Senate Bill S4832

                             
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   4832
 
                        2023-2024 Regular Sessions
 
                             I N  S E N A T E
 
                             February 15, 2023
                                ___________
 
 Introduced  by  Sens. HINCHEY, COONEY -- read twice and ordered printed,
   and when printed to be committed to the  Committee  on  Investigations
   and Government Operations
 
 AN  ACT  to  amend  the  tax  law,  in relation to the empire state film
   production credit and the empire state film post production credit

   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section  1.    Paragraph 2 of subdivision (a) of section 24 of the tax
 law, as separately amended by sections 1 and 2 of part M of  chapter  59
 of the laws of 2020, is amended to read as follows:
   (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)  of  [twenty-
 five]  THIRTY percent, OR THIRTY-FIVE PERCENT IN THE CASE OF AN ELIGIBLE
 RELOCATED TELEVISION SERIES, and the qualified production costs paid  or
 incurred  in  the production of a qualified film, provided that: (i) the
 qualified production costs (excluding post  production  costs)  paid  or
 incurred  which  are attributable to the use of tangible property or the
 performance of services at a qualified film production facility  in  the
 production  of  such qualified film equal or exceed seventy-five percent
 of the production  costs  (excluding  post  production  costs)  paid  or
 incurred  which  are attributable to the use of tangible property or the
 performance of services at any film production facility within and with-
 out the state in the production of such qualified film, and (ii)  except
 with  respect  to  a  qualified  independent  film production company or
 pilot, at least ten percent of the total principal photography  shooting
 days  spent  in the production of such qualified film must be spent at a
 qualified film production facility. However, if the qualified production
 costs (excluding post production costs) which are  attributable  to  the
 use  of  tangible property or the performance of services at a qualified
 film production facility in the production of  such  qualified  film  is
 less  than  three  million  dollars,  then  the portion of the qualified
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD09509-02-3
              

 S. 4832                             2
 
 production costs attributable to the use of  tangible  property  or  the
 performance of services in the production of such qualified film outside
 of  a  qualified  film  production facility shall be allowed only if the
 shooting days spent in New York outside of a film production facility in
 the  production  of  such  qualified  film  equal or exceed seventy-five
 percent of the total shooting days spent within  and  without  New  York
 outside  of  a film production facility in the production of such quali-
 fied film. The credit shall be allowed for the taxable year in which the
 production of such qualified film is completed. However, in the case  of
 a  qualified  film that receives funds from additional pool 2, no credit
 shall be claimed before the later of (1) the taxable year the production
 of the qualified film is complete,  or  (2)  the  [first]  taxable  year
 [beginning  immediately  after  the]  THAT  INCLUDES THE LAST DAY OF THE
 allocation year for which the film has  been  allocated  credit  by  the
 governor's  office for motion picture and television development. If the
 amount of the credit is at least one million dollars but less than  five
 million  dollars,  the  credit  shall  be claimed over a two year period
 beginning in the first taxable year in which the credit may  be  claimed
 and  in the next succeeding taxable year, with one-half of the amount of
 credit allowed being claimed in each year. If the amount of  the  credit
 is  at  least  five  million dollars, the credit shall be claimed over a
 three year period beginning in the first taxable year in which the cred-
 it may be claimed and in the next two  succeeding  taxable  years,  with
 one-third  of  the  amount  of  the credit allowed being claimed in each
 year.
   § 2. Paragraph 5 of subdivision (a) of section 24 of the tax  law,  as
 amended  by  section  2  of part M of chapter 59 of the laws of 2022, is
 amended to read as follows:
   (5) For the period two thousand fifteen through two thousand  [twenty-
 nine]  THIRTY-FOUR,  in  addition to the amount of credit established in
 paragraph two of this subdivision, a taxpayer shall be allowed a  credit
 equal to the product (or pro rata share of the product, in the case of a
 member  of  a  partnership)  of  ten percent and the [amount of wages or
 salaries paid to individuals directly employed (excluding those employed
 as  writers,  directors,  music  directors,  producers  and  performers,
 including  background actors with no scripted lines) by a qualified film
 production company or a qualified independent  film  production  company
 for  services performed by those individuals] QUALIFIED PRODUCTION COSTS
 PAID OR INCURRED IN THE PRODUCTION OF THE QUALIFIED FILM in one  of  the
 counties specified in this paragraph in connection with a qualified film
 with  a minimum budget of five hundred thousand dollars. For purposes of
 this additional credit,  the  [services  must  be  performed]  QUALIFIED
 PRODUCTION  COSTS PAID OR INCURRED MUST BE IN THE PRODUCTION OF A QUALI-
 FIED FILM in one or more of the following  counties:  Albany,  Allegany,
 Broome,  Cattaraugus,  Cayuga,  Chautauqua,  Chemung, Chenango, Clinton,
 Columbia, Cortland, Delaware, Dutchess, Erie, Essex,  Franklin,  Fulton,
 Genesee, Greene, Hamilton, Herkimer, Jefferson, Lewis, Livingston, Madi-
 son,  Monroe,  Montgomery,  Niagara,  Oneida, Onondaga, Ontario, Orange,
 Orleans, Oswego,  Otsego,  Putnam,  Rensselaer,  Saratoga,  Schenectady,
 Schoharie,  Schuyler,  Seneca,  St.  Lawrence, Steuben, Sullivan, Tioga,
 Tompkins, Ulster, Warren, Washington, Wayne,  Wyoming,  or  Yates.  [The
 aggregate  amount  of  tax  credits allowed pursuant to the authority of
 this paragraph shall be five million dollars each year during the period
 two thousand fifteen through two  thousand  twenty-nine  of  the  annual
 allocation  made  available to the program pursuant to paragraph four of
 subdivision (e) of this section. Such aggregate amount of credits  shall
 S. 4832                             3

 be  allocated by the governor's office for motion picture and television
 development among taxpayers in order of priority based upon the date  of
 filing an application for allocation of film production credit with such
 office.  If the total amount of allocated credits applied for under this
 paragraph  in  any  year  exceeds  the  aggregate  amount of tax credits
 allowed for such year under this paragraph, such excess shall be treated
 as having been applied for on the first day of the  next  year.  If  the
 total  amount  of allocated tax credits applied for under this paragraph
 at the conclusion of any year is less than  five  million  dollars,  the
 remainder  shall be treated as part of the annual allocation made avail-
 able to the program pursuant to paragraph four  of  subdivision  (e)  of
 this  section.  However,  in no event may the total of the credits allo-
 cated under this paragraph and the  credits  allocated  under  paragraph
 five  of  subdivision  (a)  of section thirty-one of this article exceed
 five million dollars in any year during the period two thousand  fifteen
 through two thousand twenty-nine] THE TOTAL AMOUNT OF CREDIT ESTABLISHED
 PURSUANT  TO  THE  AUTHORITY OF THIS PARAGRAPH AND PARAGRAPH TWO OF THIS
 SUBDIVISION SHALL NOT EXCEED A CREDIT EQUAL TO THE PRODUCT (OR PRO  RATA
 SHARE OF THE PRODUCT, IN THE CASE OF A MEMBER OF A PARTNERSHIP) OF FORTY
 PERCENT  AND  THE  QUALIFIED  PRODUCTION  COSTS  PAID OR INCURRED IN THE
 PRODUCTION OF THE QUALIFIED FILM.
   § 2-a. Paragraph 1 of subdivision (b) of section 24 of the tax law, as
 amended by section 4 of part B of chapter 59 of the  laws  of  2013,  is
 amended to read as follows:
   (1)  "Qualified  production  costs" means production costs only to the
 extent such costs are attributable to the use of  tangible  property  or
 the  performance of services within the state directly and predominantly
 in the production (including pre-production and post  production)  of  a
 qualified  film.    THE  AGGREGATE   TOTAL ELIGIBLE QUALIFIED PRODUCTION
 COSTS FOR PRODUCERS, WRITERS, DIRECTORS, ACTORS, AND COMPOSERS SHALL NOT
 EXCEED FORTY PERCENT OF THE AGGREGATE SUM TOTAL OF ALL  OTHER  QUALIFIED
 PRODUCTION COSTS.
   §  3.  Paragraph 2 of subdivision (b) of section 24 of the tax law, as
 added by section 1 of part P of chapter 60  of  the  laws  of  2004,  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   film.
 "Production  costs"  shall  not include (i) costs for a story, script or
 scenario to be used for a qualified film and (ii) wages or  salaries  or
 other  compensation  for writers, directors, including [music directors]
 COMPOSERS, producers and performers (other than background  actors  with
 no  scripted  lines)  TO  THE  EXTENT  THOSE  WAGES OR SALARIES OR OTHER
 COMPENSATION  EXCEED  FIVE  HUNDRED  THOUSAND  DOLLARS  PER  INDIVIDUAL.
 "Production  costs"  generally  include  technical  and  crew production
 costs, such as expenditures for film production facilities, or any  part
 thereof, props, makeup, wardrobe, film processing, camera, sound record-
 ing, set construction, lighting, shooting, editing and meals.
   §  4.  Paragraph 8 of subdivision (b) of section 24 of the tax law, as
 added by section 2 of part B of chapter 59  of  the  laws  of  2013,  is
 amended to read as follows:
   (8)  "Relocated television production" shall mean, notwithstanding the
 limitations in subparagraph (i) of paragraph three of this  subdivision,
 a television production that is a talk or variety program that filmed at
 least  [five] TWO seasons outside the state prior to its first relocated
 season in New York, the episodes are filmed before a studio audience  of
 S. 4832                             4
 
 two  hundred or more, and the relocated television production incurs (i)
 at least thirty million dollars in annual production costs in the state,
 or (ii) at least ten million dollars in capital expenditures at a quali-
 fied production facility in the state.
   § 5. Subdivision (b) of section 24 of the tax law is amended by adding
 a new paragraph 9 to read as follows:
   (9)  "ELIGIBLE  RELOCATED  TELEVISION SERIES" SHALL MEAN THE FIRST TWO
 YEARS OF A REGULARLY OCCURRING PRODUCTION INTENDED TO RUN IN ITS INITIAL
 BROADCAST, REGARDLESS OF THE MEDIUM OR MODE OF ITS  DISTRIBUTION,  IN  A
 SERIES  OF NARRATIVE AND/OR THEMATICALLY RELATED EPISODES, EACH OF WHICH
 HAS A RUNNING TIME OF AT LEAST THIRTY MINUTES IN  LENGTH  (INCLUSIVE  OF
 COMMERCIAL  ADVERTISEMENT AND INTERSTITIAL PROGRAMMING, IF ANY). FOR THE
 PURPOSES OF THIS DEFINITION ONLY, A TELEVISION SERIES  PRODUCED  BY  AND
 FOR  MEDIA  SERVICES  PROVIDERS  DESCRIBED  AS STREAMING SERVICES AND/OR
 DIGITAL PLATFORMS (AND EXCLUDING NETWORK/CABLE) SHALL MEAN  A  REGULARLY
 OCCURRING  PRODUCTION INTENDED TO RUN IN ITS INITIAL RELEASE IN A SERIES
 OF NARRATIVE AND/OR THEMATICALLY RELATED EPISODES, THE AGGREGATE  LENGTH
 OF  WHICH  IS AT LEAST SEVENTY-FIVE MINUTES, ALTHOUGH THE EPISODES THEM-
 SELVES MAY VARY IN  DURATION  FROM  THE  THIRTY  MINUTES  SPECIFIED  FOR
 NETWORK/CABLE  PRODUCTION,  WHICH  HAD  FILMED SIX EPISODES OF THE TELE-
 VISION SERIES OUTSIDE THE STATE IMMEDIATELY PRIOR TO RELOCATING  TO  THE
 STATE, WHERE EACH EPISODE OF THE  TELEVISION SERIES HAD A MINIMUM BUDGET
 OF AT LEAST ONE MILLION DOLLARS.
   §  6.  Paragraph 4 of subdivision (e) of section 24 of the tax law, as
 amended by section 3 of part M of chapter 59 of the  laws  of  2022,  is
 amended to read as follows:
   (4) Additional pool 2 - The aggregate amount of tax credits allowed in
 subdivision (a) of this section shall be increased by an additional four
 hundred twenty million dollars in each year starting in two thousand ten
 through  two  thousand  [twenty-nine]  TWENTY-THREE  AND  SEVEN  HUNDRED
 MILLION DOLLARS EACH YEAR STARTING IN TWO THOUSAND  TWENTY-FOUR  THROUGH
 TWO THOUSAND THIRTY-FOUR, provided however, seven million dollars of the
 annual  allocation  shall  be  available  for the empire state film post
 production credit pursuant to section thirty-one of this article in  two
 thousand thirteen and two thousand fourteen, twenty-five million dollars
 of  the  annual  allocation shall be available for the empire state film
 post production credit pursuant to section thirty-one of this article in
 each year starting in two thousand fifteen through two  thousand  [twen-
 ty-nine  and] TWENTY-THREE, AND FORTY-FIVE MILLION DOLLARS OF THE ANNUAL
 ALLOCATION SHALL BE AVAILABLE FOR THE EMPIRE STATE FILM POST  PRODUCTION
 CREDIT  PURSUANT  TO  SECTION  THIRTY-ONE  OF  THIS ARTICLE IN EACH YEAR
 STARTING IN TWO THOUSAND TWENTY-FOUR THROUGH TWO  THOUSAND  THIRTY-FOUR.
 PROVIDED FURTHER, five million dollars of the annual allocation shall be
 made available for the television writers' and directors' fees and sala-
 ries  credit  pursuant  to section twenty-four-b of this article in each
 year starting in two thousand twenty through two thousand  [twenty-nine]
 THIRTY-FOUR. This amount shall be allocated by the governor's office for
 motion  picture and television development among taxpayers in accordance
 with subdivision (a) of this section. If the  commissioner  of  economic
 development  determines  that the aggregate amount of tax credits avail-
 able from additional pool 2 for the empire  state  film  production  tax
 credit  have  been previously allocated, and determines that the pending
 applications from eligible applicants for the  empire  state  film  post
 production  tax credit pursuant to section thirty-one of this article is
 insufficient to utilize the balance of  unallocated  empire  state  film
 post  production  tax  credits from such pool, the remainder, after such
 S. 4832                             5
 
 pending applications are considered, shall be made available  for  allo-
 cation  in  the  empire  state film tax credit pursuant to this section,
 subdivision twenty of section two hundred ten-B and subsection  (gg)  of
 section  six  hundred  six of this chapter. Also, if the commissioner of
 economic development determines that the aggregate amount of tax credits
 available from  additional  pool  2  for  the  empire  state  film  post
 production  tax  credit  have  been previously allocated, and determines
 that the pending applications from eligible applicants  for  the  empire
 state  film  production  tax credit pursuant to this section is insuffi-
 cient to utilize the balance of unallocated film production tax  credits
 from  such  pool,  then all or part of the remainder, after such pending
 applications are considered, shall be made available for allocation  for
 the  empire  state film post production credit pursuant to this section,
 subdivision thirty-two of section two hundred ten-B and subsection  (qq)
 of  section  six  hundred six of this chapter. The governor's office for
 motion picture and television development must notify taxpayers of their
 allocation year and include the allocation year on  the  certificate  of
 tax  credit.  Taxpayers eligible to claim a credit must report the allo-
 cation year directly on their empire state film  production  credit  tax
 form for each year a credit is claimed and include a copy of the certif-
 icate  with  their  tax  return.  In  the  case of a qualified film that
 receives funds from additional pool 2, no empire state  film  production
 credit  shall  be  claimed  before  the  later  of  the taxable year the
 production of the qualified film is complete, or the taxable year  imme-
 diately  following the allocation year for which the film has been allo-
 cated credit by the governor's office for motion picture and  television
 development.
   §  7.  Paragraph 4 of subdivision (e) of section 24 of the tax law, as
 amended by section 4 of part M of chapter 59 of the  laws  of  2022,  is
 amended to read as follows:
   (4) Additional pool 2 - The aggregate amount of tax credits allowed in
 subdivision (a) of this section shall be increased by an additional four
 hundred twenty million dollars in each year starting in two thousand ten
 through  two  thousand  [twenty-nine]  TWENTY-THREE  AND  SEVEN  HUNDRED
 MILLION DOLLARS IN  EACH  YEAR  STARTING  IN  TWO  THOUSAND  TWENTY-FOUR
 THROUGH  TWO  THOUSAND  THIRTY-FOUR,  provided  however,  seven  million
 dollars of the annual allocation shall be available for the empire state
 film post production credit pursuant to section thirty-one of this arti-
 cle in two thousand thirteen and two thousand  fourteen  [and],  twenty-
 five million dollars of the annual allocation shall be available for the
 empire  state film post production credit pursuant to section thirty-one
 of this article in each year starting in two  thousand  fifteen  through
 two  thousand [twenty-nine] TWENTY-THREE, AND FORTY-FIVE MILLION DOLLARS
 OF THE ANNUAL ALLOCATION SHALL BE AVAILABLE FOR THE  EMPIRE  STATE  FILM
 POST PRODUCTION CREDIT PURSUANT TO SECTION THIRTY-ONE OF THIS ARTICLE IN
 EACH  YEAR  STARTING  IN  TWO  THOUSAND TWENTY-FOUR THROUGH TWO THOUSAND
 THIRTY-FOUR. This amount shall be allocated by the governor's office for
 motion picture and television development among taxpayers in  accordance
 with  subdivision  (a)  of this section. If the commissioner of economic
 development determines that the aggregate amount of tax  credits  avail-
 able  from  additional  pool  2 for the empire state film production tax
 credit have been previously allocated, and determines that  the  pending
 applications  from  eligible  applicants  for the empire state film post
 production tax credit pursuant to section thirty-one of this article  is
 insufficient  to  utilize  the  balance of unallocated empire state film
 post production tax credits from such pool, the  remainder,  after  such
 S. 4832                             6
 
 pending  applications  are considered, shall be made available for allo-
 cation in the empire state film tax credit  pursuant  to  this  section,
 subdivision  twenty  of section two hundred ten-B and subsection (gg) of
 section  six  hundred  six of this chapter. Also, if the commissioner of
 economic development determines that the aggregate amount of tax credits
 available from  additional  pool  2  for  the  empire  state  film  post
 production  tax  credit  have  been previously allocated, and determines
 that the pending applications from eligible applicants  for  the  empire
 state  film  production  tax credit pursuant to this section is insuffi-
 cient to utilize the balance of unallocated film production tax  credits
 from  such  pool,  then all or part of the remainder, after such pending
 applications are considered, shall be made available for allocation  for
 the  empire  state film post production credit pursuant to this section,
 subdivision thirty-two of section two hundred ten-B and subsection  (qq)
 of  section  six  hundred six of this chapter. The governor's office for
 motion picture and television development must notify taxpayers of their
 allocation year and include the allocation year on  the  certificate  of
 tax  credit.  Taxpayers eligible to claim a credit must report the allo-
 cation year directly on their empire state film  production  credit  tax
 form for each year a credit is claimed and include a copy of the certif-
 icate  with  their  tax  return.  In  the  case of a qualified film that
 receives funds from additional pool 2, no empire state  film  production
 credit  shall  be  claimed  before  the  later  of  the taxable year the
 production of the qualified film is complete, or the taxable year  imme-
 diately  following the allocation year for which the film has been allo-
 cated credit by the governor's office for motion picture and  television
 development.
   §  8.  Paragraph 2 of subdivision (a) of section 31 of the tax law, as
 amended by section 5 of part M of chapter 59 of the  laws  of  2020,  is
 amended to read as follows:
   (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)  of  [twenty-
 five] THIRTY percent and the qualified post production costs paid in the
 production  of  a qualified film at a qualified post production facility
 located within the  metropolitan  commuter  transportation  district  as
 defined  in  section  twelve hundred sixty-two of the public authorities
 law or [thirty] THIRTY-FIVE percent and the  qualified  post  production
 costs  paid  in  the  production of a qualified film at a qualified post
 production facility located elsewhere in the state.
   § 9. Paragraph 6 of subdivision (a) of section 31 of the tax  law,  as
 amended  by  section  6  of part M of chapter 59 of the laws of 2022, is
 amended to read as follows:
   (6) For the period two thousand fifteen through two thousand  [twenty-
 nine]  THIRTY-FOUR,  in  addition to the amount of credit established in
 paragraph two of this subdivision, a taxpayer shall be allowed a  credit
 equal to the product (or pro rata share of the product, in the case of a
 member  of  a  partnership)  of  ten percent and the [amount of wages or
 salaries paid to individuals directly employed (excluding those employed
 as  writers,  directors,  music  directors,  producers  and  performers,
 including  background  actors  with  no  scripted  lines)  for  services
 performed by those individuals] QUALIFIED POST PRODUCTION COSTS PAID  IN
 THE  PRODUCTION  OF A QUALIFIED FILM WITH A MINIMUM BUDGET OF FIVE THOU-
 SAND DOLLARS AT A QUALIFIED POST PRODUCTION FACILITY LOCATED in  one  of
 the  counties  specified  in this paragraph [in connection with the post
 production work on a qualified  film  with  a  minimum  budget  of  five
 hundred  thousand dollars at a qualified post production facility in one
 S. 4832                             7

 of the counties listed in this paragraph]. For purposes  of  this  addi-
 tional  credit,  [the  services  must  be  performed] THE QUALIFIED POST
 PRODUCTION COSTS PAID MUST BE IN THE PRODUCTION OF A QUALIFIED  FILM  in
 one  or more of the following counties: Albany, Allegany, Broome, Catta-
 raugus, Cayuga, Chautauqua, Chemung, Chenango, Clinton, Columbia,  Cort-
 land,  Delaware,  Dutchess,  Erie,  Essex,  Franklin,  Fulton,  Genesee,
 Greene,  Hamilton,  Herkimer,  Jefferson,  Lewis,  Livingston,  Madison,
 Monroe, Montgomery, Niagara, Oneida, Onondaga, Ontario, Orange, Orleans,
 Oswego,  Otsego,  Putnam,  Rensselaer, Saratoga, Schenectady, Schoharie,
 Schuyler, Seneca, St.  Lawrence,  Steuben,  Sullivan,  Tioga,  Tompkins,
 Ulster,  Warren,  Washington,  Wayne,  Wyoming, or Yates. [The aggregate
 amount of tax credits allowed pursuant to the authority  of  this  para-
 graph  shall  be  five  million  dollars each year during the period two
 thousand fifteen through two thousand twenty-nine of  the  annual  allo-
 cation  made  available  to the empire state film post production credit
 pursuant to paragraph four of subdivision (e) of section twenty-four  of
 this article. Such aggregate amount of credits shall be allocated by the
 governor's  office  for  motion picture and television development among
 taxpayers in order of priority based upon the date of filing an applica-
 tion for allocation of post production credit with such office.  If  the
 total  amount  of  allocated credits applied for under this paragraph in
 any year exceeds the aggregate amount of tax credits  allowed  for  such
 year  under  this paragraph, such excess shall be treated as having been
 applied for on the first day of the next year. If the  total  amount  of
 allocated tax credits applied for under this paragraph at the conclusion
 of  any  year  is less than five million dollars, the remainder shall be
 treated as part of the annual allocation for two thousand seventeen made
 available to the empire state film post production  credit  pursuant  to
 paragraph  four  of subdivision (e) of section twenty-four of this arti-
 cle. However, in no event may the total of the credits  allocated  under
 this  paragraph and the credits allocated under paragraph five of subdi-
 vision (a) of section twenty-four of this article  exceed  five  million
 dollars  in  any year during the period two thousand fifteen through two
 thousand twenty-nine.]
   § 10. This act shall take effect immediately for new initial  applica-
 tions  received on or after such effective date; provided, however, that
 the amendments to paragraph 4 of subdivision (e) of section  24  of  the
 tax  law  made  by section six of this act shall take effect on the same
 date and in the same manner as section 6 of chapter 683 of the  laws  of
 2019, as amended, takes effect.