S T A T E O F N E W Y O R K
________________________________________________________________________
7690
2015-2016 Regular Sessions
I N A S S E M B L Y
May 22, 2015
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Introduced by M. of A. LENTOL -- read once and referred to the Committee
on Economic Development
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:
11. "Music production" means the [process of creating sound recordings
of at least eight minutes, recorded in professional sound studios,]
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD11135-01-5
A. 7690 2
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.
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,
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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-
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
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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.