.
  (E) 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-TWO.
  (2) ARTICLE TWENTY-TWO: SECTION SIX HUNDRED SIX, SUBSECTION (I), PARA-
GRAPH ONE, SUBPARAGRAPH (B), CLAUSE (XLIII).
  (3) ARTICLE TWENTY-TWO: SECTION SIX HUNDRED SIX, SUBSECTION (FFF).
  S  2. Section 210-B of the tax law is amended by adding a new subdivi-
sion 52 to read as follows:
  52. EMPIRE STATE MUSIC PRODUCTION CREDIT. (A) ALLOWANCE OF  CREDIT.  A
TAXPAYER WHO IS ELIGIBLE PURSUANT TO SECTION FORTY-THREE OF THIS CHAPTER
SHALL  BE  ALLOWED  A  CREDIT TO BE COMPUTED AS PROVIDED IN SUCH SECTION
FORTY-THREE AGAINST THE TAX IMPOSED BY THIS ARTICLE.
  (B) APPLICATION OF CREDIT. THE CREDIT ALLOWED UNDER  THIS  SUBDIVISION
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.
  S  3. Subparagraph (B) of paragraph 1 of subsection (i) of section 606
of the tax law is amended by adding a new  clause  (xliii)  to  read  as
follows:

(XLIII) EMPIRE STATE MUSIC              AMOUNT OF CREDIT
PRODUCTION CREDIT UNDER                 UNDER SUBDIVISION
SUBSECTION (FFF)                        FIFTY-TWO OF SECTION TWO HUNDRED
                                        TEN-B

  S  4. Section 606 of the tax law is amended by adding a new subsection
(fff) to read as follows:
  (FFF) EMPIRE STATE MUSIC PRODUCTION CREDIT. (1) ALLOWANCE OF CREDIT. A
TAXPAYER WHO IS ELIGIBLE PURSUANT TO SECTION FORTY-THREE OF THIS CHAPTER
SHALL BE ALLOWED A CREDIT TO BE COMPUTED AS  PROVIDED  IN  SUCH  SECTION
FORTY-THREE AGAINST THE TAX IMPOSED BY THIS ARTICLE.
  (2) APPLICATION OF CREDIT. IF THE AMOUNT OF THE CREDIT ALLOWABLE UNDER
THIS SUBSECTION FOR ANY TAXABLE YEAR EXCEEDS THE TAXPAYER'S TAX FOR SUCH
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
ARTICLE, PROVIDED, HOWEVER, THAT NO INTEREST SHALL BE PAID THEREON.
  S 5. The tax law is amended by adding a new  section  44  to  read  as
follows:
  S  44. 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

S. 7485--A                          4

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-
SION.
  (4)  NO  ELIGIBLE  PRODUCTION COSTS CLAIMED BY A TAXPAYER AS THE BASIS
FOR THE CREDIT UNDER THIS SECTION SHALL BE  USED  BY  SUCH  TAXPAYER  TO
CLAIM ANY OTHER CREDIT PURSUANT TO THIS CHAPTER.
  (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 (GGG) OF SECTION SIX HUNDRED SIX OF THIS CHAPTER  IN  ANY
TAXABLE YEAR SHALL BE TWENTY-FIVE MILLION DOLLARS. SUCH AGGREGATE AMOUNT
OF  CREDITS  SHALL  BE  ALLOCATED BY THE EMPIRE STATE DEVELOPMENT CORPO-
RATION AMONG TAXPAYERS IN ORDER OF  PRIORITY  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 SECTION, SUCH EXCESS  SHALL  BE
TREATED  AS  HAVING  BEEN APPLIED FOR ON THE FIRST DAY OF THE SUBSEQUENT
TAXABLE YEAR.
  (C) DEFINITIONS. AS USED IN THIS SECTION:
  (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.

S. 7485--A                          5

  (2) "DIGITAL GAMING MEDIA PRODUCTION COSTS" MEANS ANY COSTS FOR  PROP-
ERTY  USED  AND  SERVICES  PERFORMED  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 PREDOMI-
NATELY  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 MORE THAN A FIVE PERCENT OWNER-
SHIP 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
EXCEED  SEVENTY-FIVE  PERCENT  OF  TOTAL  COST OF AN ELIGIBLE PRODUCTION
INCURRED AND PAID WITHIN AND WITHOUT THIS STATE.
  (D) REPORTING. THE DEPARTMENT OF ECONOMIC DEVELOPMENT SHALL SUBMIT  AN
ANNUAL  REPORT,  ON OR BEFORE DECEMBER FIRST OF EACH YEAR, TO THE GOVER-
NOR, THE DIRECTOR OF THE DIVISION OF THE BUDGET, THE TEMPORARY PRESIDENT
OF THE SENATE, AND THE SPEAKER  OF  THE  ASSEMBLY,  INCLUDING,  BUT  NOT
LIMITED  TO,  THE  FOLLOWING INFORMATION REGARDING THE PREVIOUS CALENDAR
YEAR REGIONALLY, FOR ACTIVITY WITHIN AND WITHOUT THE METROPOLITAN COMMU-
TER TRANSPORTATION DISTRICT; THE TOTAL DOLLAR AMOUNT  OF  CREDITS  ALLO-
CATED,  THE  NAME  AND  ADDRESS  OF  EACH  ELIGIBLE DIGITAL GAMING MEDIA
PRODUCTION ENTITY ALLOCATED CREDITS UNDER THIS SECTION,  AND  THE  TOTAL
AMOUNT  OF  CREDITS  ALLOCATED  TO  EACH  ELIGIBLE  DIGITAL GAMING MEDIA
PRODUCTION ENTITY. THE REPORT MAY ALSO INCLUDE ANY  RECOMMENDATIONS  FOR
CHANGES  IN  THE  CALCULATION  OR  ADMINISTRATION OF THE CREDIT, AND ANY
OTHER INFORMATION REGARDING THIS CREDIT AS MAY BE USEFUL  AND  APPROPRI-
ATE.
  (E)  CROSS-REFERENCES.  FOR  APPLICATION 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-THREE.
  (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 (GGG).
  S  6. Section 210-B of the tax law is amended by adding a new subdivi-
sion 53 to read as follows:
  53. EMPIRE STATE DIGITAL GAMING MEDIA 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.

S. 7485--A                          6

  (B) APPLICATION OF CREDIT. THE CREDIT ALLOWED UNDER  THIS  SUBDIVISION
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.
  S 7. 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
follows:

(XLIV) EMPIRE STATE DIGITAL          AMOUNT OF CREDIT
GAMING MEDIA PRODUCTION              UNDER SUBDIVISION
CREDIT UNDER SUBSECTION (GGG)        FIFTY-THREE OF SECTION
                                     TWO HUNDRED TEN-B
  S 8. Section 606 of the tax law is amended by adding a new  subsection
(ggg) to read as follows:
  (GGG)  EMPIRE STATE DIGITAL GAMING MEDIA PRODUCTION CREDIT. (1) ALLOW-
ANCE  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.
  (2) APPLICATION OF CREDIT. IF THE AMOUNT OF THE CREDIT ALLOWABLE UNDER
THIS SUBSECTION FOR ANY TAXABLE YEAR EXCEEDS THE TAXPAYER'S TAX FOR SUCH
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
ARTICLE, PROVIDED, HOWEVER, THAT NO INTEREST SHALL BE PAID THEREON.
  S 9. The state commissioner of economic development, after  consulting
with  the  state  commissioner of taxation and finance, shall promulgate
regulations by December 31, 2016 to establish procedures for  the  allo-
cation  of  tax credits as required by subdivision (a) of section 43 and
subdivision (a) of section 44 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
procedure act, such rules and regulations may be adopted on an emergency
basis if necessary to meet such December 31, 2016 deadline.
  S 10. Subdivision 11 of section 352 of the economic development law is
REPEALED.
  S  11. Subdivisions 1, 3 and 5 of section 353 of the economic develop-
ment law, as amended by section 2 of part K of chapter 59 of the laws of
2015, are amended to read as follows:
  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;

S. 7485--A                          7

  (e) in agriculture;
  (f)  in  the  creation  or  expansion of back office operations in the
state;
  (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; OR
  (i) as an entertainment company[; or
  (j) in music production].
  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 ten 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 fifty net new jobs; a business entity operating predomi-
nantly  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  fifty
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 operating
predominantly as a distribution center in the state must create at least
seventy-five net new jobs,  notwithstanding  subdivision  five  of  this
section;  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,
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.
  S  12.  Subdivision 21 of section 352 of the economic development law,
as amended by section 1 of part K of chapter 59 of the laws of 2015,  is
amended to read as follows:
  21.  "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.
  S  13. This act shall take effect immediately and shall apply to taxa-
ble years beginning on or after January 1, 2016.