Relates to tax credits provided for solar energy system equipment; provides credit for the lease of solar energy equipment and the purchase of power generated by solar equipment.
TITLE OF BILL: An act to amend the tax law, in relation to tax credits provided for solar energy system equipment
PURPOSE: The purpose of this legislation is encourage homeowners to install and utilize solar energy equipment by allowing individuals who lease such equipment or purchase power under a written agreement with a third party to benefit from a solar equipment tax credit.
SUMMARY OF PROVISIONS: Section 1. Allows a taxpayer to qualify for a solar equipment tax credit in cases where the lease of solar equipment under a written agreement spans at least ten years or a power purchase agreement of at least ten years from a third party is in force. Additionally this section includes and clarifies expenditures for the lease of solar energy system equipment.
JUSTIFICATION: As we continue to move toward a greener economy it is very important that residents be encouraged to utilize renewable forms of energy. This should be true whether the taxpayer can afford to purchase and install renewable generation such as solar equipment or if it is more feasible for the individual to lease the equipment or contract with a provider to purchase power. using the tax code to incentivize the installation of solar equipment is the right way to encourage the development of the renewable energy industry.
In addition to the obvious benefits to the taxpayer, the use of more photovoltaic generation equipment will also benefit our environment by reducing the negative effects of greenhouse gas emissions as well and increasing our ability to become more energy independent.
LEGISLATIVE HISTORY: S.8025 of 2009-2010; Referred to Investigations & Government Operations
FISCAL IMPLICATIONS: Given the nature of how the credit will be taken and the fact that the leases and power purchase agreements that are effected all last more than ten years, it is estimated that this provision will have a fiscal impact of less than $1,000,000 annually.
EFFECTIVE DATE: This act shall take effect immediately.
STATE OF NEW YORK ________________________________________________________________________ 149--B 2011-2012 Regular Sessions IN SENATE (PREFILED) January 5, 2011 ___________Introduced by Sens. MAZIARZ, MONTGOMERY -- read twice and ordered print- ed, and when printed to be committed to the Committee on Investi- gations and Government Operations -- committee discharged, bill amended, ordered reprinted as amended and recommitted to said commit- tee -- committee discharged, bill amended, ordered reprinted as amended and recommitted to said committee AN ACT to amend the tax law, in relation to tax credits provided for solar energy system equipment THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: Section 1. Paragraphs 1 and 2 of subsection (g-1) of section 606 of the tax law, as amended by chapter 378 of the laws of 2005 and subpara- graph (B) of paragraph 2 as amended by chapter 251 of the laws of 2006, is amended to read as follows: (1) General. An individual taxpayer shall be allowed a credit against the tax imposed by this article equal to twenty-five percent of quali- fied solar energy system equipment expenditures, EXCEPT AS PROVIDED IN SUBPARAGRAPH (D) OF PARAGRAPH TWO OF THIS SUBSECTION. This credit shall not exceed three thousand seven hundred fifty dollars for qualified solar energy equipment placed in service before September first, two thousand six, and five thousand dollars for qualified solar energy equipment placed in service on or after September first, two thousand six. (2) Qualified solar energy system equipment expenditures. (A) The term "qualified solar energy system equipment expenditures" means expendi- tures for: (I) the purchase of solar energy system equipment which is installed in connection with residential property which is
[(i)](I) located in this state and [(ii)](II) which is used by the taxpayer as his or herEXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD00702-03-1 S. 149--B 2
principal residence at the time the solar energy system equipment is placed in service; (II) THE LEASE OF SOLAR ENERGY SYSTEM EQUIPMENT UNDER A WRITTEN AGREE- MENT THAT SPANS AT LEAST TEN YEARS WHERE SUCH EQUIPMENT OWNED BY A PERSON OTHER THAN THE TAXPAYER IS INSTALLED IN CONNECTION WITH RESIDEN- TIAL PROPERTY WHICH IS (I) LOCATED IN THIS STATE AND (II) WHICH IS USED BY THE TAXPAYER AS HIS OR HER PRINCIPAL RESIDENCE AT THE TIME THE SOLAR ENERGY SYSTEM EQUIPMENT IS PLACED IN SERVICE; OR (III) THE PURCHASE OF POWER UNDER A WRITTEN AGREEMENT THAT SPANS AT LEAST TEN YEARS WHEREUNDER THE POWER PURCHASED IS GENERATED BY SOLAR ENERGY SYSTEM EQUIPMENT OWNED BY A PERSON OTHER THAN THE TAXPAYER WHICH IS INSTALLED IN CONNECTION WITH RESIDENTIAL PROPERTY WHICH IS (I) LOCATED IN THIS STATE AND (II) WHICH IS USED BY THE TAXPAYER AS HIS OR HER PRINCIPAL RESIDENCE AT THE TIME THE SOLAR ENERGY SYSTEM EQUIPMENT IS PLACED IN SERVICE. (B) Such qualified expenditures shall include expenditures for materi- als, labor costs properly allocable to on-site preparation, assembly and original installation, architectural and engineering services, and designs and plans directly related to the construction or installation of the solar energy system equipment. (C) Such qualified expenditures FOR THE PURCHASE OF SOLAR ENERGY SYSTEM EQUIPMENT shall not include interest or other finance charges. (D) SUCH QUALIFIED EXPENDITURES FOR THE LEASE OF SOLAR ENERGY SYSTEM EQUIPMENT OR THE PURCHASE OF POWER UNDER AN AGREEMENT DESCRIBED IN CLAUSES (II) OR (III) OF SUBPARAGRAPH (A) OF THIS PARAGRAPH SHALL INCLUDE AN AMOUNT EQUAL TO ALL PAYMENTS MADE DURING THE TAXABLE YEAR UNDER SUCH AGREEMENT. PROVIDED, HOWEVER, SUCH CREDITS SHALL ONLY BE ALLOWED FOR FOURTEEN YEARS AFTER THE FIRST TAXABLE YEAR IN WHICH SUCH CREDIT IS ALLOWED. PROVIDED FURTHER, HOWEVER, THE TWENTY-FIVE PERCENT LIMITATION IN PARAGRAPH ONE OF THIS SUBSECTION SHALL ONLY APPLY TO THE TOTAL AGGREGATE AMOUNT OF ALL PAYMENTS TO BE MADE PURSUANT TO AN AGREE- MENT REFERENCED IN CLAUSES (II) OR (III) OF SUBPARAGRAPH (A) OF THIS PARAGRAPH, AND SHALL NOT APPLY TO INDIVIDUAL PAYMENTS MADE DURING A TAXABLE YEAR UNDER SUCH AGREEMENT EXCEPT TO THE EXTENT SUCH LIMITATION ON AN AGGREGATE BASIS HAS BEEN REACHED. S 2. This act shall take effect immediately.