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

                                  2513

                       2013-2014 Regular Sessions

                            I N  S E N A T E

                            January 18, 2013
                               ___________

Introduced  by  Sen. MAZIARZ -- read twice and ordered printed, and when
  printed to be committed to the Committee on Investigations and Govern-
  ment Operations

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-
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.
                                                           LBD03960-01-3

              

S. 2513                             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  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-
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

S. 2513                             3

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.
  S 2. Section 606 of the tax law is amended by adding a new  subsection
(vv) to read as follows:
  (VV)  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
PARAGRAPH (B) OF SUBDIVISION ONE OF SECTION THIRTY-ONE HUNDRED TWO-E  OF
THE PUBLIC AUTHORITIES LAW.

S. 2513                             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.
  S  3. Subparagraph (B) of paragraph 1 of subsection (i) of section 606
of the tax law is amended by adding a  new  clause  (xxxv)  to  read  as
follows:
(XXXV) 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 (VV)
  S 4. This act shall take effect immediately and shall apply to taxable
years commencing on or after January 1, 2014.