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

                                 5141--A

                       2011-2012 Regular Sessions

                            I N  S E N A T E

                               May 3, 2011
                               ___________

Introduced  by  Sen. MAZIARZ -- read twice and ordered printed, and when
  printed to be committed to the Committee on Investigations and Govern-
  ment Operations -- recommitted to the Committee on Investigations  and
  Government  Operations  in  accordance  with  Senate Rule 6, sec. 8 --
  committee discharged, bill amended, ordered reprinted as  amended  and
  recommitted to said committee

AN  ACT  to  amend  the  tax law, in relation to the qualified solar and
  energy storage manufacturer facilities and operations credit

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

  Section  1.  Section  210  of  the  tax law is amended by adding a new
subdivision 12-H to read as follows:
  12-H.  QUALIFIED SOLAR AND ENERGY STORAGE MANUFACTURER FACILITIES  AND
OPERATIONS  CREDIT.  (A)  A  TAXPAYER THAT IS WHOLE OR PART OF AN ENTITY
THAT SERVES AS THE PRINCIPAL OPERATOR OF A FACILITY PRIMARILY  FUNCTION-
ING  TO FABRICATE SOLAR ENERGY EQUIPMENT OR ENERGY STORAGE EQUIPMENT AND
THAT MEETS THE ELIGIBILITY REQUIREMENTS IN PARAGRAPH (B) OF THIS  SUBDI-
VISION,  SHALL BE ALLOWED A CREDIT AGAINST THE TAX IMPOSED BY THIS ARTI-
CLE. THE AMOUNT OF CREDIT SHALL BE EQUAL TO THE SUM OF THE AMOUNTS SPEC-
IFIED IN PARAGRAPHS (C) AND (D) OF THIS SUBDIVISION ATTRIBUTABLE TO  THE
TAXPAYER  SUBJECT  TO  THE LIMITATIONS IN PARAGRAPH (E) OF THIS SUBDIVI-
SION. FOR THE PURPOSES OF THIS SUBDIVISION SOLAR ENERGY EQUIPMENT  SHALL
MEAN THE MANUFACTURING OF MATERIAL COMPONENTS IN NEW YORK STATE DESIGNED
TO  PRODUCE  ELECTRICITY  UTILIZING SOLAR RADIATION AS THE ENERGY SOURCE
FOR SUCH ELECTRICITY; AND ENERGY STORAGE EQUIPMENT SHALL MEAN  MATERIALS
AND  DEVICES INTENDED TO STORE SOME FORM OF ENERGY RELATED TO NEW ENERGY
TECHNOLOGIES AS DESCRIBED IN SUBDIVISION ONE OF SECTION EIGHTEEN HUNDRED
FIFTY-FOUR OF THE PUBLIC AUTHORITIES  LAW.  SUCH  EQUIPMENT  MAY  EMPLOY
ELECTRICAL, ELECTROCHEMICAL, SUPERCAPACITOR, COMPRESSED GAS, MECHANICAL,
THERMAL  OR  OTHER  DEMONSTRABLE  MEANS  SINGLY OR IN COMBINATION.   THE
DETERMINATION OF WHETHER SOLAR ENERGY EQUIPMENT OR ENERGY STORAGE EQUIP-

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD11378-05-2
              

S. 5141--A                          2

MENT QUALIFIES FOR ELIGIBLE COSTS UNDER THIS SUBDIVISION SHALL BE DETER-
MINED BY THE COMMISSIONER AND, IF REQUESTED  BY  THE  COMMISSIONER,  THE
PRESIDENT OF THE NEW YORK STATE ENERGY RESEARCH AND DEVELOPMENT AUTHORI-
TY.
  (B)  AN  ELIGIBLE  TAXPAYER  SHALL  (I)  HAVE  MORE  THAN  ONE HUNDRED
FULL-TIME EMPLOYEES EMPLOYED IN NEW YORK STATE, AND (II) HAVE A RATIO OF
RESEARCH AND DEVELOPMENT FUNDS TO NET SALES, AS REFERRED TO  IN  SECTION
THIRTY-ONE  HUNDRED TWO-E OF THE PUBLIC AUTHORITIES LAW, WHICH EQUALS OR
EXCEEDS THREE PERCENT DURING ITS TAXABLE YEAR.
  (C) AN ELIGIBLE TAXPAYER SHALL BE ALLOWED  A  CREDIT  FOR  TWENTY  PER
CENTUM  OF THE ATTRIBUTABLE COST OR SIMILAR BASIS FOR FEDERAL INCOME TAX
PURPOSES OF RESEARCH  AND  DEVELOPMENT  AND  MANUFACTURING  PROPERTY  AS
DEFINED  IN  PARAGRAPH (B) OF SUBDIVISION TWELVE OF THIS SECTION THAT IS
ACQUIRED BY  THE TAXPAYER BY PURCHASE AS DEFINED IN  SECTION  179(D)  OF
THE INTERNAL REVENUE CODE AND PLACED IN SERVICE DURING THE TAXABLE YEAR.
PROVIDED,  HOWEVER, FOR THE PURPOSES OF THIS PARAGRAPH ONLY, AN ELIGIBLE
TAXPAYER SHALL BE ALLOWED A  CREDIT  FOR  SUCH  PERCENTAGE  OF  THE  (I)
ATTRIBUTABLE  COST  OR SIMILAR BASIS FOR FEDERAL INCOME TAX PURPOSES FOR
PROPERTY USED IN THE TESTING OR INSPECTION OF MATERIALS AND PRODUCTS,
  (II) THE  ATTRIBUTABLE  COSTS  OR  EXPENSES  ASSOCIATED  WITH  QUALITY
CONTROL OF THE RESEARCH AND DEVELOPMENT OR MANUFACTURING OPERATIONS,
  (III) ATTRIBUTABLE FEES FOR USE OF SOPHISTICATED TECHNOLOGY FACILITIES
AND PROCESSES,
  (IV)  ATTRIBUTABLE  FEES  FOR  THE  PRODUCTION  OR EVENTUAL COMMERCIAL
DISTRIBUTION OF MATERIALS AND  PRODUCTS  RESULTING  FROM  THE  QUALIFIED
MANUFACTURING ACTIVITIES OF AN ELIGIBLE TAXPAYER.
  (V)  THE  COSTS,  EXPENSES  AND  OTHER  AMOUNTS  FOR WHICH A CREDIT IS
ALLOWED AND CLAIMED UNDER THIS PARAGRAPH SHALL NOT BE USED IN THE CALCU-
LATION OF ANY OTHER CREDIT ALLOWED UNDER THIS ARTICLE.
  (D) AN ELIGIBLE TAXPAYER SHALL BE ALLOWED A CREDIT FOR TEN PER  CENTUM
OF  "QUALIFIED  RESEARCH AND MANUFACTURING EXPENSES" PAID OR INCURRED BY
THE TAXPAYER IN THE TAXABLE YEAR. FOR THE PURPOSES OF THIS SECTION,  THE
TERM  "QUALIFIED RESEARCH AND MANUFACTURING EXPENSES" SHALL MEAN ATTRIB-
UTABLE EXPENSES ASSOCIATED  WITH  IN-HOUSE  RESEARCH  AND  MANUFACTURING
PROCESSES,  AND  ATTRIBUTABLE COSTS ASSOCIATED WITH THE DISSEMINATION OF
THE RESULTS OF THE PRODUCTS THAT DIRECTLY RESULT FROM SUCH RESEARCH  AND
DEVELOPMENT  AND/OR  MANUFACTURING  ACTIVITIES;  PROVIDED, HOWEVER, THAT
SUCH COSTS SHALL NOT  INCLUDE  ADVERTISING  OR  PROMOTION  THROUGH  PAID
MEDIA.    IN  ADDITION,  COSTS ASSOCIATED WITH THE PREPARATION OF PATENT
APPLICATIONS, PATENT APPLICATION  FILING  FEES,  PATENT  RESEARCH  FEES,
PATENT EXAMINATIONS FEES, PATENT POST ALLOWANCE FEES, PATENT MAINTENANCE
FEES, AND GRANT APPLICATION EXPENSES AND FEES SHALL BE ELIGIBLE FOR SUCH
CREDIT.   IN NO CASE SHALL THE CREDIT ALLOWED UNDER THIS PARAGRAPH APPLY
TO EXPENSES FOR LITIGATION OR THE CHALLENGE OF ANOTHER  ENTITY'S  INTEL-
LECTUAL PROPERTY RIGHTS, OR FOR CONTRACT EXPENSES INVOLVING OUTSIDE PAID
CONSULTANTS.    THE COSTS, EXPENSES AND OTHER AMOUNTS FOR WHICH A CREDIT
IS ALLOWED AND CLAIMED UNDER THIS PARAGRAPH SHALL NOT  BE  USED  IN  THE
CALCULATION OF ANY OTHER CREDIT ALLOWED UNDER THIS ARTICLE.
  (E)  AN ELIGIBLE TAXPAYER MAY CLAIM CREDITS UNDER THIS SUBDIVISION FOR
FOUR CONSECUTIVE TAXABLE YEARS. IN NO CASE SHALL THE CREDIT  ALLOWED  BY
THIS  SUBDIVISION  TO  A TAXPAYER EXCEED TWENTY-FIVE MILLION DOLLARS PER
YEAR.
  (F) THE CREDIT ALLOWED UNDER THIS SUBDIVISION  FOR  ANY  TAXABLE  YEAR
SHALL  NOT  REDUCE  THE TAX DUE FOR SUCH YEAR TO LESS THAN THE HIGHER OF
THE AMOUNTS PRESCRIBED IN PARAGRAPHS (C) AND (D) OF SUBDIVISION  ONE  OF
THIS SECTION. HOWEVER, IF THE AMOUNT OF CREDIT ALLOWED UNDER THIS SUBDI-

S. 5141--A                          3

VISION  FOR  ANY TAXABLE YEAR REDUCES THE TAX TO SUCH AMOUNT, ANY AMOUNT
OF CREDIT NOT DEDUCTIBLE IN SUCH TAXABLE YEAR SHALL  BE  TREATED  AS  AN
OVERPAYMENT  OF  TAX  TO  BE CREDITED OR REFUNDED IN ACCORDANCE WITH THE
PROVISIONS OF SECTION TEN HUNDRED EIGHTY-SIX OF THIS CHAPTER.  PROVIDED,
HOWEVER,  THE PROVISIONS OF SUBSECTION (C) OF SECTION TEN HUNDRED EIGHT-
Y-EIGHT OF THIS CHAPTER NOTWITHSTANDING, NO INTEREST SHALL BE PAID THER-
EON.
  S 2. Section 606 of the tax law is amended by adding a new  subsection
(uu) to read as follows:
  (UU)  QUALIFIED  SOLAR  AND ENERGY STORAGE MANUFACTURER FACILITIES AND
OPERATIONS CREDIT. (1) A TAXPAYER WHO IS A MEMBER OF AN ENTITY  CONSIST-
ING  OF ONE OR MORE TAXPAYERS THAT SERVES AS THE PRINCIPAL OPERATOR OF A
FACILITY PRIMARILY FUNCTIONING TO FABRICATE SOLAR  ENERGY  EQUIPMENT  OR
ENERGY  STORAGE EQUIPMENT AND THAT MEETS THE ELIGIBILITY REQUIREMENTS IN
PARAGRAPH TWO OF THIS SUBSECTION, SHALL BE ALLOWED A CREDIT AGAINST  THE
TAX  IMPOSED BY THIS ARTICLE. THE AMOUNT OF CREDIT SHALL BE EQUAL TO THE
SUM (OR PRO RATA SHARE OF THE SUM IN THE CASE OF A PARTNERSHIP)  OF  THE
AMOUNTS  SPECIFIED  IN  PARAGRAPHS  THREE  AND  FOUR  OF THIS SUBSECTION
SUBJECT TO THE LIMITATIONS IN PARAGRAPH FIVE OF THIS SUBSECTION. FOR THE
PURPOSES OF THIS SUBSECTION SOLAR ENERGY EQUIPMENT SHALL MEAN THE  MANU-
FACTURING  OF  MATERIAL COMPONENTS IN NEW YORK STATE DESIGNED TO PRODUCE
ELECTRICITY UTILIZING SOLAR RADIATION AS  THE  ENERGY  SOURCE  FOR  SUCH
ELECTRICITY;  AND  ENERGY  STORAGE  EQUIPMENT  SHALL  MEAN MATERIALS AND
DEVICES INTENDED TO STORE SOME FORM OF  ENERGY  RELATED  TO  NEW  ENERGY
TECHNOLOGIES AS DESCRIBED IN SUBDIVISION ONE OF SECTION EIGHTEEN HUNDRED
FIFTY-FOUR  OF  THE  PUBLIC AUTHORITIES LAW.   SUCH EQUIPMENT MAY EMPLOY
ELECTRICAL, ELECTROCHEMICAL, SUPERCAPACITOR, COMPRESSED GAS, MECHANICAL,
THERMAL OR OTHER MEANS SINGLY OR IN COMBINATION.  THE  DETERMINATION  OF
WHETHER SOLAR ENERGY EQUIPMENT OR ENERGY STORAGE EQUIPMENT QUALIFIES FOR
ELIGIBLE  COSTS UNDER THIS SUBSECTION SHALL BE DETERMINED BY THE COMMIS-
SIONER, AND, IF REQUESTED BY THE COMMISSIONER, THE PRESIDENT OF THE  NEW
YORK STATE ENERGY RESEARCH AND DEVELOPMENT AUTHORITY.
  (2)  AN ELIGIBLE ENTITY SHALL (I) HAVE MORE THAN ONE HUNDRED FULL-TIME
EMPLOYEES EMPLOYED IN NEW YORK STATE, AND (II) HAVE A RATIO OF  RESEARCH
AND DEVELOPMENT FUNDS TO NET SALES, AS REFERRED TO IN SECTION THIRTY-ONE
HUNDRED  TWO-E  OF  THE  PUBLIC AUTHORITIES LAW, WHICH EQUALS OR EXCEEDS
THREE PERCENT DURING ITS TAXABLE YEAR.
  (3) AN ELIGIBLE TAXPAYER SHALL BE ALLOWED  A  CREDIT  FOR  TWENTY  PER
CENTUM  OF  THE  COST  OR  SIMILAR BASIS FOR FEDERAL INCOME TAX PURPOSES
INCURRED BY THE ENTITY FOR RESEARCH AND  DEVELOPMENT  AND  MANUFACTURING
PROPERTY  AS  DEFINED  IN PARAGRAPH (B) OF SUBDIVISION TWELVE OF SECTION
TWO HUNDRED TEN OF THIS CHAPTER THAT IS ACQUIRED BY PURCHASE AS  DEFINED
IN  SECTION  179(D)  OF  THE INTERNAL REVENUE CODE AND PLACED IN SERVICE
DURING THE TAXABLE YEAR. PROVIDED, HOWEVER, FOR  THE  PURPOSES  OF  THIS
PARAGRAPH  ONLY, AN ELIGIBLE TAXPAYER SHALL BE ALLOWED A CREDIT FOR SUCH
PERCENTAGE OF THE (I) COST OR  SIMILAR  BASIS  FOR  FEDERAL  INCOME  TAX
PURPOSES FOR PROPERTY USED IN THE TESTING OR INSPECTION OF MATERIALS AND
PRODUCTS,
  (II)  THE  COSTS  OR  EXPENSES  ASSOCIATED WITH QUALITY CONTROL OF THE
RESEARCH AND DEVELOPMENT OR MANUFACTURING OPERATIONS,
  (III) FEES FOR USE OF SOPHISTICATED TECHNOLOGY  FACILITIES  AND  PROC-
ESSES,
  (IV)  FEES  FOR  THE PRODUCTION OR EVENTUAL COMMERCIAL DISTRIBUTION OF
MATERIALS AND PRODUCTS RESULTING FROM  THE  ACTIVITIES  OF  AN  ELIGIBLE
TAXPAYER  AS LONG AS SUCH ACTIVITIES FALL UNDER THE ACTIVITIES LISTED IN

S. 5141--A                          4

PARAGRAPH (B) OF SUBDIVISION ONE OF SECTION THIRTY-ONE HUNDRED TWO-E  OF
THE PUBLIC AUTHORITIES LAW.
  (V)  THE  COSTS,  EXPENSES  AND  OTHER  AMOUNTS  FOR WHICH A CREDIT IS
ALLOWED AND CLAIMED UNDER THIS PARAGRAPH SHALL NOT BE USED IN THE CALCU-
LATION OF ANY OTHER CREDIT ALLOWED UNDER THIS ARTICLE.
  (4) AN ELIGIBLE TAXPAYER SHALL BE ALLOWED A CREDIT FOR TEN PER  CENTUM
OF  "QUALIFIED  RESEARCH AND MANUFACTURING EXPENSES" PAID OR INCURRED BY
THE ENTITY IN THE TAXABLE YEAR. FOR THE PURPOSES OF  THIS  SECTION,  THE
TERM "QUALIFIED RESEARCH AND MANUFACTURING EXPENSES" SHALL MEAN EXPENSES
ASSOCIATED WITH IN-HOUSE RESEARCH AND MANUFACTURING PROCESSES, AND COSTS
ASSOCIATED  WITH  THE  DISSEMINATION OF THE RESULTS OF THE PRODUCTS THAT
DIRECTLY RESULT FROM SUCH RESEARCH AND DEVELOPMENT AND/OR  MANUFACTURING
ACTIVITIES;  PROVIDED, HOWEVER, THAT SUCH COSTS SHALL NOT INCLUDE ADVER-
TISING OR PROMOTION THROUGH PAID MEDIA. IN  ADDITION,  COSTS  ASSOCIATED
WITH  THE  PREPARATION OF PATENT APPLICATIONS, PATENT APPLICATION FILING
FEES, PATENT RESEARCH FEES, PATENT EXAMINATIONS FEES, PATENT POST ALLOW-
ANCE FEES, PATENT MAINTENANCE FEES, AND GRANT APPLICATION  EXPENSES  AND
FEES  SHALL  BE  ELIGIBLE  FOR  SUCH CREDIT. IN NO CASE SHALL THE CREDIT
ALLOWED UNDER THIS PARAGRAPH APPLY TO EXPENSES  FOR  LITIGATION  OR  THE
CHALLENGE  OF  ANOTHER  ENTITY'S  INTELLECTUAL  PROPERTY  RIGHTS, OR FOR
CONTRACT  EXPENSES  INVOLVING  OUTSIDE  PAID  CONSULTANTS.  THE   COSTS,
EXPENSES  AND  OTHER  AMOUNTS  FOR WHICH A CREDIT IS ALLOWED AND CLAIMED
UNDER THIS PARAGRAPH SHALL NOT BE USED IN THE CALCULATION OF  ANY  OTHER
CREDIT ALLOWED UNDER THIS ARTICLE.
  (5)  AN  ELIGIBLE TAXPAYER MAY CLAIM CREDITS UNDER THIS SUBSECTION FOR
FOUR CONSECUTIVE TAXABLE YEARS. IN NO CASE SHALL THE CREDIT  ALLOWED  BY
THIS  SUBDIVISION  TO  A TAXPAYER EXCEED TWENTY-FIVE MILLION DOLLARS PER
YEAR. IF THE TAXPAYER IS A PARTNER IN A PARTNERSHIP OR SHAREHOLDER OF  A
NEW  YORK S CORPORATION, THEN THE CAP IMPOSED BY THIS PARAGRAPH SHALL BE
APPLIED AT THE ENTITY LEVEL, SO THAT THE AGGREGATE CREDIT ALLOWED TO ALL
THE PARTNERS, SHAREHOLDERS, OR OTHER MEMBERS OF EACH SUCH ENTITY IN  THE
TAXABLE YEAR DOES NOT EXCEED TWENTY-FIVE MILLION DOLLARS PER YEAR FOR UP
TO FOUR CONSECUTIVE TAXABLE YEARS.
  (6)  IF  THE  AMOUNT  OF  CREDIT ALLOWED UNDER THIS SUBSECTION FOR ANY
TAXABLE YEAR SHALL EXCEED THE TAXPAYER'S TAX FOR SUCH YEAR,  THE  EXCESS
SHALL  BE TREATED AS AN OVERPAYMENT OF TAX TO BE CREDITED OR REFUNDED IN
ACCORDANCE WITH THE PROVISIONS OF SECTION SIX HUNDRED EIGHTY-SIX OF THIS
ARTICLE, PROVIDED, HOWEVER, THAT NO INTEREST SHALL BE PAID THEREON.
  S 3. Subparagraph (B) of paragraph 1 of subsection (i) of section  606
of  the  tax  law  is  amended by adding a new clause (xxxiv) to read as
follows:
  (XXXIV) CREDIT FOR                 AMOUNT OF CREDIT UNDER
QUALIFIED SOLAR AND ENERGY STORAGE   SUBDIVISION TWELVE-H OF
MANUFACTURER FACILITIES              SECTION TWO HUNDRED TEN
AND OPERATIONS CREDIT
UNDER SUBSECTION (UU)
  S 4. This act shall take effect immediately and shall apply to taxable
years commencing on or after January 1, 2013.