S T A T E   O F   N E W   Y O R K
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                                  2905

                       2015-2016 Regular Sessions

                            I N  S E N A T E

                            January 30, 2015
                               ___________

Introduced  by  Sen.  ORTT  --  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 establishing  a  credit  for
  geothermal energy systems

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

  Section 1. Section 606 of the tax law  is  amended  by  adding  a  new
subsection (g-3) to read as follows:
  (G-3)  GEOTHERMAL  ENERGY SYSTEMS CREDIT.   (1) GENERAL. AN INDIVIDUAL
TAXPAYER SHALL BE ALLOWED A CREDIT AGAINST THE TAX IMPOSED BY THIS ARTI-
CLE EQUAL TO TWENTY-FIVE PERCENT OF QUALIFIED GEOTHERMAL  ENERGY  SYSTEM
EXPENDITURES, EXCEPT AS PROVIDED IN SUBPARAGRAPH (D) OF PARAGRAPH TWO OF
THIS  SUBSECTION. THIS CREDIT SHALL NOT EXCEED FIVE THOUSAND DOLLARS FOR
A QUALIFIED GEOTHERMAL ENERGY SYSTEM  PLACED  IN  SERVICE  ON  OR  AFTER
SEPTEMBER FIRST, TWO THOUSAND FIFTEEN.
  (2)  QUALIFIED  GEOTHERMAL  ENERGY  SYSTEMS EXPENDITURES. (A) THE TERM
"QUALIFIED GEOTHERMAL ENERGY  SYSTEM  EXPENDITURES"  MEANS  EXPENDITURES
FOR:
  (I)  THE  PURCHASE  OF  GEOTHERMAL  ENERGY  SYSTEM  EQUIPMENT 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 PRIN-
CIPAL  RESIDENCE  AT  THE TIME THE GEOTHERMAL ENERGY SYSTEM EQUIPMENT IS
PLACED IN SERVICE;
  (II) THE LEASE OF GEOTHERMAL ENERGY SYSTEM EQUIPMENT UNDER  A  WRITTEN
AGREEMENT  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 GEOTH-
ERMAL ENERGY SYSTEM EQUIPMENT IS PLACED IN SERVICE; OR

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD04961-05-5

              

S. 2905                             2

  (III) THE PURCHASE OF POWER UNDER A WRITTEN AGREEMENT  THAT  SPANS  AT
LEAST  TEN YEARS WHEREUNDER THE POWER PURCHASED IS GENERATED BY GEOTHER-
MAL 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) USED BY THE TAXPAYER AS HIS OR HER PRIN-
CIPAL RESIDENCE AT THE TIME THE GEOTHERMAL 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 GEOTHERMAL ENERGY SYSTEM EQUIPMENT.
  (C)  SUCH QUALIFIED EXPENDITURES FOR THE PURCHASE OF GEOTHERMAL ENERGY
SYSTEM EQUIPMENT SHALL NOT INCLUDE INTEREST OR OTHER FINANCE CHARGES.
  (D) SUCH QUALIFIED EXPENDITURES FOR THE  LEASE  OF  GEOTHERMAL  ENERGY
SYSTEM  EQUIPMENT  OR THE PURCHASE OF POWER UNDER AN AGREEMENT DESCRIBED
IN CLAUSE (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  CLAUSE  (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.
  (3) GEOTHERMAL ENERGY SYSTEM EQUIPMENT. THE  TERM  "GEOTHERMAL  ENERGY
SYSTEM EQUIPMENT" SHALL MEAN A SYSTEM WHOSE ORIGINAL USE BEGINS WITH THE
TAXPAYER;  WHICH  MEETS  THE ELIGIBILITY CRITERIA, IF ANY, PRESCRIBED BY
THE DEPARTMENT; AND WHICH IS A GROUND COUPLED SOLAR THERMAL SYSTEM  THAT
UTILIZES  THE  SOLAR THERMAL ENERGY STORED IN THE GROUND OR IN BODIES OF
WATER TO PRODUCE HEAT, AND WHICH IS COMMONLY KNOWN AS OR REFERRED TO  AS
A GROUND SOURCE HEAT PUMP SYSTEM.
  (4)  MULTIPLE  TAXPAYERS.  WHERE GEOTHERMAL ENERGY SYSTEM EQUIPMENT IS
PURCHASED AND INSTALLED IN A PRINCIPAL RESIDENCE SHARED BY TWO  OR  MORE
TAXPAYERS,  THE AMOUNT OF THE CREDIT ALLOWABLE UNDER THIS SUBSECTION FOR
EACH SUCH TAXPAYER SHALL BE PRORATED ACCORDING TO THE PERCENTAGE OF  THE
TOTAL  EXPENDITURE  FOR SUCH GEOTHERMAL ENERGY SYSTEM EQUIPMENT CONTRIB-
UTED BY EACH TAXPAYER.
  (5) PROPORTIONATE SHARE. WHERE GEOTHERMAL ENERGY SYSTEM  EQUIPMENT  IS
PURCHASED  AND  INSTALLED  BY  A CONDOMINIUM MANAGEMENT ASSOCIATION OR A
COOPERATIVE HOUSING CORPORATION, A TAXPAYER  WHO  IS  A  MEMBER  OF  THE
CONDOMINIUM MANAGEMENT ASSOCIATION OR WHO IS A TENANT-STOCKHOLDER IN THE
COOPERATIVE  HOUSING  CORPORATION MAY FOR THE PURPOSE OF THIS SUBSECTION
CLAIM A PROPORTIONATE SHARE OF THE TOTAL EXPENSE AS THE EXPENDITURE  FOR
THE PURPOSES OF THE CREDIT ATTRIBUTABLE TO HIS PRINCIPAL RESIDENCE.
  (6)  GRANTS. FOR PURPOSES OF DETERMINING THE AMOUNT OF THE EXPENDITURE
INCURRED IN PURCHASING AND INSTALLING GEOTHERMAL  ENERGY  SYSTEM  EQUIP-
MENT,  THE  AMOUNT  OF ANY FEDERAL, STATE OR LOCAL GRANT RECEIVED BY THE
TAXPAYER, WHICH WAS USED FOR THE PURCHASE AND/OR  INSTALLATION  OF  SUCH
EQUIPMENT  AND WHICH WAS NOT INCLUDED IN THE FEDERAL GROSS INCOME OF THE
TAXPAYER, SHALL NOT BE INCLUDED IN THE AMOUNT OF SUCH EXPENDITURES.
  (7) WHEN CREDIT ALLOWED. THE  CREDIT  PROVIDED  FOR  HEREIN  SHALL  BE
ALLOWED  WITH RESPECT TO THE TAXABLE YEAR, COMMENCING AFTER TWO THOUSAND

S. 2905                             3

FIFTEEN, IN WHICH THE GEOTHERMAL ENERGY SYSTEM EQUIPMENT  IS  PLACED  IN
SERVICE.
  (8)  CARRYOVER  OF CREDIT. IF THE AMOUNT OF THE CREDIT, AND CARRYOVERS
OF SUCH CREDIT, ALLOWABLE UNDER THIS SUBSECTION  FOR  ANY  TAXABLE  YEAR
SHALL EXCEED THE TAXPAYER'S TAX FOR SUCH YEAR, SUCH EXCESS AMOUNT MAY BE
CARRIED  OVER  TO THE FIVE TAXABLE YEARS NEXT FOLLOWING THE TAXABLE YEAR
WITH RESPECT TO WHICH THE CREDIT IS ALLOWED AND MAY BE DEDUCTED FROM THE
TAXPAYER'S TAX FOR SUCH YEAR OR YEARS.
  S 2. This act shall take effect immediately and shall apply to taxable
years commencing on and after January 1, 2015.