S T A T E O F N E W Y O R K
________________________________________________________________________
2877
2009-2010 Regular Sessions
I N S E N A T E
March 5, 2009
___________
Introduced by Sen. BONACIC -- 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 fuel
cell 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 FUEL CELL MANUFACTURER FACILITIES AND OPER-
ATIONS CREDIT. (A) A TAXPAYER THAT IS PRINCIPALLY ENGAGED IN THE MANU-
FACTURING OF SOLAR ENERGY EQUIPMENT AND/OR FUEL CELLS, AND THAT MEETS
THE ELIGIBILITY REQUIREMENTS IN PARAGRAPH (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 PARA-
GRAPHS (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 MANUFACTURING OF MATERIAL COMPO-
NENTS IN NEW YORK STATE DESIGNED TO PRODUCE ELECTRICITY UTILIZING SOLAR
RADIATION AS THE ENERGY SOURCE FOR SUCH ELECTRICITY. FUEL CELL EQUIPMENT
SHALL MEAN THE MANUFACTURING IN NEW YORK STATE OF ON-SITE ELECTRICITY
GENERATION SYSTEMS UTILIZING PROTON EXCHANGE MEMBRANE FUEL CELLS OR
MOLTEN CARBONATE FUEL CELL TECHNOLOGIES. FUEL CELL MEANS A DEVICE THAT
PRODUCES ELECTRICITY DIRECTLY FROM HYDROGEN OR HYDROCARBON FUEL THROUGH
A NON-COMBUSTIVE ELECTROCHEMICAL PROCESS. THE DETERMINATION OF WHETHER
SOLAR ENERGY EQUIPMENT OR FUEL CELL EQUIPMENT QUALIFY 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 ENER-
GY RESEARCH AND DEVELOPMENT AUTHORITY.
(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
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD09951-01-9
S. 2877 2
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-
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 ONE THOUSAND EIGHTY-SIX OF THIS CHAPTER.
PROVIDED, HOWEVER, THE PROVISIONS OF SUBSECTION (C) OF SECTION ONE THOU-
S. 2877 3
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
(qq) to read as follows:
(QQ) QUALIFIED SOLAR AND FUEL CELL MANUFACTURER FACILITIES AND OPER-
ATIONS 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 ENERGY EQUIPMENT AND/OR FUEL, 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 MANUFACTURING OF MATERIAL COMPONENTS IN NEW YORK STATE
DESIGNED TO PRODUCE ELECTRICITY UTILIZING SOLAR RADIATION AS THE ENERGY
SOURCE FOR SUCH ELECTRICITY. FUEL CELL EQUIPMENT SHALL MEAN THE MANU-
FACTURING IN NEW YORK STATE OF ON-SITE ELECTRICITY GENERATION SYSTEMS
UTILIZING PROTON EXCHANGE MEMBRANE FUEL CELLS OR MOLTEN CARBONATE FUEL
CELL TECHNOLOGIES. FUEL CELL MEANS A DEVICE THAT PRODUCES ELECTRICITY
DIRECTLY FROM HYDROGEN OR HYDROCARBON FUEL THROUGH A NON-COMBUSTIVE
ELECTROCHEMICAL PROCESS. THE DETERMINATION OF WHETHER SOLAR ENERGY
EQUIPMENT OR FUEL CELL EQUIPMENT QUALIFY 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 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 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
S. 2877 4
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 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, as amended by section 2 of part ZZ-1 of chapter 57 of
the laws of 2008, is amended to read as follows:
(B) shall be treated as the owner of a new business with respect to
such share if the corporation qualifies as a new business pursuant to
paragraph (j) of subdivision twelve of section two hundred ten of this
chapter.
The corporation's credit base under
section two hundred ten or section
With respect to the following fourteen hundred fifty-six of this
credit under this section: chapter is:
Investment tax credit Investment credit base
under subsection (a) or qualified
rehabilitation
expenditures under
subdivision twelve of
section two hundred ten
Empire zone Cost or other basis
investment tax credit under subdivision
under subsection (j) twelve-B
of section two hundred
ten
Empire zone Eligible wages under
wage tax credit subdivision nineteen of
under subsection (k) section two hundred ten
or subsection (e) of
section fourteen hundred
S. 2877 5
fifty-six
Empire zone Qualified investments
capital tax credit and contributions under
under subsection (l) subdivision twenty of
section two hundred ten
or subsection (d) of
section fourteen hundred
fifty-six
Agricultural property tax Allowable school
credit under subsection (n) district property taxes under
subdivision twenty-two of
section two hundred ten
Credit for employment Qualified first-year wages or
of persons with dis- qualified second-year wages
abilities under under subdivision
subsection (o) twenty-three of section
two hundred ten
or subsection (f)
of section fourteen
hundred fifty-six
Employment incentive Applicable investment credit
credit under subsec- base under subdivision
tion (a-1) twelve-D of section two
hundred ten
Empire zone Applicable investment
employment credit under sub-
incentive credit under division twelve-C
subsection (j-1) of section two hundred ten
Alternative fuels credit Cost under subdivision
under subsection (p) twenty-four of section two
hundred ten
Qualified emerging Applicable credit base
technology company under subdivision twelve-E
employment credit of section two hundred ten
under subsection (q)
Qualified emerging Qualified investments under
technology company subdivision twelve-F of
capital tax credit section two hundred ten
under subsection (r)
Credit for purchase of an Cost of an automated
automated external defibrillator external defibrillator under
under subsection (s) subdivision twenty-five of
section two hundred ten
or subsection (j) of section
fourteen hundred fifty-six
S. 2877 6
Low-income housing Credit amount under
credit under subsection (x) subdivision thirty
of section two hundred ten or
subsection (l) of section
fourteen hundred fifty-six
Credit for transportation Amount of credit under sub-
improvement contributions division thirty-two of section
under subsection (z) two hundred ten or subsection
(n) of section fourteen
hundred fifty-six
QEZE credit for real property Amount of credit under
taxes under subsection (bb) subdivision twenty-seven of
section two hundred ten or
subsection (o) of section
fourteen hundred fifty-six
QEZE tax reduction credit Amount of benefit period
under subsection (cc) factor, employment increase factor
and zone allocation
factor (without regard
to pro ration) under
subdivision twenty-eight of
section two hundred ten or
subsection (p) of section
fourteen hundred fifty-six
and amount of tax factor
as determined under
subdivision (f) of section sixteen
Green building credit Amount of green building credit
under subsection (y) under subdivision thirty-one
of section two hundred ten
or subsection (m) of section
fourteen hundred fifty-six
Credit for long-term Qualified costs under
care insurance premiums subdivision twenty-five-a of
under subsection (aa) section two hundred ten
or subsection (k) of section
fourteen hundred fifty-six
Brownfield redevelopment Amount of credit
credit under subsection under subdivision
(dd) thirty-three of section
two hundred ten
or subsection (q) of
section fourteen hundred
fifty-six
Remediated brownfield Amount of credit under
credit for real property subdivision thirty-four
taxes for qualified of section two hundred
sites under subsection ten or subsection (r) of
(ee) section fourteen hundred
S. 2877 7
fifty-six
Environmental Amount of credit under
remediation subdivision thirty-five of
insurance credit under section two hundred
subsection (ff) ten or subsection
(s) of section
fourteen hundred
fifty-six
Empire state film production Amount of credit for qualified
credit under subsection (gg) production costs in production
of a qualified film under
subdivision thirty-six of
section two hundred ten
Qualified emerging Qualifying expenditures and
technology company facilities, development activities under
operations and training credit subdivision twelve-G of section
under subsection (nn) two hundred ten
Security training tax Amount of credit
credit under under subdivision thirty-seven
subsection (ii) of section two hundred ten or
under subsection (t) of
section fourteen hundred fifty-six
Credit for qualified fuel Amount of credit under
cell electric generating equipment subdivision thirty-seven
expenditures under subsection (g-2) of section two hundred ten
or subsection (t) of
section fourteen hundred
fifty-six
Empire state commercial production Amount of credit for qualified
credit under subsection (jj) production costs in production
of a qualified commercial under
subdivision thirty-eight of sec-
tion two hundred ten
Biofuel production Amount of credit
tax credit under under subdivision
subsection (jj) thirty-eight of
section two hundred ten
Clean heating fuel credit Amount of credit under
under subsection (mm) subdivision thirty-nine of
section two hundred ten
Credit for rehabilitation Amount of credit under
of historic properties subdivision forty of
under subsection (oo) [subsection] SECTION two
hundred ten
Credit for companies who Amount of credit under
provide transportation subdivision forty of
S. 2877 8
to individuals section two hundred ten
with disabilities
under subsection (oo)
CREDIT FOR QUALIFIED AMOUNT OF CREDIT UNDER
SOLAR AND FUEL CELL SUBDIVISION TWELVE-H OF
MANUFACTURER FACILITIES SECTION TWO HUNDRED TEN
AND OPERATIONS CREDIT
UNDER SUBSECTION (QQ)
S 4. This act shall take effect immediately and shall apply to taxable
years commencing on or after January 1, 2010; provided, however that the
empire state film production credit under subsection (gg), the empire
state commercial production credit under subsection (jj) and the credit
for companies who provide transportation to individuals with disabili-
ties under subsection (oo) of section 606 of the tax law contained in
section three of this act shall expire on the same date as provided in
section 9 of part P of chapter 60 of the laws of 2004, as amended,
section 10 of part V of chapter 62 of the laws of 2006, as amended, and
section 5 of chapter 522 of the laws of 2006, as amended, respectively.
