NY Tax L § 19 (2021)
2021 New York Laws TAX - Tax Article 1 - Short Title; Definitions; Miscellaneous 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.