S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   3864
 
                        2021-2022 Regular Sessions
 
                             I N  S E N A T E
 
                             February 1, 2021
                                ___________
 
 Introduced  by  Sen. KENNEDY -- 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 TWENTY-ONE.
   (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.
                                                            LBD06935-01-1
              

 S. 3864                             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. 3864                             3
 
 TWENTY-TWO, 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.
   § 2. This act shall take effect immediately and shall apply to taxable
 years commencing on and after January 1, 2022.