STATE OF NEW YORK ________________________________________________________________________ 950 2017-2018 Regular Sessions IN SENATE January 5, 2017 ___________ Introduced by Sen. FUNKE -- read twice and ordered printed, and when printed to be committed to the Committee on Investigations and Govern- ment Operations AN ACT to amend the tax law, in relation to providing a tax deduction for the installation of mechanical insulation property The People of the State of New York, represented in Senate and Assem- bly, do enact as follows: 1 Section 1. Paragraph (a) of subdivision 9 of section 208 of the tax 2 law is amended by adding a new subparagraph 20 to read as follows: 3 (20) The applicable percentage of the cost of mechanical insulation 4 property installed in real property located in this state during the 5 taxable year. 6 (A) Definitions. For purposes of this subparagraph, the following 7 definitions shall apply: (i) "Applicable percentage" shall mean the 8 lesser of: (I) thirty percent of the cost of the mechanical insulation 9 property placed in service; or (II) the excess, if any, of (a) the ener- 10 gy savings, expressed as a percentage, obtained by placing such mechan- 11 ical insulation property in service in connection with a mechanical 12 system, over (b) the energy savings, expressed as a percentage, such 13 property is required to meet by standard 90.1-2007, developed and 14 published by the American society of heating, refrigerating and air-con- 15 ditioning engineers. 16 (ii) "Cost" shall mean (I) the amounts paid during the taxable year 17 for the purchase of mechanical insulation property that is installed 18 during the taxable year and (II) labor costs paid during the taxable 19 year that are properly allocable to the preparation, assembly and 20 installation of mechanical insulation property; provided, however, in 21 the case of removal and disposal of the old mechanical insulation prop- 22 erty, cost shall mean thirty percent of the cost for purchase of the new 23 mechanical insulation property, and provided, further, that if the 24 taxpayer claims the exclusion provided by this subparagraph the taxpayer EXPLANATION--Matter in italics (underscored) is new; matter in brackets [] is old law to be omitted. LBD02482-01-7S. 950 2 1 shall exclude all amounts included in the exclusion computation pursuant 2 to this subparagraph from the computation of any other exclusion, 3 deduction or credit provided by this chapter. The term cost shall not 4 include any amount properly attributable to maintenance. 5 (iii) "Mechanical insulation property" shall mean insulation materi- 6 als, facings and accessory products (I) placed in service in connection 7 with a mechanical system which is located in the state of New York and 8 is of a character subject to an allowance for depreciation; and (II) 9 utilized for thermal, acoustical and personnel safety requirements for 10 mechanical piping and equipment, hot and cold applications, and heating, 11 venting and air conditioning applications which can be used in a variety 12 of facilities. 13 (B) For the purposes of this subparagraph, energy savings shall be 14 computed pursuant to the regulations promulgated by the commissioner of 15 the department of environmental conservation, in consultation with 16 NYSERDA. 17 § 2. Subsection (c) of section 612 of the tax law is amended by adding 18 a new paragraph 27 to read as follows: 19 (27) The applicable percentage of the cost of mechanical insulation 20 property installed in real property located in this state during the 21 taxable year. 22 (A) Definitions. For purposes of this paragraph, the following defi- 23 nitions shall apply: 24 (i) "Applicable percentage" shall mean the lesser of: 25 (I) thirty percent of the cost of the mechanical insulation property 26 placed in service; or 27 (II) the excess, if any, of (a) the energy savings, expressed as a 28 percentage, obtained by placing such mechanical insulation property in 29 service in connection with a mechanical system, over (b) the energy 30 savings, expressed as a percentage, such property is required to meet by 31 standard 90.1-2007, developed and published by the American society of 32 heating, refrigerating and air-conditioning engineers. 33 (ii) "Cost" shall mean (I) the amounts paid during the taxable year 34 for the purchase of mechanical insulation property that is installed 35 during the taxable year, and (II) for labor costs paid during the taxa- 36 ble year that are properly allocable to the preparation, assembly and 37 installation of mechanical insulation property, provided, however, in 38 the case of removal and disposal of the old mechanical insulation prop- 39 erty, cost shall mean thirty percent of the cost for purchase of the new 40 mechanical insulation property, and provided, further, that if the 41 taxpayer claims the exclusion provided by this subparagraph the taxpayer 42 shall exclude all amounts included in the exclusion computation pursuant 43 to this subparagraph from the computation of any other exclusion, 44 deduction or credit provided by this chapter. The term cost shall not 45 include any amount properly attributable to maintenance. 46 (iii) "Mechanical insulation property" shall mean insulation materi- 47 als, facings and accessory products (I) placed in service in connection 48 with a mechanical system which is located in the state of New York and 49 is of a character subject to an allowance for depreciation; and (II) 50 utilized for thermal, acoustical and personnel safety requirements for 51 mechanical piping and equipment, hot and cold applications, and heating, 52 venting and air conditioning applications which can be used in a variety 53 of facilities. 54 (B) For the purposes of this paragraph, energy savings shall be 55 computed pursuant to the regulations promulgated by the commissioner ofS. 950 3 1 the department of environmental conservation, in consultation with 2 NYSERDA. 3 § 3. This act shall take effect on the one hundred twentieth day after 4 it shall have become a law and shall apply to taxable years commencing 5 on or after such effective date; provided, however, that effective imme- 6 diately, the addition, amendment and/or repeal of any rule or regulation 7 necessary for the implementation of this act on its effective date are 8 authorized and directed to be made and completed on or before such 9 effective date.