S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   5267
 
                        2021-2022 Regular Sessions
 
                           I N  A S S E M B L Y
 
                             February 12, 2021
                                ___________
 
 Introduced by M. of A. WALKER -- 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 45  to  read
 as follows:
   §  45.  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)  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.
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
              

                                                            LBD05076-01-1

 A. 5267                             2
 
   (B)  ALLOCATION OF CREDIT. THE AGGREGATE AMOUNT OF TAX CREDITS ALLOWED
 UNDER THIS SECTION, SUBDIVISION FIFTY-FIVE 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 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)
 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

 A. 5267                             3

 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-FIVE.
   (2) ARTICLE TWENTY-TWO: SECTION SIX HUNDRED SIX, SUBSECTION (I), PARA-
 GRAPH ONE, SUBPARAGRAPH (B), CLAUSE (XLVI).
   (3) ARTICLE TWENTY-TWO: SECTION SIX HUNDRED SIX, SUBSECTION (KKK).
   §  2. Section 210-B of the tax law is amended by adding a new subdivi-
 sion 55 to read as follows:
   55. EMPIRE STATE MUSIC 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.
   § 3. Subparagraph (B) of paragraph 1 of subsection (i) of section  606
 of  the  tax  law  is  amended  by adding a new clause (xlvi) to read as
 follows:
 
 (XLVI) EMPIRE STATE MUSIC               AMOUNT OF CREDIT UNDER
 PRODUCTION CREDIT UNDER                 SUBDIVISION FIFTY-FIVE
 SUBSECTION (KKK)                        OF SECTION TWO HUNDRED TEN-B

   § 4. Section 606 of the tax law is amended by adding a new  subsection
 (kkk) to read as follows:
   (KKK) EMPIRE STATE MUSIC PRODUCTION CREDIT. (1) 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.
   (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.

 A. 5267                             4
 
   § 5. The tax law is amended by adding a new  section  46  to  read  as
 follows:
   §  46. 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-SIX OF SECTION TWO HUNDRED TEN-B
 AND SUBSECTION (LLL) 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
 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,

 A. 5267                             5
 
 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 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
 DIGITAL GAMING MEDIA PRODUCTION FOR PURPOSES OF THIS PARAGRAPH. A QUALI-
 FIED 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 ACCES-
 SIBLE 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 PAYMENTS FOR PROPERTY USED AND SERVICES PERFORMED DIRECTLY AND PREDO-
 MINATELY  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
 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-SIX.

 A. 5267                             6
 
   (2) ARTICLE TWENTY-TWO: SECTION SIX HUNDRED SIX, SUBSECTION (I), PARA-
 GRAPH ONE, SUBPARAGRAPH (B), CLAUSE (XLVII).
   (3) ARTICLE TWENTY-TWO: SECTION SIX HUNDRED SIX, SUBSECTION (LLL).
   §  6. Section 210-B of the tax law is amended by adding a new subdivi-
 sion 56 to read as follows:
   56. EMPIRE STATE DIGITAL GAMING MEDIA PRODUCTION CREDIT. (A) ALLOWANCE
 OF CREDIT. A TAXPAYER WHO IS ELIGIBLE PURSUANT TO SECTION  FORTY-SIX  OF
 THIS  CHAPTER  SHALL  BE  ALLOWED A CREDIT TO BE COMPUTED AS PROVIDED IN
 SUCH SECTION FORTY-SIX 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  (xlvii)  to  read  as
 follows:
 
 (XLVII) EMPIRE STATE DIGITAL         AMOUNT OF CREDIT
 GAMING MEDIA PRODUCTION              UNDER SUBDIVISION
 CREDIT UNDER SUBSECTION (LLL)        FIFTY-SIX OF SECTION
                                      TWO HUNDRED TEN-B
   §  8. Section 606 of the tax law is amended by adding a new subsection
 (lll) to read as follows:
   (LLL) EMPIRE STATE DIGITAL GAMING MEDIA PRODUCTION CREDIT. (1)  ALLOW-
 ANCE OF CREDIT. A TAXPAYER WHO IS ELIGIBLE PURSUANT TO SECTION FORTY-SIX
 OF  THIS CHAPTER SHALL BE ALLOWED A CREDIT TO BE COMPUTED AS PROVIDED IN
 SUCH SECTION FORTY-SIX 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, 2021 to establish procedures for the allo-
 cation of tax credits as required by subdivision (a) of section  45  and
 subdivision (a) of section 46 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 to 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, 2021 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, subdivision 1 as amended by section 2 of part L of chapter 59

 A. 5267                             7
 
 of the laws of 2020, subdivision 3 as separately amended by section 2 of
 part K of chapter 59 of the laws of 2017 and 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;
   (j) [in music production;
   (k)] as a life sciences company; or
   [(l)] (K) as a company operating in one of the  industries  listed  in
 paragraphs  (b)  through (e) of this subdivision and engaging in a green
 project as defined in section three hundred fifty-two of this article.
   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,
 the distribution of natural gas, or the production of  steam  associated

 A. 5267                             8
 
 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-THREE.  EACH REPORT MUST CONTAIN THE FOLLOWING INFORMA-
 TION FOR THE COVERED CALENDAR HALF YEAR:
   (A) THE TOTAL DOLLAR AMOUNT OF CREDITS ALLOCATED PURSUANT TO  SECTIONS
 FORTY-FIVE  AND  FORTY-SIX  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-FIVE AND
 FORTY-SIX 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-FIVE AND FORTY-SIX
 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-FIVE AND FORTY-SIX 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
 PARTNERSHIP OR A SHAREHOLDER IN A SUBCHAPTER S CORPORATION,  THE  AMOUNT

 A. 5267                             9
 
 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-FIVE OR FORTY-SIX
 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-FIVE. 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) AN 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-FIVE AND FORTY-SIX 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,  2022 and before January 1, 2027;
 provided that sections one through eight of this act shall expire and be
 deemed repealed December 31, 2026.