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

                                  5450

                       2015-2016 Regular Sessions

                            I N  S E N A T E

                              May 14, 2015
                               ___________

Introduced  by  Sen.  GOLDEN -- read twice and ordered printed, and when
  printed to be committed to the Committee on Commerce, Economic  Devel-
  opment and Small Business

AN ACT to amend the economic development law, in relation to the excels-
  ior  jobs  program  for music production; and to amend the tax law, in
  relation to the excelsior jobs program credit

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

  Section  1. Section 351 of the economic development law, is amended by
adding a new undesignated paragraph to read as follows:
  IT IS FURTHER HEREBY FOUND  AND  DECLARED  THAT  THE  PURPOSE  OF  THE
EXCELSIOR JOBS PROGRAM ACT IS TO CREATE, RETAIN AND RECLAIM JOBS THROUGH
EXPENDITURES  MADE  IN NEW YORK STATE. NEW YORK IS HOME TO TENS OF THOU-
SANDS OF  MUSICIANS,  SONGWRITERS,  TECHNICIANS,  PRODUCERS,  AND  OTHER
BEHIND-THE-SCENES  PROFESSIONALS  WHO  ARE  INDISPENSABLE  TO  THE MUSIC
CREATION PROCESS. SEVERAL STATES AND FOREIGN GOVERNMENTS HAVE  DEVELOPED
AGGRESSIVE  MARKETING  PROGRAMS, GRANTS AND TAX INCENTIVES TO LURE MUSIC
PRODUCTION IN ORDER TO BOLSTER THEIR LOCAL MUSIC INDUSTRY AND ASSOCIATED
SUPPORT SERVICES. NEW YORK STATE'S SHARE OF MUSIC PRODUCTION HAS DROPPED
NEARLY FIFTY PERCENT SINCE NINETEEN HUNDRED NINETY-NINE.  TODAY'S  MUSIC
PRODUCTION  COMMUNITY  OFTEN  RELIES  UPON SMALL CONTRACTORS AND VENDORS
THAT SUPPORT THE PRODUCTION AND DISTRIBUTION  OF  SOUND  RECORDINGS  AND
MUSIC  VIDEOS FOR A VARIETY OF DIFFERENT ENTITIES. AS THE STATE WANTS TO
PROTECT ITS CULTURAL INDUSTRIES AND ENCOURAGE ECONOMIC ACTIVITY IN ORDER
TO PROTECT THE LIVELIHOODS OF  THOSE  INVOLVED  IN  THE  MUSIC  CREATION
ECOSYSTEM,  THE  LEGISLATURE DEEMS IT APPROPRIATE TO AMEND THE EXCELSIOR
JOBS PROGRAM TO BETTER PROMOTE MUSIC PRODUCTION INDUSTRY IN NEW YORK.
  S 2. Subdivision 11 of section 352 of the economic development law, as
added by section 1 of part K of chapter 59  of  the  laws  of  2015,  is
amended to read as follows:

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD11135-01-5

              

S. 5450                             2

  11. "Music production" means the [process of creating sound recordings
of  at  least  eight  minutes,  recorded in professional sound studios,]
CREATION OF A SOUND RECORDING OR ANY  RELATED  MUSIC  VIDEO,  EITHER  OF
WHICH  IS  intended  for commercial release. "Music production" does not
include  recording  of  live  concerts, or recordings that are primarily
spoken word or wildlife or nature sounds, or produced for  instructional
use or advertising or promotional purposes.
  S  3. Section 352 of the economic development law is amended by adding
eight new subdivisions 22, 23, 24, 25, 26, 27, 28  and  29  to  read  as
follows:
  22. "MUSIC PRODUCTION PROJECT" IS A MUSIC PRODUCTION WHICH (A) ENGAGES
AT LEAST FIVE MUSIC PROFESSIONALS IN THE PROCESS OF CREATING AND PREPAR-
ING  FOR COMMERCIAL RELEASE A SOUND RECORDING OR ANY RELATED MUSIC VIDEO
OR (B) INCURS ELIGIBLE PRODUCTION COSTS OF AT LEAST SEVEN THOUSAND  FIVE
HUNDRED  DOLLARS IN THE MCTD OR $3,750 OUTSIDE THE MCTD IN THE 12 MONTHS
PRECEDING THE DATE ON WHICH THE CREDIT IS CLAIMED.
  23. "ELIGIBLE MUSIC  PRODUCTION  PROJECT"  MEANS  A  MUSIC  PRODUCTION
PROJECT  FOR  WHICH  AT  LEAST FIFTY PERCENT OF ITS PRODUCTION COSTS ARE
INCURRED AND PAID IN NEW YORK.
  24. "ELIGIBLE PRODUCTION COSTS" ARE PRODUCTION COSTS INCURRED  IN  NEW
YORK  STATE  AND  INCLUDES COSTS PAID AND INCURRED FOR TANGIBLE PROPERTY
AND SERVICES USED IN THE PRODUCTION OF A  MUSIC  PRODUCTION,  INCLUDING:
STUDIO  RENTAL  FEES  AND RELATED COSTS; INSTRUMENT AND EQUIPMENT RENTAL
FEES; PRODUCTION SESSION FEES  FOR  MUSICIANS,  SONGWRITERS,  COMPOSERS,
ARRANGERS,  MUSIC  PRODUCERS,  PROGRAMMERS,  ENGINEERS, AND TECHNICIANS;
LICENSING FEES FOR SAMPLES;  INTERPOLATIONS  OR  OTHER  MUSIC  CLEARANCE
COSTS; MIXING AND MASTERING SERVICES OF MUSIC PRODUCTIONS; MARKETING AND
PROMOTION  COSTS  DIRECTLY  ASSOCIATED  WITH  A NEWLY CREATED WORK BEING
PREPARED FOR COMMERCIAL PRODUCTION (PROVIDED, HOWEVER, THAT SUCH MARKET-
ING AND PROMOTION COSTS SHALL NOT EXCEED  25%  OF  THE  TOTAL  EXCELSIOR
MUSIC  PRODUCTION  TAX CREDIT FOR AN ELIGIBLE MUSIC PRODUCTION PROJECT);
TRANSPORTATION EXPENDITURES DIRECTLY RELATED  TO  MUSIC  PRODUCTION  AND
PROVIDED AT OR TO THE SITE OF SUCH MUSIC PRODUCTION; AND OTHER RECORDING
AND  PRODUCTION  COSTS  WHICH  ARE  SUBJECT  TO  RECOUPMENT  PURSUANT TO
CONTRACT. PRODUCTION COSTS DO NOT INCLUDE:  COSTS FOR TANGIBLE  PROPERTY
OR  SERVICES USED OR PERFORMED OUTSIDE OF THIS STATE; MASTERING OR POST-
PRODUCTION EXPENDITURES FOR PROJECTS THAT WERE NOT  PRINCIPALLY  TRACKED
AND  RECORDED  IN  THIS  STATE;  ROYALTIES PAID TO ARTISTS AND PRODUCERS
FOLLOWING RECOUPMENT PURSUANT TO CONTRACT; OR ANY COSTS ASSOCIATED  WITH
MANUFACTURING,  DUPLICATION,  PACKAGING,  DISTRIBUTION,  OR  TOURING NOT
SPECIFICALLY OUTLINED ABOVE. WITH RESPECT TO THE PRODUCTION OF  A  MUSIC
VIDEO,  PRODUCTION COSTS ARE THOSE AS DEFINED IN PARAGRAPH TWO OF SUBDI-
VISION (B) OF SECTION TWENTY-FOUR OF THE TAX LAW.
  25. "MUSIC PRODUCTION ENTITY" INCLUDES A CORPORATION, SOLE PROPRIETOR-
SHIP, PARTNERSHIP, LIMITED PARTNERSHIP, LIMITED  LIABILITY  COMPANY,  OR
OTHER ENTITY ENGAGED IN MUSIC PRODUCTION.
  26.  "ELIGIBLE  MUSIC  PRODUCTION ENTITY" IS A MUSIC PRODUCTION ENTITY
WHICH INCURS WITHIN THE STATE AT LEAST TWENTY-FIVE THOUSAND  DOLLARS  IN
ELIGIBLE  PRODUCTION  COSTS  WITHIN THE MCTD OR AT LEAST TWELVE THOUSAND
FIVE HUNDRED DOLLARS OUTSIDE THE MCTD IN THE TAXABLE YEAR IN  WHICH  THE
ENTITY  COMPLETES ELIGIBLE MUSIC PRODUCTION PROJECTS. TWO OR MORE ELIGI-
BLE MUSIC PRODUCTION ENTITIES MAY BE ELIGIBLE FOR CREDIT WITH RESPECT TO
ITS OWN ELIGIBLE PRODUCTION COSTS ON A MUSIC PRODUCTION PROJECT PROVIDED
THAT EACH MEETS THE REQUIREMENTS FOR OBTAINING A CREDIT WITH RESPECT  TO
THE PROJECT.

S. 5450                             3

  27. "MUSIC PROFESSIONALS" ARE PERSONS WHO DERIVE THE MAJORITY OF THEIR
INCOME  FROM  MUSIC CREATION, PERFORMANCE, PRODUCTION AND RELATED ACTIV-
ITIES AND INCLUDE, BUT ARE NOT LIMITED  TO,  SINGERS,  INSTRUMENTALISTS,
SONGWRITERS,  PRODUCERS,  SOUND ENGINEERS AND OTHER TECHNICIANS INVOLVED
IN RECORDING, EDITING, MIXING AND MASTERING SOUND RECORDINGS.
  28. "AN EMERGING ARTIST" IS DEFINED AS AN ARTIST WHO HAS NOT PREVIOUS-
LY  SOLD  IN EXCESS OF FIFTY THOUSAND COPIES OF HIS OR HER ALBUMS IN THE
UNITED STATES.  THE NUMBER OF COPIES WILL INCLUDE ALL  ALBUMS  THAT  THE
ARTIST  COMMERCIALLY  RELEASED  IN  THE  UNITED STATES AND BE CALCULATED
BASED UPON PUBLICLY AVAILABLE METRICS WIDELY  RECOGNIZED  IN  THE  MUSIC
INDUSTRY  PROVIDED  THAT  IT TAKES INTO ACCOUNT ALL CONSUMPTION ACTIVITY
INCLUDING ON-DEMAND STREAMING AND DIGITAL TRACK SALES.
  29. "EMERGING ARTIST PROJECT" MEANS A PROJECT  IN  WHICH  THE  PRIMARY
ARTIST  IS AN EMERGING ARTIST. IF THE PROJECT IS PERFORMED BY A GROUP OF
ARTISTS, IT IS AN EMERGING ARTIST PROJECT IF MORE THAN FIFTY PERCENT  OF
THE GROUP'S MEMBERS ARE EMERGING ARTISTS.
  S  4. Subdivision 3 of section 353 of the economic development law, as
amended by section 2 of part K of chapter 59 of the  laws  of  2015,  is
amended to read as follows:
  3.  For  the  purposes of this article, in order to participate in the
excelsior jobs program, a business  entity  operating  predominantly  in
manufacturing  must  create at least ten net new jobs; a business entity
operating predominately in agriculture must create at least five net new
jobs; a business entity operating predominantly as a  financial  service
data  center  or  financial services customer back office operation must
create at least fifty net new jobs; a business entity operating predomi-
nantly in scientific research and development must create at least  five
net  new  jobs;  a  business  entity operating predominantly in software
development must create at least five net new jobs;  a  business  entity
creating  or expanding back office operations must create at least fifty
net new jobs; a  business  entity  operating  [predominately]  in  music
production  must  [create  at least five net new jobs;] INCUR WITHIN THE
STATE AT LEAST TWENTY-FIVE THOUSAND DOLLARS IN ELIGIBLE PRODUCTION COSTS
WITHIN THE MCTD OR AT LEAST TWELVE THOUSAND FIVE HUNDRED DOLLARS OUTSIDE
THE MCTD IN THE TAXABLE YEAR IN WHICH THE ENTITY COMPLETES  AN  ELIGIBLE
MUSIC  PRODUCTION  PROJECT; a business entity operating predominantly as
an entertainment company must create or obtain at least one hundred  net
new jobs; or a business entity operating predominantly as a distribution
center  in  the  state  must  create at least seventy-five net new jobs,
notwithstanding subdivision five of this section; or a  business  entity
must be a regionally significant project as defined in this article; or
  S  5.  Subdivisions 5, 6 and 7 of section 355 of the economic develop-
ment law are renumbered to be subdivisions 6, 7 and 8 and a new subdivi-
sion 5 is added to read as follows:
  5. EXCELSIOR MUSIC PRODUCTION TAX CREDIT COMPONENT.  (A)  AN  ELIGIBLE
MUSIC  PRODUCTION  ENTITY  MAY  CLAIM A CREDIT FOR EACH MUSIC PRODUCTION
PROJECT IN WHICH (I) ELIGIBLE PRODUCTION COSTS INCURRED  IN  THE  TWELVE
MONTHS  PRECEDING  THE  DATE ON WHICH THE CREDIT IS CLAIMED ARE AT LEAST
SEVEN THOUSAND FIVE HUNDRED DOLLARS  IF  INCURRED  IN  THE  METROPOLITAN
COMMUTER  TRANSPORTATION  DISTRICT OR THREE THOUSAND SEVEN HUNDRED FIFTY
DOLLARS IF INCURRED OUTSIDE OF THE METROPOLITAN COMMUTER  TRANSPORTATION
DISTRICT.
  (B)  THE  AMOUNT OF SUCH CREDIT IS EQUAL TO THE SUM OF (I) THE PRODUCT
(OR PRO RATA SHARE OF THE PRODUCT, IN THE CASE OF A MEMBER OF A PARTNER-
SHIP OR LIMITED LIABILITY COMPANY) OF TWENTY-FIVE PERCENT AND THE ELIGI-
BLE PRODUCTION COSTS OF EACH MUSIC PRODUCTION PROJECT IN  THE  METROPOL-

S. 5450                             4

ITAN  COMMUTER TRANSPORTATION DISTRICT AND (II) THE PRODUCT (OR PRO RATA
SHARE OF THE PRODUCT, IN THE CASE OF A MEMBER OF A PARTNERSHIP OR LIMIT-
ED LIABILITY COMPANY) OF THIRTY-FIVE PERCENT AND THE ELIGIBLE PRODUCTION
COSTS OF EACH MUSIC PRODUCTION PROJECT OUTSIDE THE METROPOLITAN COMMUTER
TRANSPORTATION DISTRICT.
  (C)  ELIGIBLE  PRODUCTION  COSTS  RELATED TO EMERGING ARTISTS PROJECTS
SHALL BE  ELIGIBLE  FOR  A  CREDIT  OF  TEN  PERCENT  OF  SUCH  ELIGIBLE
PRODUCTION  COSTS  IN ADDITION TO THE CREDITS SPECIFIED IN PARAGRAPH (B)
OF THIS SUBDIVISION.
  (D) NO COSTS USED BY AN ENTERTAINMENT COMPANY AS  THE  BASIS  FOR  THE
ALLOWANCE  OF  A  TAX  CREDIT DESCRIBED IN THIS SECTION SHALL BE USED BY
SUCH MUSIC PRODUCTION ENTITY TO CLAIM ANY OTHER CREDIT ALLOWED  PURSUANT
TO THE TAX LAW.
  S  6.  Subdivision  (a)  of  section  31 of the tax law, as amended by
section 7 of part G of chapter 61 of the laws of 2011, the opening para-
graph as amended by section 47 of part A of chapter 59 of  the  laws  of
2014, is amended to read as follows:
  (a)  General.  A  taxpayer  subject  to  tax under section one hundred
eighty-five, article nine-A, twenty-two or thirty-three of this  chapter
shall  be  allowed a credit against such tax, pursuant to the provisions
referenced in subdivision (g) of this section. The amount of the credit,
allowable for up to ten consecutive taxable years, is  the  sum  of  the
following [four] FIVE credit components:
  (1) the excelsior jobs tax credit component;
  (2) the excelsior investment tax credit component;
  (3) the excelsior research and development tax credit component; [and]
  (4) the excelsior real property tax credit component; AND
  (5) THE EXCELSIOR MUSIC PRODUCTION TAX CREDIT COMPONENT.
  S  7.  Subdivision  (a)  of  section  31 of the tax law, as amended by
section 7 of part S of chapter 59 of the laws of 2014, the opening para-
graph as separately amended by section 47 of part A of chapter 59 of the
laws of 2014, is amended to read as follows:
  (a) General. A taxpayer subject to tax under article  nine-A,  twenty-
two  or  thirty-three  of this chapter shall be allowed a credit against
such tax, pursuant to the provisions referenced in  subdivision  (g)  of
this  section. The amount of the credit, allowable for up to ten consec-
utive taxable years, is the sum of  the  following  [four]  FIVE  credit
components:
  (1) the excelsior jobs tax credit component;
  (2) the excelsior investment tax credit component;
  (3) the excelsior research and development tax credit component; [and]
  (4) the excelsior real property tax credit component; AND
  (5) THE EXCELSIOR MUSIC PRODUCTION TAX CREDIT COMPONENT.
  S  8. This act shall take effect immediately; provided that the amend-
ments to subdivision (a) of section 31 of the tax law  made  by  section
seven  of  this  act  shall take effect on the same date and in the same
manner as section 7 of part S of chapter 59 of the laws of  2014,  takes
effect.