S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   1943
 
                        2019-2020 Regular Sessions
 
                           I N  A S S E M B L Y
 
                             January 18, 2019
                                ___________
 
 Introduced  by  M.  of  A.  LENTOL, COLTON, NIOU, CARROLL, COOK, HEVESI,
   JAFFEE, D'URSO, ABBATE, BLAKE, CRESPO -- Multi-Sponsored by --  M.  of
   A.  HYNDMAN  --  read  once  and referred to the Committee on Ways and
   Means
 
 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 expi-
   ration thereof
 
   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 44 to read
 as follows:
   § 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
 PARAGRAPH TWO OF THIS SUBDIVISION.
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD04548-01-9
              

 A. 1943                             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
 AVAILABLE  FOR  QUALIFIED  MUSIC  PRODUCTIONS  THAT INCUR AT LEAST SIXTY
 PERCENT OF ELIGIBLE PRODUCTION COSTS FOR A QUALIFIED MUSIC PRODUCTION IN
 REGION TWO; AND THIRTY 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 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
 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) (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
 SERVICES.
   (B) ELIGIBLE PRODUCTION COSTS SHALL NOT INCLUDE: (I) COSTS FOR  TANGI-
 BLE  PROPERTY  OR SERVICES USED OR PERFORMED OUTSIDE OF THIS STATE, (II)

 A. 1943                             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-
 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 (JJJ).
   § 2. Section 210-B of the tax law is amended by adding a new  subdivi-
 sion 53 to read as follows:
   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.
   (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.
   §  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
 follows:
 
 (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
 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.

 A. 1943                             4
 
   (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.
   §  5.  The  tax  law  is amended by adding a new section 45 to read as
 follows:
   § 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-
 SION.
   (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-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
 FOLLOWS: FIFTY 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 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

 A. 1943                             5
 
 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 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

 A. 1943                             6
 
 EXCEED  SEVENTY-FIVE  PERCENT  OF  TOTAL  COST OF AN ELIGIBLE PRODUCTION
 INCURRED AND PAID WITHIN AND WITHOUT THIS STATE.
   (D)  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-FOUR.
   (2) ARTICLE TWENTY-TWO: SECTION SIX HUNDRED SIX, SUBSECTION (I), PARA-
 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.
   (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.
   § 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
 follows:

 (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
 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.
   § 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

 A. 1943                             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
 REPEALED.
   §  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
 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;
   (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,

 A. 1943                             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
 amended to read as follows:
   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

 A. 1943                             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
 CHAIRPERSONS OF THE ASSEMBLY WAYS AND MEANS COMMITTEE AND SENATE FINANCE
 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
 THE PROGRAMS.
   § 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.