S4527A-2011 Actions

• Jan 4, 2012: REFERRED TO INVESTIGATIONS AND GOVERNMENT OPERATIONS
• Apr 15, 2011: PRINT NUMBER 4527A
• Apr 15, 2011: AMEND AND RECOMMIT TO INVESTIGATIONS AND GOVERNMENT OPERATIONS
• Apr 11, 2011: REFERRED TO INVESTIGATIONS AND GOVERNMENT OPERATIONS

S4527A-2011 Memo

BILL NUMBER:S4527A

TITLE OF BILL:
An act
to amend the tax law, in relation
to empire state commercial production
tax credit; and to amend section 8 of part V of chapter 62 of the laws
of 2006 amending the tax law relating to the empire state commercial
production tax credit

PURPOSE OF BILL:
This bill would increase the current tax credit program from $7 million
to $10 million, eliminate the sunset provision in the current program
and allow for flexibility in accessing the three categories of tax
credits.

SUMMARY OF SPECIFIC PROVISIONS:
Section one amends paragraph 2 of subdivision (a) of section 28 of the
tax law by increasing the total dollars in tax credits from $7 to $10
million. section one also provides that, wherever there is any money
remaining for the annual tax credit disbursement, such money shall be
disbursed to all eligible production companies on a pro rata basis.

Section two amends section 8 of part V of a chapter of the laws of
2006 amending the tax law by increasing the aggregate amount of tax
credits allowed under the tax law from $3 million to $4.5 million.

Section three provides an immediate effective date, with applicability
to taxable years beginning on and after January 1, 2011.

JUSTIFICATION:
New York state offers a fully refundable tax credit, known as the
Empire state Commercial production Tax Credit, to qualified
commercial production companies shooting commercials within the
state. The credit is available to companies that are directly
responsible for the payment of direct production expenses and are the
signatory to contracts with the payroll service, facilities, vendors,
etc. utilized in the production of commercials.

This essential credit, which lured business back to New York state
after losing it to competing tax credits in New Jersey and
Connecticut, expires in 2011. If this credit were to sunset, it would
be an economic detriment to New York State, as it brings jobs and tax
revenue to the State of New York and keeps New York competitive in
the commercial production industry.

Since the creation of this credit, commercial filming in New York
State has shown improvement. In 2005 (prior to the existence of the
tax credit), 12% of shoot days took place in New York. Data collected
in 2010 shows that 16% of all shoot days now take place in New York,
an increase that is attributed to the formation of the Empire state
commercial production Tax Credit.

PRIOR LEGISLATIVE HISTORY:
New Bill.


FISCAL IMPLICATIONS:
This legislation will create new jobs in the State.

EFFECTIVE DATE:
This act shall take effect immediately and shall apply to taxable
years beginning on and after January 1, 2011.

S4527A-2011 Text

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

                                   4527--A

                         2011-2012 Regular Sessions

                              I N  SENATE

                               April 11, 2011
                                 ___________

  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, in relation to empire state commercial
    production tax credit; and to amend section 8 of part V of chapter  62
    of  the laws of 2006 amending the tax law relating to the empire state
    commercial production tax 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 28 of the tax
  law, as amended by chapter 300 of the laws of 2007, subparagraph (i)  as
  amended  by  chapter  448  of  the  laws  of 2009, is amended to read as
  follows:

    (2) The state has annually [seven] TEN million dollars  in  total  tax
  credits  to  disburse  to  all eligible commercial production companies.
  The [seven] TEN million dollars in total tax credits shall be  allocated
  according to subparagraphs (i), (ii) [and], (iii) AND (IV) of this para-
  graph:

    (i) The state annually will disburse [three] FOUR AND ONE-HALF million
  of  the  total  [seven]  TEN  million  in  tax  credits  to all eligible
  production companies and the amount of the credit shall be  the  product
  (or pro rata share of the product, in the case of a member of a partner-
  ship)  of  twenty  percent  of  the  qualified  production costs paid or
  incurred in the production of a qualified commercial, provided that  the
  qualified  production costs paid or incurred are attributable to the use
  of tangible property or the performance of services within the state  in
  the  production  of  such  qualified commercial. To be eligible for said
  credit the total qualified production costs of  a  qualified  production
  company  must  be  greater  in the aggregate during the current calendar
  year than the average of the three previous years for which  the  credit

   EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                        [ ] is old law to be omitted.
                                                             LBD10632-02-1

 S. 4527--A                          2

  was applied. Provided, however, that until a qualified production compa-
  ny  has  established  a  three year history, the credit will be based on
  either the previous year or the  average  of  the  two  previous  years,
  whichever  period is longer for the qualified production company seeking
  the credit. If the qualified production company has  never  applied  for
  the  growth  credit,  the  previous year's data will be used to create a
  benchmark. The tax credit shall be applied only to  the  amount  of  the
  total  qualified  production costs of the current calendar year that are
  greater than the total amount of production  costs  of  the  appropriate
  measurement  period  as  described  in this subparagraph. The tax credit
  must be distributed to eligible  production  companies  on  a  pro  rata
  basis,  provided,  however,  that  no  such qualified production company
  shall receive more than three hundred thousand dollars annually for such
  credit. The credit shall be allowed for the taxable year  in  which  the
  production of such qualified commercial is completed.
    (ii)  The  state  annually  will  disburse  [three]  FOUR AND ONE-HALF
  million of the total [seven] TEN million in tax credits to all  eligible
  production companies who film or record qualified commercials within the
  metropolitan  commuter  transportation  district  as  defined in section
  twelve hundred sixty-two of the public authorities law.  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 five percent of the  qualified
  production  costs  paid  or  incurred  in  the production of a qualified
  commercial,  provided  that  the  qualified  production  costs  paid  or
  incurred  are  attributable  to  the  use  of  tangible  property or the
  performance of services within the state in the production of such qual-
  ified commercial. To be eligible for said  credit  the  total  qualified
  production  costs of a qualified production company must be greater than
  five hundred thousand dollars in the aggregate during the calendar year.
  Such credit will be applied to qualified production costs exceeding five
  hundred thousand dollars in a calendar year.
    (iii) The state annually  will  disburse  one  million  of  the  total
  [seven]  TEN million in tax credits to all eligible production companies
  who film or record a qualified commercial outside  of  the  metropolitan
  commuter  transportation  district  as defined in section twelve hundred
  sixty-two of the public authorities law. 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 five percent  of  the  qualified  production
  costs  paid  or  incurred  in  the production of a qualified commercial,
  provided that the  qualified  production  costs  paid  or  incurred  are
  attributable  to  the  use  of  tangible  property or the performance of
  services within the state in the production of  such  qualified  commer-
  cial.  To  be  eligible  for  said credit the total qualified production
  costs of a qualified production company must be greater than two hundred
  thousand dollars in the aggregate during the calendar year. Such  credit
  will  be  applied  to  qualified  production costs exceeding two hundred
  thousand dollars in a calendar year.
    (IV) PROVIDED, HOWEVER, IF THERE IS ANY MONEY REMAINING FOR THE ANNUAL
  TAX CREDIT DISBURSEMENT AS DESCRIBED IN SUBPARAGRAPH (III) OF THIS PARA-
  GRAPH, SUCH MONEY SHALL BE DISBURSED TO ALL ELIGIBLE  PRODUCTION  COMPA-
  NIES  SATISFYING THE CRITERIA SET FORTH IN SUBPARAGRAPHS (I) AND (II) OF
  THIS PARAGRAPH ON A PRO RATA BASIS.
    S 2. Section 8 of part V of chapter 62 of the laws  of  2006  amending
  the tax law relating to the empire state commercial production tax cred-
  it,  as  amended  by chapter 440 of the laws of 2006, subdivision (d) as

 S. 4527--A                          3

  amended by chapter 300 of the laws  of  2007,  is  amended  to  read  as
  follows:

    S  8. Maximum amount of credits. (a) The aggregate amount of tax cred-
  its allowed under subparagraph (i) of paragraph 2 of subdivision (a)  of
  section 28, subdivision 38 of section 210 and subsection (jj) of section
  606  of the tax law in any calendar year shall be $[3] 4.5 million. Such
  aggregate amount of credits shall be allocated by the governor's  office
  for  motion  picture and television development among taxpayers on a pro
  rata basis.  Such office shall establish by rules and regulations a date
  certain on which the taxpayers eligible for  such  pro  rata  allocation
  shall be determined.
    (b)  The  aggregate  amount  of tax credits allowed under subparagraph
  (ii) of paragraph 2 of subdivision (a) of section 28, subdivision 38  of
  section  210  and  subsection  (jj) of section 606 of the tax law in any
  calendar year shall be $[3] 4.5 million. Such aggregate amount of  cred-
  its  shall  be allocated by the governor's office for motion picture and
  television development among taxpayers on a pro rata basis. 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 year.
    (c)  The  aggregate  amount  of tax credits allowed under subparagraph
  (iii) of paragraph 2 of subdivision (a) of section 28, subdivision 38 of
  section 210 and subsection (jj) of section 606 of the  tax  law  in  any
  calendar  year  shall  be  $1  million. Such aggregate amount of credits
  shall be allocated by the governor's office for motion picture and tele-
  vision development among taxpayers on a pro rata  basis.  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 year.
    (d) The aggregate amount  of  tax  credits  allowed  pursuant  to  the
  authority  of  subdivision  (c) of section 1201-a  of the tax law in any
  calendar year shall be $[3] 4.5 million for 2007 through 2011  allocated
  equally  to  the credit substantially identical to credits allowed under
  subparagraphs (i) and (ii) of paragraph 2 of section 28 of the tax  law.
  Such  aggregate  amount  of  credits  shall  be allocated by the mayor's
  office of film, theater and broadcasting among taxpayers on a  pro  rata
  basis.  Such  credits  shall be allocated in amounts to be determined by
  the city via local law and such credits shall be substantially identical
  to credits allowed under subparagraphs (i) and (ii) of  paragraph  2  of
  subdivision  (a) of section 28 of the tax law.  Provided however nothing
  herein shall preclude the city via local law from allocating its  entire
  annual  amount  of  credits  to  one  category  of credits allowed under
  subparagraph (i) or (ii) of paragraph 2 of subdivision (a) of section 28
  of the tax law.
    (e) The New York state commissioner  of  economic  development,  after
  consulting with the New York state commissioner of taxation and finance,
  the  New  York  city  commissioner  of finance and the mayor's office of
  film, theater and broadcasting shall promulgate regulations  by  October
  31,  2006  to  establish procedures for the allocation of tax credits as
  required by subdivisions (a), (b) and (c) of this  section.  Such  rules
  and  regulations  shall  include  provisions  describing the application
  process, the due dates for such applications, the standards which  shall
  be  used  to  evaluate  the applications, the documentation that will be
  provided to taxpayers to substantiate to the New York  state  department

 S. 4527--A                          4

  of  taxation  and finance or the New York city department of finance the
  amount of tax credits  allocated  to  such  taxpayers,  and  such  other
  provisions  as are deemed necessary and appropriate. Notwithstanding any
  other  provisions  to the contrary in the state administrative procedure
  act or the city administrative procedure act, such rules and regulations
  may be adopted on an emergency basis if necessary to meet  such  October
  31, 2006 deadline.
    S 3. This act shall take effect immediately and shall apply to taxable
  years  beginning  on  and after January 1, 2011; provided, however, that
  the amendments to paragraph 2 of subdivision (a) of section  28  of  the
  tax  law  made by section one of this act shall not affect the repeal of
  such section and shall be deemed repealed therewith.