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NYC 9/11 Public Portal Document [ . . ." I I rwrw a 212 373 2_902 TO 9-6865578 P.03.'03

Paul, Weiss, Rifldnd. Wharton & Garrison 10/3/01

NYC Theater Empowerment Credit The proposal outlined below is a temporary relief measure designed to encourage continued investment in Broadway and Off-Broadway theater. Always a risky proposition, theater investment has become too risky for many investors with the severe decline in tourism, and the attendant drop in theater attendance, following September 1 t . Because the credit is jobs based, in not only encourages investment, but specifically investment that saves and creates jobs.

Proposal: Make Broadway and Off-Broadway theaters empowerment zones eligible for a 20% credit on wages paid to eligible employees.

• The purpose of the credit is to encourage new productions, and thus the principal beneficiaries would be producers and their investors.

Eligible employees would include cast and crew compensated on a fixed basis, as well as other service providers, such as directors, choreographers and designers, compensated on a royalty basis. It would also include theater employees, such as ushers and ticket booth personnel, employed by the theater but compensated, indirectly, by the producer.

• Eligibility would depend on working in the theatei and associated rehearsal and production space. There would be no residency requirement or minimum period of employment as under the existing Empowerment Zone credit provision.

• Eligible wages would be the first [550,0003 per employee per year (as compared to 515,000 under the existing credit provision.).

• The credit would phase out following recoupment of a production's capital investment.

• The credit would apply to productions that have their official New York opening after September 11, 2001 and before December 31, 2003.

• Deductions for wages would be reduced by the amount claimed as a credit, consistent with the current provisions of the Empowerment Zone Credit.

Jeffrey B. Samuels (212) 373-3112 John F. Breglio (212) 373-3391

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