Establishes the qualified solar manufacturer facilities and operations credit for businesses which manufacture solar energy equipment.

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S5141-2011 Actions

• Feb 17, 2012: PRINT NUMBER 5141A
• Feb 17, 2012: AMEND (T) AND RECOMMIT TO INVESTIGATIONS AND GOVERNMENT OPERATIONS
• Jan 4, 2012: REFERRED TO INVESTIGATIONS AND GOVERNMENT OPERATIONS
• Jun 7, 2011: REPORTED AND COMMITTED TO FINANCE
• May 3, 2011: REFERRED TO INVESTIGATIONS AND GOVERNMENT OPERATIONS

S5141-2011 Meetings

Investigations and Government Operations: Jun 7, 2011

S5141-2011 Votes

S5141-2011 Memo

BILL NUMBER:S5141

TITLE OF BILL:
An act
to amend the tax law, in relation to the qualified solar
manufacturer facilities and operations credit

PURPOSE:
To provide a tax credit to encourage alternative energy developers to
invest in alternative energy development in New York State.

SUMMARY OF PROVISIONS:
The legislation creates a 25% capital investment refundable tax credit
and 10% marketing tax credit for solar development.

EXISTING LAW:
Does not provide a tax credit for this service.

JUSTIFICATION:
New York State has seen a significant lag in the solar energy
development sector when compared to other states. At least a part of
the problem has been that there is no clear incentive for businesses
to make capital investments in solar component production or to
market the sale of solar equipment. This is both a necessary and
prudent step because it will help the state to meet its goals for
renewable energy, and just as importantly it will help to create
solar manufacturing and marketing jobs in New York State, rather than
see them created in another state or even worse, another country.

LEGISLATIVE HISTORY:
S.8511 of 2008 - Passed Senate

FISCAL IMPLICATIONS:
To be determined.

LOCAL FISCAL IMPLICATIONS:
None.

EFFECTIVE DATE:
Immediately and apply to fiscal years commencing 1/1/2013.

S5141-2011 Text

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

                                    5141

                         2011-2012 Regular Sessions

                              I N  SENATE

                                 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

  AN ACT to amend the tax law, in relation to the qualified solar manufac-
    turer 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 MANUFACTURER FACILITIES AND OPERATIONS  CREDIT.
  (A) A TAXPAYER THAT IS PRINCIPALLY ENGAGED IN THE MANUFACTURING OF SOLAR
  ENERGY  EQUIPMENT  AND  THAT MEETS THE ELIGIBILITY REQUIREMENTS IN PARA-
  GRAPH (B) OF THIS SUBDIVISION, SHALL BE ALLOWED A CREDIT AGAINST THE TAX
  IMPOSED BY THIS ARTICLE. THE AMOUNT OF CREDIT SHALL BE EQUAL TO THE  SUM
  OF  THE  AMOUNTS SPECIFIED IN PARAGRAPHS (C) AND (D) OF THIS SUBDIVISION
  SUBJECT TO THE LIMITATIONS IN PARAGRAPH (E) OF THIS SUBDIVISION. FOR THE
  PURPOSES OF THIS SUBDIVISION 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.  THE DETERMINATION OF WHETHER SOLAR ENERGY EQUIPMENT QUALI-
  FIES FOR ELIGIBLE COSTS UNDER THIS SUBDIVISION SHALL  BE  DETERMINED  BY
  THE COMMISSIONER AND, IF REQUESTED BY THE COMMISSIONER, THE PRESIDENT OF
  THE NEW YORK STATE ENERGY RESEARCH AND DEVELOPMENT AUTHORITY.
    (B)  AN  ELIGIBLE  TAXPAYER  SHALL (I) HAVE MORE THAN TWENTY 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  COST  OR OTHER BASIS FOR FEDERAL INCOME TAX PURPOSES OF
  RESEARCH AND DEVELOPMENT AND MANUFACTURING PROPERTY AS DEFINED IN  PARA-

   EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                        [ ] is old law to be omitted.
                                                             LBD11378-01-1

 S. 5141                             2

  GRAPH  (B) OF SUBDIVISION TWELVE OF THIS SECTION THAT IS ACQUIRED BY THE
  TAXPAYER 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  OTHER  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 QUALIFIED MANUFACTURING ACTIV-
  ITIES 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 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.
    (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
  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
  (tt) to read as follows:

    (TT) QUALIFIED SOLAR MANUFACTURER FACILITIES  AND  OPERATIONS  CREDIT.
  (1)  A  TAXPAYER  WHO IS A MEMBER OF AN ENTITY CONSISTING OF ONE OR MORE
  TAXPAYERS THAT IS PRINCIPALLY ENGAGED  IN  THE  MANUFACTURING  OF  SOLAR

 S. 5141                             3

  ENERGY  EQUIPMENT  AND  THAT MEETS THE ELIGIBILITY REQUIREMENTS IN PARA-
  GRAPH 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.  THE DETERMINATION OF WHETHER SOLAR ENERGY EQUIPMENT QUALI-
  FIES FOR ELIGIBLE COSTS UNDER THIS SUBSECTION SHALL BE DETERMINED BY THE
  COMMISSIONER, 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 TWENTY 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  OTHER  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  OTHER  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.
    (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

 S. 5141                             4

  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 FIFTEEN MILLION DOLLARS PER YEAR.
    (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 (xxxiii) to read as
  follows:

    (XXXIII) CREDIT FOR                AMOUNT OF CREDIT UNDER
  QUALIFIED SOLAR                      SUBDIVISION TWELVE-H OF
  MANUFACTURER FACILITIES              SECTION TWO HUNDRED TEN
  AND OPERATIONS CREDIT
  UNDER SUBSECTION (TT)
    S 4. This act shall take effect immediately and shall apply to taxable
  years commencing on or after January 1, 2013.