2023 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.