S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                    532
 
                        2019-2020 Regular Sessions
 
                           I N  A S S E M B L Y
 
                                (PREFILED)
 
                              January 9, 2019
                                ___________
 
 Introduced by M. of A. CAHILL -- read once and referred to the Committee
   on Ways and Means
 
 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-B  of the tax law is amended by adding a new
 subdivision 53 to read as follows:
   53.  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-
 MENT QUALIFIES FOR ELIGIBLE COSTS UNDER THIS SUBDIVISION SHALL BE DETER-
 MINED BY THE COMMISSIONER AND, IF REQUESTED  BY  THE  COMMISSIONER,  THE
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
              

                                                            LBD03102-01-9

 A. 532                              2
 
 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 CLAUSE (B) OF SUBPARAGRAPH (II) OF PARAGRAPH (B) OF  SUBDIVI-
 SION  ONE  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 FEDER-
 AL 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  AMOUNT
 PRESCRIBED  IN  PARAGRAPH  (D) OF SUBDIVISION ONE OF SECTION TWO HUNDRED
 TEN OF THIS ARTICLE.  HOWEVER, IF THE AMOUNT  OF  CREDIT  ALLOWED  UNDER
 THIS  SUBDIVISION  FOR  ANY TAXABLE YEAR REDUCES THE TAX TO SUCH AMOUNT,

 A. 532                              3
 
 ANY AMOUNT OF CREDIT NOT DEDUCTIBLE IN SUCH TAXABLE YEAR SHALL BE TREAT-
 ED AS AN OVERPAYMENT OF TAX TO BE CREDITED  OR  REFUNDED  IN  ACCORDANCE
 WITH  THE PROVISIONS OF SECTION ONE THOUSAND EIGHTY-SIX OF THIS CHAPTER.
 PROVIDED, HOWEVER, THE PROVISIONS OF SUBSECTION (C) OF SECTION ONE THOU-
 SAND  EIGHTY-EIGHT OF THIS CHAPTER NOTWITHSTANDING, NO INTEREST SHALL BE
 PAID THEREON.
   § 2. Section 606 of the tax law is amended by adding a new  subsection
 (jjj) to read as follows:
   (JJJ)  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 CLAUSE (B) OF SUBPARAGRAPH (II) OF PARAGRAPH (B)
 OF SUBDIVISION ONE OF SECTION TWO HUNDRED TEN-B OF THIS CHAPTER THAT  IS
 ACQUIRED BY PURCHASE AS DEFINED IN SECTION 179(D) OF THE INTERNAL REVEN-
 UE  CODE AND PLACED IN SERVICE DURING THE TAXABLE YEAR. PROVIDED, HOWEV-
 ER, 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
 PARAGRAPH  (B) OF SUBDIVISION ONE OF SECTION THIRTY-ONE HUNDRED TWO-E OF
 THE PUBLIC AUTHORITIES LAW.

 A. 532                              4
 
   (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.
   §  3. Subparagraph (B) of paragraph 1 of subsection (i) of section 606
 of the tax law is amended by adding a  new  clause  (xliv)  to  read  as
 follows:
 (XLIV) CREDIT FOR                    AMOUNT OF CREDIT UNDER
 QUALIFIED SOLAR AND ENERGY STORAGE   SUBDIVISION FIFTY-THREE
 MANUFACTURER FACILITIES              OF SECTION TWO HUNDRED
 AND OPERATIONS CREDIT                TEN-B
 UNDER SUBSECTION (JJJ)
   § 4. This act shall take effect immediately and shall apply to taxable
 years commencing on or after January 1, 2020.