A00034 Summary:

BILL NO    A00034B

SAME AS    SAME AS S00149-B

SPONSOR    Cahill

COSPNSR    Rivera P, Abinanti, Lupardo, Lopez P

MLTSPNSR   

Amd S606, Tax L

Relates to tax credits provided for solar energy system equipment; provides
credit for the lease of solar energy equipment and the purchase of power
generated by solar equipment.
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A00034 Memo:

NEW YORK STATE ASSEMBLY
MEMORANDUM IN SUPPORT OF LEGISLATION
submitted in accordance with Assembly Rule III, Sec 1(f)
 
BILL NUMBER: A34B
 
SPONSOR: Cahill
  TITLE OF BILL: An act to amend the tax law, in relation to tax cred- its provided for solar energy system equipment   PURPOSE: The purpose of this legislation is to encourage homeowners to install and utilize solar energy equipment by allowing individuals who lease such equipment or purchase power under a written agreement with a third party to benefit from a solar equipment tax credit.   SUMMARY OF PROVISIONS: Section 1. Allows a taxpayer to qualify for a solar equipment tax credit in cases where the lease of solar equipment under a written agreement spans at least ten years or a power purchase agreement of at least ten years from a third party is in force. Addi- tionally this section includes and clarifies expenditures for the lease of solar energy system equipment.   JUSTIFICATION: As we continue to move toward a greener economy it is very important that residents be encouraged to utilize renewable forms of energy. This should be true whether the taxpayer can afford to purchase and install renewable generation such as solar equipment or if it is more feasible for the individual to lease the equipment or contract with a provider to purchase power. Using the tax code to incen- tivize the installation of solar equipment is the right way to encourage the development of the renewable energy industry. In addition to the obvious benefits to the taxpayer, the use of more photovoltaic generation equipment will also benefit our environment by reducing the negative effects of greenhouse gas emissions as well and increasing our ability to become more energy independent.   LEGISLATIVE HISTORY: S.8025 of 2009-2010; Referred to Investigations & Government Operations.   FISCAL IMPLICATIONS: Given the nature of how the credit will be taken and the fact that the leases and power purchase agreements that are effected all last more than ten years, it is estimated that this provision will have a fiscal impact of less than $1,000,000 annually.   EFFECTIVE DATE: This act shall take effect immediately.
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A00034 Text:



 
                STATE OF NEW YORK
        ________________________________________________________________________
 
                                          34--B
 
                               2011-2012 Regular Sessions
 
                   IN ASSEMBLY
 
                                       (Prefiled)
 
                                     January 5, 2011
                                       ___________
 
        Introduced by M. of A. CAHILL -- read once and referred to the Committee
          on  Ways  and  Means  --  committee  discharged, bill amended, ordered
          reprinted as amended  and  recommitted  to  said  committee  --  again
          reported  from  said  committee  with amendments, ordered reprinted as

          amended and recommitted to said committee
 
        AN ACT to amend the tax law, in relation to  tax  credits  provided  for
          solar energy system equipment
 
          The  People of the State of New York, represented in Senate and Assem-
        bly, do enact as follows:
 
     1    Section 1. Paragraphs 1 and 2 of subsection (g-1) of  section  606  of
     2  the  tax law, as amended by chapter 378 of the laws of 2005 and subpara-
     3  graph (B) of paragraph 2 as amended by chapter 251 of the laws of  2006,
     4  is amended to read as follows:
     5    (1)  General. An individual taxpayer shall be allowed a credit against
     6  the tax imposed by this article equal to twenty-five percent  of  quali-
     7  fied  solar  energy system equipment expenditures, except as provided in
     8  subparagraph (D) of paragraph two of this subsection.  This credit shall

     9  not exceed three thousand seven  hundred  fifty  dollars  for  qualified
    10  solar  energy  equipment  placed  in service before September first, two
    11  thousand six, and five  thousand  dollars  for  qualified  solar  energy
    12  equipment  placed  in  service on or after September first, two thousand
    13  six.
    14    (2) Qualified solar energy system equipment expenditures. (A) The term
    15  "qualified solar energy system equipment  expenditures"  means  expendi-
    16  tures for:
    17    (i)  the  purchase of solar energy system equipment which is installed
    18  in connection with residential property which is [(i)]  (I)  located  in
    19  this  state  and [(ii)] (II) which is used by the taxpayer as his or her
    20  principal residence at the time the solar  energy  system  equipment  is
    21  placed in service;
 

         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD00898-04-1

        A. 34--B                            2
 
     1    (ii) the lease of solar energy system equipment under a written agree-
     2  ment  that  spans  at  least  ten  years where such equipment owned by a
     3  person other than the taxpayer is installed in connection with  residen-
     4  tial  property which is (I) located in this state and (II) which is used
     5  by  the taxpayer as his or her principal residence at the time the solar
     6  energy system equipment is placed in service; or
     7    (iii) the purchase of power under a written agreement  that  spans  at

     8  least  ten  years  whereunder  the power purchased is generated by solar
     9  energy system equipment owned by a person other than the taxpayer  which
    10  is  installed  in  connection  with  residential  property  which is (I)
    11  located in this state and (II) which is used by the taxpayer as  his  or
    12  her principal residence at the time the solar energy system equipment is
    13  placed in service.
    14    (B) Such qualified expenditures shall include expenditures for materi-
    15  als, labor costs properly allocable to on-site preparation, assembly and
    16  original  installation,  architectural  and  engineering  services,  and
    17  designs and plans directly related to the construction  or  installation
    18  of the solar energy system equipment.
    19    (C)  Such  qualified  expenditures  for  the  purchase of solar energy

    20  system equipment shall not include interest or other finance charges.
    21    (D) Such qualified expenditures for the lease of solar  energy  system
    22  equipment  or  the  purchase  of  power  under an agreement described in
    23  clauses (ii) or (iii)  of  subparagraph  (A)  of  this  paragraph  shall
    24  include  an  amount  equal  to all payments made during the taxable year
    25  under such agreement. Provided, however,  such  credits  shall  only  be
    26  allowed  for  fourteen  years after the first taxable year in which such
    27  credit is allowed.  Provided further, however, the  twenty-five  percent
    28  limitation  in  paragraph one of this subsection shall only apply to the
    29  total aggregate amount of all payments to be made pursuant to an  agree-

    30  ment  referenced  in  clauses  (ii) or (iii) of subparagraph (A) of this
    31  paragraph, and shall not apply to  individual  payments  made  during  a
    32  taxable  year  under such agreement except to the extent such limitation
    33  on an aggregate basis has been reached.
    34    § 2. This act shall take effect immediately.
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