N.Y. Tax Law § 19: Green building credit

§ 19. Green building credit. (a) Allowance of credit. (1) General.

(A) Green building credit. A taxpayer subject to tax under article nine,

nine-A, twenty-two or thirty-three of this chapter shall be allowed a

green building credit against such tax, pursuant to the provisions

referenced in subdivision (f) of this section. Provided, however, no

credit shall be allowed under this section unless the taxpayer has

complied with the applicable requirements of paragraph two of

subdivision (d) of this section (relating to reports to DEC). The amount

of the credit shall be the sum of the credit components specified in

paragraphs two through seven of this subdivision. Provided, however, the

amount of each such credit component shall not exceed the limit set

forth in the initial credit component certificate obtained pursuant to

subdivision (c) of this section. In the determination of such credit

components, no cost paid or incurred by the taxpayer shall be the basis

for more than one such component.

(B) Credit to successor owner. If a credit is allowed to a building

owner pursuant to this subdivision with respect to property, and such

property (or an interest therein) is sold, the credit for the period

after the sale which would have been allowable under this subdivision to

the prior owner had the property not been sold shall be allowable to the

new owner. Credit for the year of sale shall be allocated between the

parties on the basis of the number of days during such year that the

property or interest was held by each.

(C) Credit to successor tenant. If a credit is allowed to a tenant

pursuant to this subdivision with respect to property, and if such

tenancy is terminated but such property remains in use in the building

by a successor tenant, the credit for the period after such termination

which would have been allowable under this subdivision to the prior

tenant had the tenancy not been terminated shall be allowable to the

successor tenant. Credit for the year of termination shall be allocated

between the parties on the basis of the number of days during such year

that the property was used by each.

(D) Notwithstanding any other provision of law to the contrary, in the

case of allowance of credit under this section to a successor owner or

tenant, as provided in subparagraph (B) or (C) of this paragraph, the

commissioner shall have the authority to reveal to the successor owner

or tenant any information, with respect to the credit of the prior owner

or tenant, which is the basis for the denial in whole or in part of the

credit claimed by such successor owner or tenant.

(2) Green whole-building credit component. The green whole-building

credit component shall be equal to the applicable percentage of the

allowable costs paid or incurred by the taxpayer (whether owner or

tenant), for either the construction of a green building or the

rehabilitation of a building which is not a green building to be a green

building. Provided, however, the credit component shall not exceed the

maximum amount specified in the initial credit component certificate.

The applicable percentage shall be 1.4 percent, except that if the

building is located in an economic development area, the applicable

percentage shall be 1.6 percent. The credit component amount so

determined shall be allowed for the credit allowance year, but only if

(A) the taxpayer has obtained and filed both an initial credit component

certificate and an eligibility certificate issued pursuant to

subdivision (c) of this section, (B) a certificate of occupancy for the

building has been issued and (C) where the credit allowance year is a

year described in subparagraph (B) of paragraph two-a of subdivision (b)

of this section, the green building or rehabilitation remains in service

during such year. Such credit component amount shall be allowed also for

each of the next four succeeding taxable years with respect to which the

taxpayer has obtained and filed an eligibility certificate pursuant to

subdivision (c) of this section. Provided, further, the allowable costs

may not exceed, in the aggregate, one hundred fifty dollars per square

foot with respect to the portion of the building which comprises the

base building and seventy-five dollars per square foot with respect to

the portion of the building which comprises the tenant space.

(3) Green base building credit component. The green base building

credit component shall be equal to the applicable percentage of the

allowable costs paid or incurred by the taxpayer, if the owner, for

either the construction of a green base building or for the

rehabilitation of a base building which is not a green base building to

be a green base building. Provided, however, the credit component shall

not exceed the maximum amount specified in the initial credit component

certificate. The applicable percentage shall be one percent, except

that if the building is located in an economic development area, the

applicable percentage shall be 1.2 percent. The credit component amount

so determined shall be allowed for the credit allowance year, but only

if (A) the taxpayer has obtained and filed both an initial credit

component certificate and an eligibility certificate issued pursuant to

subdivision (c) of this section, (B) a certificate of occupancy for the

building has been issued and (C) where the credit allowance year is a

year described in subparagraph (B) of paragraph two-a of subdivision (b)

of this section, the green base building or rehabilitation of a base

building remains in service during such year. Such credit component

amount shall be allowed also for each of the next four succeeding

taxable years with respect to which the taxpayer has obtained and filed

an eligibility certificate pursuant to subdivision (c) of this section.

Provided, further, the allowable costs for the base building may not

exceed, in the aggregate, one hundred fifty dollars per square foot.

(4) Green tenant space credit component. The green tenant space credit

component shall be equal to the applicable percentage of allowable costs

for tenant improvements paid or incurred by the taxpayer (whether owner

or tenant) in constructing (including completing) tenant space, or

rehabilitating tenant space which is not green tenant space to be green

tenant space. Provided, however, the credit component shall not exceed

the maximum amount specified in the initial credit component

certificate. The applicable percentage shall be one percent, except that

if the building is located in an economic development area the

applicable percentage shall be 1.2 percent. Provided, however, that the

owner, or a tenant who occupies fewer than ten thousand square feet,

shall qualify for such green tenant space credit component only in the

event that the base building is a green base building. The credit

component amount so determined shall be allowed for the credit allowance

year, but only if (A) the taxpayer has obtained and filed an initial

credit component certificate and an eligibility certificate issued

pursuant to subdivision (c) of this section and (B) where the credit

allowance year is a year described in subparagraph (B) of paragraph

two-a of subdivision (b) of this section, the construction, completion

or rehabilitation remains in service during such year. Such credit

component amount shall be allowed also for each of the next four

succeeding taxable years with respect to which the taxpayer has obtained

and filed an eligibility certificate pursuant to subdivision (c) of this

section. Provided, however, the allowable costs for tenant space shall

not exceed, in the aggregate, seventy-five dollars per square foot. In

the event that both an owner and tenant incur such costs for tenant

space with respect to the same tenant space and such costs in the

aggregate exceed seventy-five dollars per square foot, the owner shall

have priority as to costs constituting the basis for the green tenant

space credit component.

(5) Fuel cell credit component. A fuel cell credit component shall be

allowed for the installation of a fuel cell which is a qualifying

alternate energy source, installed to serve a green building, green base

building or green tenant space. The amount of the credit component shall

be six percent of the sum of the capitalized costs paid or incurred by

the taxpayer with respect to each fuel cell installed to serve such

building or space, including the cost of the foundation or platform and

the labor cost associated with installation, such capitalized costs not

to exceed one thousand dollars per kilowatt of installed DC rated

capacity. Provided, however, the credit component shall not exceed the

maximum amount specified in the initial credit component certificate.

The fuel cell credit component amount so determined shall be allowed for

the credit allowance year, but only if (A) the taxpayer has obtained and

filed an initial credit component certificate and an eligibility

certificate issued pursuant to subdivision (c) of this section and (B)

where the credit allowance year is a year described in subparagraph (B)

of paragraph two-a of subdivision (b) of this section, the fuel cell

remains in service during such year. Such credit component amount shall

be allowed also with respect to each of the four taxable years next

following during which the fuel cell remains in service. Provided,

however, that the amount of any federal, state or local grant received

by the taxpayer and used for the purchase and/or installation of such

fuel cell and which was not included in the federal gross income of the

taxpayer shall be subtracted from the amount of such cost.

(6) Photovoltaic module credit component. A photovoltaic module credit

component shall be allowed for the installation of photovoltaic modules

which constitute a qualifying alternate energy source installed to serve

a green building, green base building or green tenant space. The amount

of the credit component shall be twenty percent of the incremental cost

paid or incurred by the taxpayer for building-integrated photovoltaic

modules and five percent of the cost of non-building-integrated

photovoltaic modules, in either case such cost not to exceed the product

of (i) three dollars and (ii) the number of watts included in the DC

rated capacity of the photovoltaic modules. Provided, however, the

credit component shall not exceed the maximum amount specified in the

initial credit component certificate. The credit component amount so

determined shall be allowed for the credit allowance year, but only if

(A) the taxpayer has obtained and filed an initial credit component

certificate and an eligibility certificate issued pursuant to

subdivision (c) of this section and (B) where the credit allowance year

is a year described in subparagraph (B) of paragraph two-a of

subdivision (b) of this section, the modules remain in service during

such year. Such credit amount shall be allowed also for the four taxable

years next following during which the modules remain in service.

Provided, however, that the amount of any federal, state or local grant

received by the taxpayer and used for the purchase and/or installation

of such photovoltaic equipment and which was not included in the federal

gross income of the taxpayer shall be subtracted from the amount of such

cost.

(7) Green refrigerant component. A green refrigerant component shall

be allowed for new air conditioning equipment (including chillers and

absorption chillers, water or air cooled unitary equipment, water-cooled

heat pumps, packaged terminal heat pumps, air conditioners, and other

similar air conditioning equipment) that uses an EPA-approved non-ozone

depleting refrigerant installed to serve a green building, green base

building or green tenant space. The amount of the credit component shall

be two percent of the cost of such air conditioning equipment. The

commissioner of environmental conservation, in consultation with

NYSERDA, shall promulgate regulations concerning the eligibility of

other EPA-approved refrigerants to receive a credit pursuant to this

paragraph. Provided, however, the credit component shall not exceed the

maximum amount specified in the initial credit component certificate.

The green refrigerant component amount so determined shall be allowed

for the credit allowance year, but only if (A) the taxpayer has obtained

and filed an initial credit component certificate and an eligibility

certificate issued pursuant to subdivision (c) of this section, and (B)

where the credit allowance year is a year described in subparagraph (B)

of paragraph two-a of subdivision (b) of this section, the air

conditioning equipment remains in service. Such credit component amount

shall be allowed also with respect to each of the four taxable years

next following during which the air conditioning equipment remains in

service.

(b) Definitions. As used in this section, the following terms shall

have the following meanings:

(1) "Allowable costs" means amounts properly chargeable to capital

account (other than for land), which are paid or incurred on or after

June first, nineteen hundred ninety-nine, for: construction or

rehabilitation; commissioning costs; interest paid or incurred during

the construction or rehabilitation period; legal, architectural,

engineering and other professional fees allocable to construction or

rehabilitation; closing costs for construction, rehabilitation or

mortgage loans; recording taxes and filing fees incurred with respect to

construction or rehabilitation; site costs (such as temporary electric

wiring, scaffolding, demolition costs, and fencing and security

facilities); and costs of furniture, carpeting, partitions, walls and

wall coverings, ceilings, drapes, blinds, lighting, plumbing, electrical

wiring and ventilation; provided that such costs shall not include the

cost of telephone systems and computers (other than electrical wiring

costs) and shall not include the cost of fuel cells or photovoltaic

modules (including installation) or the cost of new air conditioning

equipment using an EPA-approved non-ozone depleting refrigerant or other

EPA-approved refrigerant approved by the commissioner of environmental

conservation (excluding installation).

(2) "Base building" means all areas of a building not intended for

occupancy by a tenant or owner, including but not limited to the

structural components of the building, exterior walls, floors, windows,

roofs, foundations, chimneys and stacks, parking areas, mechanical rooms

and mechanical systems, and owner-controlled and/or operated service

spaces, sidewalks, main lobby, shafts and vertical transportation

mechanisms, stairways and corridors.

(2-a) "Credit allowance year" means the later of (A) the taxable year

during which the property, construction, completion or rehabilitation

referred to in paragraphs two through seven of subdivision (a) of this

section has been placed in service or has received a final certificate

of occupancy or (B) the first taxable year with respect to which the

credit may be claimed pursuant to the initial credit component

certificate issued pursuant to subdivision (c) of this section.

(3) "Commissioning" means the testing and fine-tuning of heat,

ventilating and air conditioning and other systems to assure proper

functioning and adherence to design criteria and the preparation of

system operation manuals and instruction of maintenance personnel.

(4) "DEC" means the New York state department of environmental

conservation. "DOH" means the New York state department of health. "EPA"

means the United States environmental protection agency.

(5) "Economic development area" means an area which is designated (A)

an empire zone pursuant to article eighteen-B of the general municipal

law or (B) an empowerment zone or enterprise community pursuant to

section 1391 of the Internal Revenue Code.

(6) "Eligible building" means a building located in this state which

is:

(A) classified B2, B3, B4, C1, C2, C5, or C6 for purposes of the New

York state uniform fire prevention and building code or similarly

classified under any subsequent code; provided that any such building

contains at least twenty thousand square feet of interior space, or

(B) a residential multi-family building with at least twelve dwelling

units that contain at least twenty thousand square feet of interior

space, or

(C) one or more residential multi-family buildings with at least two

dwelling units that are part of a single or phased construction project

that contains, in the aggregate, at least twenty thousand square feet of

interior space; provided that in any single phase of such project at

least ten thousand square feet of interior space is under construction

or rehabilitation, or

(D) any combination of buildings described in subparagraphs (A), (B)

and (C) of this paragraph, and

(E) is not a building located on freshwater wetlands or tidal wetlands

the construction of which requires a permit under section 24-0701 or

25-0403, respectively, of the environmental conservation law, or on

wetlands such that the construction thereof requires a permit pursuant

to section 404 of the federal clean water act (33 U.S.C. § 1344).

(7) "Energy code" means the New York state energy conservation

construction code.

(8) "Fuel cell" means a device that produces electricity directly from

hydrogen or hydrocarbon fuel through a non-combustive electro-chemical

process.

(9) "Green base building" means a base building which is part of an

eligible building and which meets the following standards:

(A) Energy and energy efficiency. (i) Energy use is no more than

sixty-five percent (in the case of new construction of a base building)

or seventy-five percent (in the case of rehabilitation of a base

building) of the use permitted under the energy code or, in the event

such standard is revised or superseded, energy use shall meet such other

energy efficiency standards that DEC, in consultation with NYSERDA,

shall establish in regulations promulgated pursuant to paragraph one of

subdivision (e) of this section, in effect at the time the base building

or rehabilitation thereof is placed in service.

(ii) All appliances and any heating, cooling and water heating

equipment used in the base building and subject to the regulations

promulgated by DEC, in consultation with NYSERDA, pursuant to paragraph

one of subdivision (e) of this section, shall meet the standards

established by such regulations in effect at the time the base building

or rehabilitation thereof is placed in service.

(B) Zoning, indoor air quality, building materials, finishes and

furnishings. (i) The base building shall comply with all applicable

zoning, land use and erosion control requirements, stormwater management

ordinances, building code requirements and environmental regulations. In

the case of the rehabilitation of an existing building, all existing

environmental hazards shall be identified and managed in accordance with

applicable laws, regulations and industry guidelines.

(ii) Buildings classified B2, B3, B4, C1, C2, C5, or C6, for purposes

of the New York state uniform fire prevention and building code, or

similarly classified under any subsequent code, shall meet the following

indoor air quality requirements:

(I) ventilation and exchange of indoor/outdoor air shall meet the

standards established by regulations promulgated by DEC, in consultation

with DOH and NYSERDA, pursuant to paragraph two of subdivision (e) of

this section;

(II) if smoking is permitted in specific areas of the building,

separate air ventilation and circulation shall be provided for smoking

and non-smoking areas;

(III) the ventilation system shall include an air purging system that

is capable of replacing one hundred percent of the air on any floor, on

a minimum of two floors at a time. The air shall be purged for a period

of one week on every floor immediately prior to initial occupancy and on

any floor that undergoes renovation immediately prior to re-occupancy;

provided that, if a taxpayer obtains certification from a licensed

architect, engineer, certified industrial hygienist, or other licensed

or certified professional whom the commissioner of environmental

conservation shall approve, pursuant to regulations, verifying that

off-gassing and any other contamination can be reduced to comparable

levels in less than one week, the period of purging may be shortened.

The taxpayer shall maintain a copy of such certification in accordance

with the provisions of subdivision (d) of this section.

(C) Building fresh air intake shall be located a minimum of

twenty-five feet away from loading areas, building exhaust fans, cooling

towers and other point sources of contamination.

(D) During construction or rehabilitation, the ventilation system

components and pathways shall be protected from contamination in

accordance with an indoor air quality management plan for the

construction or rehabilitation process that meets the standards

established in regulations promulgated by DEC, in consultation with DOH

and NYSERDA, pursuant to paragraph two of subdivision (e) of this

section. In the event that such areas are not protected from

contamination in accordance with such standards, they shall be cleaned

prior to occupancy.

(E) A licensed engineer, certified industrial hygienist, or other

licensed or certified professional whom the commissioner of

environmental conservation shall approve, pursuant to regulations, shall

conduct indoor air quality testing with respect to the entire building

immediately following occupancy, if any, and on an annual basis, to

monitor supply and return air and ambient air for carbon monoxide,

carbon dioxide, total volatile organic compounds, radon, and particulate

matter. Provided, however, once radon measurements have been found to be

satisfactory, subsequent annual testing is not required. The taxpayer

shall record baseline readings immediately following occupancy, if any,

and annually thereafter. In the event that the taxpayer does not

establish that during a taxable year during which any part of the

building is occupied, indoor air quality met the standards established

in regulations promulgated by DEC, in consultation with DOH and NYSERDA,

pursuant to paragraph two of subdivision (e) of this section, the base

building shall not constitute a green base building.

(F) The mechanical plant of the building shall be commissioned in

accordance with the standards established in regulations promulgated by

DEC, in consultation with NYSERDA, pursuant to subparagraph (D) of

paragraph one of subdivision (e) of this section, which standards shall

be informed by documents such as ASHRAE G-1 and the United States

general services administration "Model Commissioning Plan and Guide

Specifications". For purposes of this subparagraph the term "ASHRAE"

means the American society of heating, refrigerating and air

conditioning engineers.

(G) Separate waste disposal chutes or a carousel compactor system for

recyclable materials shall be provided for the recycling of waste by

occupants, or recycling shall be otherwise facilitated by, at a minimum,

providing a readily accessible designated collection area or areas with

sufficient space to store recyclable materials separately between

collection dates.

(H) All plumbing fixtures in the public areas of the building shall

meet the plumbing fixture requirements of the energy policy act of 1992

or any successor provision in effect at the time the building or

rehabilitation is placed in service.

(I) Prior to initial occupancy and upon request, the owner of the

building shall provide each tenant with (1) written notification of the

opportunity to apply for a tax credit pursuant to this section and (2)

written guidelines regarding opportunities to improve the energy

efficiency and air quality of tenant space and to reduce and recycle

waste streams.

(J) All building materials, finishes and furnishings used in the base

building and subject to the regulations promulgated by DEC, in

consultation with NYSERDA, pursuant to subparagraph (A) of paragraph

three of subdivision (e) of this section, shall meet the standards

established by such regulations in effect at the time the building or

rehabilitation is placed in service; provided further that with respect

to furnishings, this requirement shall apply only to newly purchased

items.

(K) All tenant space in the building occupied by the owner must be

green tenant space.

(10) "Green building" means a building wherein the base building is a

green base building and all tenant space is green tenant space.

(11) "Green tenant space" means tenant space in a building if such

building is an eligible building and if such tenant space complies with

the following requirements:

(A) Energy and energy efficiency. (i) Energy use for tenant space is

no more than sixty-five percent (in the case of new construction) or

seventy-five percent (in the case of rehabilitation) of the use

permitted under the energy code or, in the event such standard is

revised or superseded, energy use shall meet such other energy

efficiency standards that DEC, in consultation with NYSERDA, shall

establish in regulations promulgated pursuant to paragraph one of

subdivision (e) of this section, in effect at the time the improvements

with respect to which a tax credit is claimed are placed in service.

(ii) All appliances and any heating, cooling and water heating

equipment used in the tenant space and subject to the regulations

promulgated by DEC, in consultation with NYSERDA, pursuant to paragraph

one of subdivision (e) of this section shall meet the standards

established by such regulations or, in the event that such standards are

revised, the standards in effect at the time the improvements with

respect to which a tax credit is claimed are placed in service.

(B) Code requirements, indoor air quality, building materials,

finishes and furnishings. (i) The tenant space shall comply with all

applicable building code requirements and environmental regulations and,

with respect to projects other than new construction, all existing

environmental hazards shall be identified and managed in accordance with

applicable laws, regulations and industry guidelines.

(ii) In the case of buildings classified B2, B3, B4, C1, C2, C5, or

C6, for purposes of the New York state uniform fire prevention and

building code, or similarly classified under any subsequent code,

ventilation and exchange of indoor/outdoor air shall meet the standards

established in regulations promulgated by DEC, in consultation with DOH

and NYSERDA, pursuant to paragraph two of subdivision (e) of this

section.

(iii) For buildings in which smoking is permitted, the taxpayer shall

ensure that, if smoking is permitted in the tenant space, it is

permitted only in areas in which the air ventilation and circulation is

separate from that for non-smoking areas.

(iv) During construction or rehabilitation, the ventilation system

components and pathways shall be protected from contamination in

accordance with an indoor air quality management plan for the

construction or rehabilitation process that meets the standards

established in regulations promulgated by DEC, in consultation with DOH

and NYSERDA, pursuant to paragraph two of subdivision (e) of this

section. In the event that such areas are not protected from

contamination in accordance with such standards, they shall be cleaned

prior to occupancy.

(v) A licensed engineer, certified industrial hygienist, or other

licensed or certified professional whom the commissioner of

environmental conservation shall approve, pursuant to regulations, shall

conduct indoor air quality testing with respect to the tenant space

immediately following occupancy, if any, and on an annual basis, to

monitor supply and return air and ambient air for carbon monoxide,

carbon dioxide, total volatile organic compounds, radon, and particulate

matter. Provided, however, once radon measurements have been found to be

satisfactory, subsequent annual testing is not required. The taxpayer

shall record baseline readings immediately following occupancy, if any,

and annually thereafter. In the event that the taxpayer does not

establish that during a taxable year during which the tenant space is

occupied, indoor air quality met the standards established in

regulations promulgated by DEC, in consultation with DOH and NYSERDA,

pursuant to paragraph two of subdivision (e) of this section, the tenant

space shall not constitute green tenant space.

(vi) All plumbing fixtures in the tenant space shall meet the plumbing

fixture requirements of the energy policy act of 1992 or successor

provision in effect at the time the improvements with respect to which a

tax credit is claimed are placed in service.

(vii) All building materials, finishes and furnishings selected for

use in the tenant space and subject to the regulations promulgated by

DEC, in consultation with NYSERDA, pursuant to subparagraph (A) of

paragraph three of subdivision (e) of this section, shall meet the

standards established by such regulations or, in the event that such

standards are revised, the standards in effect at the time the

improvements with respect to which a tax credit is claimed are placed in

service, provided that, with respect to furnishings, this requirement

shall apply only to newly purchased items.

(12) "Incremental cost of building-integrated photovoltaic modules"

means:

(A) the cost of building-integrated photovoltaic modules and any

associated inverter, additional wiring or other electrical equipment or

additional mounting or structural materials, less the cost of spandrel

glass or other building material that would have been used in the event

that building-integrated photovoltaic modules were not installed,

(B) incremental labor costs properly allocable to on-site preparation,

assembly and original installation of photovoltaic modules, and

(C) incremental architectural and engineering services and designs and

plans directly related to the construction or installation of

photovoltaic modules.

(13) "NYSERDA" means the New York state energy research and

development authority.

(14) "Qualifying alternate energy sources" means building-integrated

and non-building-integrated photovoltaic modules and fuel cells

installed to serve the base building or tenant space which have the

capability to monitor their AC output, and which are validated upon

installation, and annually thereafter, to ensure that such systems meet

their design specifications.

(15) "Tenant improvements" means improvements which are necessary or

appropriate to support or conduct the business of a tenant or occupying

owner.

(16) "Tenant space" means the portion of a building intended for

occupancy by a tenant or occupying owner.

(c) Certifications. (1) Initial credit component certificate. Upon

application by a taxpayer, DEC shall issue an initial credit component

certificate where the taxpayer has made a showing that the taxpayer is

likely within a reasonable time to place in service property which would

warrant the allowance of a credit under this section. Such certificate

shall state the first taxable year for which the credit may be claimed

and an expiration date, and shall apply only to property placed in

service by such expiration date. Such expiration date may be extended at

the discretion of DEC, in order to avoid unwarranted hardship. Such

certificates shall state the maximum amount of credit component

allowable for each of the five taxable years for which the credit

component is allowed, under paragraphs two through seven of subdivision

(a) of this section.

(a) Period one. Initial credit component certificates for period one

may be issued in years 2000-2004. Such certificates for period one shall

not be issued, in the aggregate, for more than twenty-five million

dollars worth of credit components. In addition, such certificates for

period one shall be limited in their applicability, as follows:

Credit components in the aggregate With respect to taxable

shall not be allowed for more than: years beginning in:

$ 1 million 2001

$ 2 million 2002

$ 3 million 2003

$ 4 million 2004

$ 5 million 2005

$ 4 million 2006

$ 3 million 2007

$ 2 million 2008

$ 1 million 2009

Provided, however, that if as of the end of a calendar year,

certificates for credit component amounts totalling less than the amount

permitted with respect to taxable years commencing in such calendar year

have been issued, then the amount permitted with respect to taxable

years commencing in the subsequent calendar year shall be augmented by

the amount of such shortfall.

(b) Period two. Initial credit component certificates for period two

may be issued in years 2005-2009. Such certificates for period two shall

not be issued, in the aggregate, for more than twenty-five million

dollars worth of credit components. The total amount of credit component

allowable for the five taxable years for which the credit components are

allowed, as set forth on any one initial credit component certificate,

shall be limited to two million dollars. However, a taxpayer that is the

owner or tenant of more than one building that qualifies for the credits

provided for under this section may be issued initial credit component

certificates with respect to each such building with the aggregate

amount of credit components permitted for each such certificate being

two million dollars. Provided further, a taxpayer that is the owner or

tenant of a building for which an initial credit component certificate

was issued for period one, shall not be issued an initial credit

component certificate with respect to such building for period two. In

addition, such certificates for period two shall be limited in their

applicability, as follows:

Credit components in the aggregate With respect to taxable

shall not be allowed for more than: years beginning in:

$ 1 million 2006

$ 2 million 2007

$ 3 million 2008

$ 4 million 2009

$ 5 million 2010

$ 4 million 2011

$ 3 million 2012

$ 2 million 2013

$ 1 million 2014

Provided, however, that if as of the end of a calendar year,

certificates for credit component amounts totaling less than the amount

permitted with respect to taxable years commencing in such calendar year

have been issued, then the amount permitted with respect to taxable

years commencing in the subsequent calendar year shall be augmented by

the amount of such shortfall. Provided, further, that if at the end of

calendar year two thousand nine, certificates for credit component

amounts issued by the DEC have totaled less than twenty-five million

dollars for calendar years 2005-2009, then the period to issue initial

credit component certificates shall be extended to the end of calendar

year two thousand ten and the DEC shall be permitted to issue in two

thousand ten initial credit component certificates for amounts that

equal the difference between the amounts issued for calendar years

2005-2009 and twenty-five million dollars.

(c) For purposes of either period one or two, if a taxpayer who is

issued an initial credit component certificate is unable to claim as a

credit any amount of credit component (i) such amount of unclaimed

credit component may be allocated to another taxpayer that has already

been issued an initial credit component certificate with such

certificate being reissued to reflect the amount so allocated, provided

that such other taxpayer applied for and would have qualified for such

additional amount, and with respect to period two the initial credit

component certificate of such other taxpayer as augmented does not

exceed the two million dollar limit, or as an alternative (ii) the DEC

may issue to other applicants new initial credit component certificates

which include such amounts of unclaimed credit components. If a taxpayer

is unable to claim all or a portion of the amount of credit components

after the close of the last calendar year for which initial credit

component certificates may be issued, the DEC shall have twelve months

to accept applications for and issue initial credit component

certificates for such amount of unclaimed credit components.

(2) Eligibility certificate. For each taxable year for which a

taxpayer claims a credit under this section with respect to a green

building, green base building or green tenant space, a fuel cell, or

photovoltaic modules, or air conditioning equipment using an

EPA-approved non-ozone depleting refrigerant or other EPA-approved

refrigerant approved by the commissioner of environmental conservation,

the taxpayer shall obtain from an architect or professional engineer

licensed to practice in this state an eligibility certificate. Such

certificate shall consist of a certification, under the seal of such

architect or engineer, that the building, base building or tenant space

with respect to which the credit is claimed is a green building, green

base building or green tenant space, respectively, that the fuel cell or

photovoltaic modules constitute qualifying alternate energy sources and

that the air conditioning equipment uses an EPA-approved non-ozone

depleting refrigerant or other EPA-approved refrigerant approved by the

commissioner of environmental conservation and remains in service. Such

certification shall be made in accordance with the standards and

guidelines in effect at the time the property which is the basis for the

credit was placed in service. Such certification shall set forth the

specific findings upon which the certification was based. The taxpayer

shall file such certificate, and the associated initial credit component

certificate, with the claim for credit and shall file duplicate copies

with DEC. Such certificate shall include sufficient information to

identify each building or space, and such other information as DEC and

the commissioner shall prescribe.

(3) Wrongful certification. If DEC has reason to believe that an

architect or professional engineer, in making any certification under

this subdivision, engaged in professional misconduct, then DEC shall so

inform the education department.

(d) Other requirements; miscellaneous. (1) Record keeping. Each

taxpayer shall, for any taxable year for which the green building credit

provided for under this section is claimed, maintain records of the

following information:

(A) annual energy consumption for building, base building or tenant

space;

(B) annual results of air monitoring;

(C) annual confirmation that the building, base building or tenant

space continues to meet requirements regarding smoking areas, if

provided;

(D) tenant guidelines referred to in subparagraph (I) of paragraph

nine of subdivision (b) of this section, if applicable;

(E) all written notification of tenants and requests to remedy any

indoor air quality problems;

(F) initial and annual (by month) results of validation of performance

of photovoltaic modules and fuel cells; and

(G) certifications as to off-gassing and other contamination, as

prescribed in subclause (III) of clause (ii) of subparagraph (B) of

paragraph nine of subdivision (b) of this section, where applicable.

(2) Reporting to DEC. Each taxpayer shall also provide to DEC the

information described in paragraph one of this subdivision, in the form

and at the time prescribed by DEC, such time to be determined in

consultation with the commissioner. Such information shall be provided

to DEC with respect to each taxable year with respect to which the

taxpayer claims a credit under this section.

(3) Regulations. The commissioner, the commissioner of environmental

conservation and the commissioner of education are hereby authorized to

promulgate and adopt regulations necessary to the implementation of this

section. Such regulations shall construe the provisions of this section

in such a manner as to encourage the development of green buildings,

green base buildings and green tenant space and to maintain high but

commercially reasonable standards for obtaining tax credits hereunder.

Such regulations shall establish a reasonable time or period of time for

submission of applications, and shall establish a method for allocating

initial credit component certificates among eligible applicants.

Regulations, standards or requirements adopted pursuant to this section

shall apply only to a "green base building" as defined in paragraph nine

of subdivision (b) of this section, a "green building" as defined in

paragraph ten of subdivision (b) or "green tenant space" as defined in

paragraph eleven of subdivision (b) of this section.

(4) Report. For period one, on or before April first, two thousand

eleven, the commissioner and the commissioner of DEC, jointly and in

consultation with NYSERDA, shall submit a written report regarding the

number of certifications and taxpayers claiming the credit provided for

under this section; the amount of the credits claimed, the geographical

distribution of the credits claimed; and any other such available

information DEC may deem meaningful and appropriate. A preliminary

version of such report for period one shall be so issued by April first,

two thousand five. For period two, on or before April first, two

thousand sixteen the commissioner and the commissioner of DEC, jointly

and in consultation with NYSERDA, shall submit a written report

regarding the number of certificates and taxpayers claiming the credit

provided for under this section; the amount of the credits claimed, the

geographical distribution of the credits claimed; and any other such

available information DEC may deem meaningful and appropriate. A

preliminary version of such report for period two shall be issued by

April first, two thousand ten. The commissioner and the commissioner of

DEC shall ensure that the information is presented and/or classified in

a manner consistent with the secrecy requirements of this chapter. DEC

shall also make recommendations regarding the establishment of a

permanent green building tax credit program. Recommendations may include

methods to enhance the effectiveness, simplicity or other aspects of the

program. The report shall be submitted to the governor, the temporary

president of the senate, the speaker of the assembly, the chairman of

the senate finance committee and the chairman of the assembly ways and

means committee.

(e) Standards and regulations. (1) Energy standards: base buildings.

Within six months of the effective date of this section, DEC, in

consultation with NYSERDA, shall promulgate the following, with respect

to base buildings:

(A) regulations establishing standards for energy use for eligible

buildings. DEC, in consultation with NYSERDA shall review and update

such regulations if deemed necessary at least every two years from the

date on which such regulations are promulgated.

(B) regulations establishing standards for appliances and heating,

cooling and water heating equipment that, on the effective date of this

section, are covered by specifications from organizations such as the

United States department of energy or environmental protection agency.

The development of such regulations shall be informed by such

specifications. DEC, in consultation with NYSERDA shall review and

update such regulations if deemed necessary at least every two years

from the date on which such regulations are promulgated.

(C) regulations indicating the methodology by which a taxpayer shall

demonstrate compliance with subparagraph (A) of paragraph nine of

subdivision (b) of this section. Such regulations shall include, at a

minimum, a requirement to conduct hourly computer modeling for one full

year.

(D) regulations establishing standards for the commissioning of

buildings.

(2) Indoor air standards: base buildings. Within six months of the

effective date of this section, DEC, in consultation with DOH and

NYSERDA, shall promulgate regulations establishing standards, with

respect to base buildings, for (A) ventilation and exchange of

indoor/outdoor air, (B) indoor air quality management plans for the

construction or rehabilitation process, and (C) indoor air quality with

respect to levels of carbon monoxide, carbon dioxide and total volatile

organic compounds, radon and particulate matter.

(3) Standards for materials, water conservation, drainage: base

buildings. Within one year of the effective date of this section, DEC,

in consultation with NYSERDA, shall promulgate the following, with

regard to base buildings:

(A) regulations establishing standards for building materials,

finishes and furnishings regarding minimum percentages of recycled

content and renewable source material and maximum levels of toxicity and

volatile organic compounds and any other standards that the DEC deems

appropriate. Standards shall be developed for building materials,

finishes and furnishings, including but not limited to concrete and

concrete masonry units; wood and wood products; millwork substrates;

insulation; ceramic, ceramic/glass and cementitious tiles; ceiling tiles

and panels; flooring and carpet; paints, coatings, sealants and

adhesives; and furniture. The development of such standards shall be

informed by the LEED rating system. The DEC shall review and update such

regulations if deemed necessary at least every two years from the date

on which such regulations are promulgated. For purposes of this clause,

"LEED rating system" means the leadership in energy and environmental

design green building rating system criteria being developed by the

United States green building council.

(B) regulations establishing standards for buildings located in areas

where water use is not metered, which regulations shall require, at a

minimum, that the building include one of the following features:

(i) a gray water system that recovers non-sewage waste water or uses

roof or ground storm water collection systems, or recovers ground water

from sump pumps;

(ii) for buildings with a cooling tower system, such system shall be

designed with delimiters to reduce drift and evaporation; or

(iii) for buildings with exterior plants, all such plants shall be

tolerant of climate, soils and natural water availability and shall not

receive watering from municipal potable water after a period of

establishment is complete.

(C) regulations establishing standards for buildings located in areas

that do not have sewers or that have designated storm sewers, which

regulations shall require, at a minimum, that the building shall include

one of the following features:

(i) an oil grit separator or water quality pond for pretreatment of

runoff from any surface parking areas; or

(ii) at least fifty percent of nonlandscaped areas (including

roadways, surface parking, plazas and pathways), if any, shall be

comprised of pervious paving materials.

(D) regulations indicating the methodology by which taxpayers shall

demonstrate compliance with subparagraphs (B) and (C) of paragraph nine

of subdivision (b) of this section.

(4) Energy standards: tenant space. Within six months of the effective

date of this section, DEC, in consultation with NYSERDA, shall

promulgate regulations, with respect to tenant space, indicating the

methodology by which taxpayers shall demonstrate compliance with

subparagraph (A) of paragraph eleven of subdivision (b) of this section.

(5) Standards for indoor air quality, building materials, finishes and

furnishings: tenant space. Within one year of the effective date of this

section, DEC, in consultation with DOH and NYSERDA, shall promulgate

regulations, with respect to tenant space, indicating the methodology by

which taxpayers shall demonstrate compliance with subparagraph (B) of

paragraph eleven of subdivision (b) of this section.

(f) Cross-references. For application of the credit provided for in

this section, see the following provisions of this chapter:

(1) Article nine: Section one hundred eighty-seven-d;

(2) Article nine-A: Subdivision sixteen of section two hundred ten-B;

(3) Article twenty-two: Subsections (i) and (y) of section six hundred

six;

(4) Article thirty-three: Subdivision (o) of section fifteen hundred

eleven.