LBD15322-02-6
S. 9578 2
1. "ACCOUNT" OR "ENERGY SAVINGS ACCOUNT" SHALL MEAN AN INDIVIDUAL
SAVINGS ACCOUNT ESTABLISHED IN ACCORDANCE WITH THE PROVISIONS OF THIS
ARTICLE FOR THE EXCLUSIVE BENEFIT OF THE ACCOUNT OWNER.
2. "ACCOUNT OWNER" SHALL MEAN A TAXPAYER WHO ENTERS INTO AN ENERGY
SAVINGS AGREEMENT PURSUANT TO THE PROVISIONS OF THIS ARTICLE.
3. "DESIGNATED BENEFICIARY" SHALL MEAN, WITH RESPECT TO AN ACCOUNT OR
ACCOUNTS, THE DESIGNATED INDIVIDUAL OR INDIVIDUALS WHOSE ENERGY
PURCHASE EXPENSES ARE EXPECTED TO BE PAID FROM THE ACCOUNT OR ACCOUNTS.
4. "FINANCIAL ORGANIZATION" SHALL MEAN AN ORGANIZATION AUTHORIZED TO
DO BUSINESS IN THE STATE, AND (A) WHICH IS AN AUTHORIZED FIDUCIARY TO
ACT AS A TRUSTEE PURSUANT TO THE PROVISIONS OF AN ACT OF CONGRESS ENTI-
TLED "EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974", AS SUCH
PROVISIONS MAY BE AMENDED FROM TIME TO TIME, OR AN INSURANCE COMPANY;
AND (B)(I) IS LICENSED OR CHARTERED BY THE DEPARTMENT OF FINANCIAL
SERVICES, (II) IS CHARTERED BY AN AGENCY OF THE FEDERAL GOVERNMENT,
(III) IS SUBJECT TO THE JURISDICTION AND REGULATION OF THE SECURITIES
AND EXCHANGE COMMISSION OF THE FEDERAL GOVERNMENT, (IV) IS ANY OTHER
ENTITY OTHERWISE AUTHORIZED TO ACT IN THIS STATE AS A TRUSTEE PURSUANT
TO THE PROVISIONS OF AN ACT OF CONGRESS ENTITLED "EMPLOYEE RETIREMENT
INCOME SECURITY ACT OF 1974", AS SUCH PROVISIONS MAY BE AMENDED FROM
TIME TO TIME, (V) OR ANY BANKING ORGANIZATION AS DEFINED IN SUBDIVISION
ELEVEN OF SECTION TWO OF THE BANKING LAW, NATIONAL BANKING ASSOCIATION,
STATE CHARTERED CREDIT UNION, FEDERAL MUTUAL SAVINGS BANK, FEDERAL
SAVINGS AND LOAN ASSOCIATION OR FEDERAL CREDIT UNION.
5. "PROGRAM" SHALL MEAN THE NEW YORK ENERGY SAVINGS PROGRAM ESTAB-
LISHED PURSUANT TO THIS ARTICLE.
6. "QUALIFIED ENERGY PURCHASE EXPENSES" SHALL MEAN MONIES APPLIED FOR
THE PURCHASE OF THE FOLLOWING: ENERGY EFFICIENCY UPGRADES FOR RESIDEN-
TIAL BUILDINGS BASED UPON EXPENDITURES IN COMPLIANCE WITH THE STATE
ENERGY CONSERVATION CONSTRUCTION CODE PURSUANT TO ARTICLE ELEVEN OF
THIS CHAPTER, OR UPON EXPENDITURES IN COMPLIANCE WITH THE NEW YORK STATE
UNIFORM FIRE PREVENTION AND BUILDING CODE ACT PURSUANT TO ARTICLE EIGH-
TEEN OF THE EXECUTIVE LAW, EXPENDITURES TO PURCHASE A BATTERY POWERED
ELECTRIC VEHICLE FOR PERSONAL USE OR EXPENDITURES TO PURCHASE VEHICLE
CHARGING INFRASTRUCTURE FOR RESIDENTIAL USE SUBJECT TO RULES OR REGU-
LATIONS PROMULGATED BY NEW YORK STATE ENERGY RESEARCH AND DEVELOPMENT
AUTHORITY TO IDENTIFY SUCH QUALIFIED ENERGY EXPENSES OR PAYMENTS TO MEET
OUTSTANDING UNPAID UTILITY BILLS.
7. "QUALIFIED WITHDRAWAL" SHALL MEAN A WITHDRAWAL FROM AN ACCOUNT TO
PAY THE QUALIFIED ENERGY PURCHASE EXPENSE OF THE ACCOUNT OWNER.
8. "NONQUALIFIED WITHDRAWAL" SHALL MEAN A WITHDRAWAL FROM AN ACCOUNT
BUT SHALL NOT INCLUDE:
(A) A QUALIFIED WITHDRAWAL;
(B) A WITHDRAWAL MADE AS THE RESULT OF DEATH;
(C) AN UNFORESEEABLE EMERGENCY; OR
(D) NEED BASED UPON QUALIFYING FOR MILITARY SERVICE IN THE ARMED FORC-
ES OF THE UNITED STATES AS DETERMINED BY RULES AND REGULATIONS PROMUL-
GATED BY THE COMPTROLLER.
9. "COMPTROLLER" SHALL MEAN THE STATE COMPTROLLER.
10. "MANAGEMENT CONTRACT" SHALL MEAN THE CONTRACT EXECUTED BY THE
COMPTROLLER AND A FINANCIAL ORGANIZATION SELECTED TO ACT AS A DEPOSITORY
AND MANAGER OF THE PROGRAM.
11. "ENERGY SAVINGS AGREEMENT" SHALL MEAN AN AGREEMENT BETWEEN THE
COMPTROLLER OR A FINANCIAL ORGANIZATION AND THE ACCOUNT OWNER.
12. "PROGRAM MANAGER" SHALL MEAN A FINANCIAL ORGANIZATION SELECTED BY
THE COMPTROLLER TO ACT AS A DEPOSITORY AND MANAGER OF THE PROGRAM.
S. 9578 3
13. "COMMISSIONER" SHALL MEAN THE COMMISSIONER OF TAXATION AND
FINANCE.
§ 13-104. FUNCTIONS OF THE COMPTROLLER. 1. THE COMPTROLLER SHALL
IMPLEMENT THE PROGRAM UNDER THE TERMS AND CONDITIONS ESTABLISHED BY THIS
ARTICLE AND A MEMORANDUM OF UNDERSTANDING WITH THE COMMISSIONER RELATING
TO ANY TERMS OR CONDITIONS NOT OTHERWISE EXPRESSLY PROVIDED FOR IN THIS
ARTICLE.
2. IN FURTHERANCE OF SUCH IMPLEMENTATION THE COMPTROLLER SHALL:
(A) DEVELOP AND IMPLEMENT THE PROGRAM IN A MANNER CONSISTENT WITH THE
PROVISIONS OF THIS ARTICLE THROUGH RULES AND REGULATIONS ESTABLISHED IN
ACCORDANCE WITH THE STATE ADMINISTRATIVE PROCEDURE ACT;
(B) ENGAGE THE SERVICES OF CONSULTANTS ON A CONTRACT BASIS FOR RENDER-
ING PROFESSIONAL AND TECHNICAL ASSISTANCE AND ADVICE;
(C) SEEK RULINGS AND OTHER GUIDANCE FROM THE UNITED STATES DEPARTMENT
OF TREASURY AND THE INTERNAL REVENUE SERVICE RELATING TO THE PROGRAM;
(D) MAKE CHANGES TO THE PROGRAM REQUIRED FOR THE PARTICIPANTS IN THE
PROGRAM TO OBTAIN THE STATE INCOME TAX BENEFITS OR TREATMENT PROVIDED BY
THIS ARTICLE;
(E) CHARGE, IMPOSE AND COLLECT ADMINISTRATIVE FEES AND SERVICE CHARGES
IN CONNECTION WITH ANY AGREEMENT, CONTRACT OR TRANSACTION RELATING TO
THE PROGRAM;
(F) DEVELOP MARKETING PLANS AND PROMOTION MATERIALS;
(G) ESTABLISH THE METHODS BY WHICH THE FUNDS HELD IN SUCH ACCOUNTS BE
DISBURSED;
(H) ESTABLISH THE METHOD BY WHICH FUNDS SHALL BE ALLOCATED TO PAY FOR
ADMINISTRATIVE COSTS; AND
(I) DO ALL THINGS NECESSARY AND PROPER TO CARRY OUT THE PURPOSES OF
THIS ARTICLE.
§ 13-105. POWERS OF THE COMPTROLLER. 1. THE COMPTROLLER MAY IMPLEMENT
THE PROGRAM THROUGH USE OF FINANCIAL ORGANIZATIONS AS ACCOUNT DEPOSITO-
RIES AND MANAGERS. UNDER THE PROGRAM, AN ACCOUNT OWNER MAY ESTABLISH
ACCOUNTS DIRECTLY WITH AN ACCOUNT DEPOSITORY.
2. THE COMPTROLLER MAY SOLICIT PROPOSALS FROM FINANCIAL ORGANIZATIONS
TO ACT AS DEPOSITORIES AND MANAGERS OF THE PROGRAM. FINANCIAL ORGANIZA-
TIONS SUBMITTING PROPOSALS SHALL DESCRIBE THE INVESTMENT INSTRUMENT
WHICH WILL BE HELD IN ACCOUNTS. THE COMPTROLLER SHALL SELECT AS PROGRAM
DEPOSITORIES AND MANAGERS THE FINANCIAL ORGANIZATION, FROM AMONG THE
BIDDING FINANCIAL ORGANIZATIONS THAT DEMONSTRATES THE MOST ADVANTAGEOUS
COMBINATION, BOTH TO POTENTIAL PROGRAM PARTICIPANTS AND THIS STATE, OF
THE FOLLOWING FACTORS:
(A) FINANCIAL STABILITY AND INTEGRITY OF THE FINANCIAL ORGANIZATION;
(B) THE SAFETY OF THE INVESTMENT INSTRUMENT BEING OFFERED;
(C) THE ABILITY OF THE FINANCIAL ORGANIZATION TO SATISFY RECORDKEEPING
AND REPORTING REQUIREMENTS;
(D) THE FINANCIAL ORGANIZATION'S PLAN FOR PROMOTING THE PROGRAM AND
THE INVESTMENT IT IS WILLING TO MAKE TO PROMOTE THE PROGRAM;
(E) THE FEES, IF ANY, PROPOSED TO BE CHARGED TO PERSONS FOR OPENING
ACCOUNTS;
(F) THE MINIMUM INITIAL DEPOSIT AND MINIMUM CONTRIBUTIONS THAT THE
FINANCIAL ORGANIZATION WILL REQUIRE;
(G) THE ABILITY OF BANKING ORGANIZATIONS TO ACCEPT ELECTRONIC WITH-
DRAWALS, INCLUDING PAYROLL DEDUCTION PLANS; AND
(H) OTHER BENEFITS TO THE STATE OR ITS RESIDENTS INCLUDED IN THE
PROPOSAL, INCLUDING FEES PAYABLE TO THE STATE TO COVER EXPENSES OF OPER-
ATION OF THE PROGRAM.
S. 9578 4
3. THE COMPTROLLER MAY ENTER INTO A CONTRACT WITH A FINANCIAL ORGAN-
IZATION. SUCH FINANCIAL ORGANIZATION MANAGEMENT MAY PROVIDE ONE OR MORE
TYPES OF INVESTMENT INSTRUMENT.
4. THE COMPTROLLER MAY SELECT MORE THAN ONE FINANCIAL ORGANIZATION FOR
THE PROGRAM.
5. A MANAGEMENT CONTRACT SHALL INCLUDE, AT A MINIMUM, TERMS REQUIRING
THE FINANCIAL ORGANIZATION TO:
(A) TAKE ANY ACTION REQUIRED TO KEEP THE PROGRAM IN COMPLIANCE WITH
REQUIREMENTS OF SECTION 13-106 OF THIS ARTICLE AND ANY ACTIONS NOT
CONTRARY TO ITS CONTRACT TO MANAGE THE PROGRAM TO QUALIFY AS AN "ENERGY
SAVINGS ACCOUNT" UNDER PARAGRAPH FORTY-EIGHT OF SUBSECTION (C) OF
SECTION SIX HUNDRED TWELVE OF THE TAX LAW;
(B) KEEP ADEQUATE RECORDS OF EACH ACCOUNT, KEEP EACH ACCOUNT SEGRE-
GATED FROM EACH OTHER ACCOUNT, AND PROVIDE THE COMPTROLLER WITH THE
INFORMATION NECESSARY TO PREPARE THE STATEMENTS REQUIRED BY SECTION
13-106 OF THIS ARTICLE;
(C) COMPILE AND TOTAL INFORMATION CONTAINED IN STATEMENTS REQUIRED TO
BE PREPARED UNDER SECTION 13-106 OF THIS ARTICLE AND PROVIDE SUCH COMPI-
LATIONS TO THE COMPTROLLER;
(D) IF THERE IS MORE THAN ONE PROGRAM MANAGER, PROVIDE THE COMPTROLLER
WITH SUCH INFORMATION NECESSARY TO DETERMINE COMPLIANCE WITH SECTION
13-106 OF THIS ARTICLE;
(E) PROVIDE THE COMPTROLLER OR SUCH COMPTROLLER'S DESIGNEE ACCESS TO
THE BOOKS AND RECORDS OF THE PROGRAM MANAGER TO THE EXTENT NEEDED TO
DETERMINE COMPLIANCE WITH THE CONTRACT;
(F) HOLD ALL ACCOUNTS FOR THE BENEFIT OF THE ACCOUNT OWNER;
(G) BE AUDITED AT LEAST ANNUALLY BY A FIRM OF CERTIFIED PUBLIC
ACCOUNTANTS SELECTED BY THE PROGRAM MANAGER AND THAT THE RESULTS OF SUCH
AUDIT BE PROVIDED TO THE COMPTROLLER;
(H) PROVIDE THE COMPTROLLER WITH COPIES OF ALL REGULATORY FILINGS AND
REPORTS MADE BY IT DURING THE TERM OF THE MANAGEMENT CONTRACT OR WHILE
IT IS HOLDING ANY ACCOUNTS, OTHER THAN CONFIDENTIAL FILINGS OR REPORTS
THAT WILL NOT BECOME PART OF THE PROGRAM. THE PROGRAM MANAGER SHALL MAKE
AVAILABLE FOR REVIEW BY THE COMPTROLLER THE RESULTS OF ANY PERIODIC
EXAMINATION OF SUCH MANAGER BY ANY STATE OR FEDERAL BANKING, INSURANCE
OR SECURITIES COMMISSION, EXCEPT TO THE EXTENT THAT SUCH REPORT OR
REPORTS MAY NOT BE DISCLOSED UNDER APPLICABLE LAW OR THE RULES OF SUCH
COMMISSION; AND
(I) ENSURE THAT ANY DESCRIPTION OF THE PROGRAM, WHETHER IN WRITING OR
THROUGH THE USE OF ANY MEDIA, IS CONSISTENT WITH THE MARKETING PLAN AS
DEVELOPED PURSUANT TO THE PROVISIONS OF SECTION 13-104 OF THIS ARTICLE.
6. THE COMPTROLLER MAY PROVIDE THAT AN AUDIT SHALL BE CONDUCTED OF THE
OPERATIONS AND FINANCIAL POSITION OF THE PROGRAM DEPOSITORY AND MANAGER
AT ANY TIME IF THE COMPTROLLER HAS ANY REASON TO BE CONCERNED ABOUT THE
FINANCIAL POSITION, THE RECORDKEEPING PRACTICES, OR THE STATUS OF
ACCOUNTS OF SUCH PROGRAM DEPOSITORY AND MANAGER.
7. DURING THE TERM OF ANY CONTRACT WITH A PROGRAM MANAGER, THE COMP-
TROLLER SHALL CONDUCT AN EXAMINATION OF SUCH MANAGER AND ITS HANDLING OF
ACCOUNTS. SUCH EXAMINATION SHALL BE CONDUCTED AT LEAST BIENNIALLY IF
SUCH MANAGER IS NOT OTHERWISE SUBJECT TO PERIODIC EXAMINATION BY THE
SUPERINTENDENT OF FINANCIAL SERVICES, THE FEDERAL DEPOSIT INSURANCE
CORPORATION OR OTHER SIMILAR ENTITY.
8. (A) IF SELECTION OF A FINANCIAL ORGANIZATION AS A PROGRAM MANAGER
OR DEPOSITORY IS NOT RENEWED, AFTER THE END OF ITS TERM:
(I) ACCOUNTS PREVIOUSLY ESTABLISHED AND HELD IN INVESTMENT INSTRUMENTS
AT SUCH FINANCIAL ORGANIZATION MAY BE TERMINATED;
S. 9578 5
(II) ADDITIONAL CONTRIBUTIONS MAY BE MADE TO SUCH ACCOUNTS;
(III) NO NEW ACCOUNTS MAY BE PLACED WITH SUCH FINANCIAL ORGANIZATION;
AND
(IV) EXISTING ACCOUNTS HELD BY SUCH DEPOSITORY SHALL REMAIN SUBJECT TO
ALL OVERSIGHT AND REPORTING REQUIREMENTS ESTABLISHED BY THE COMPTROLLER.
(B) IF THE COMPTROLLER TERMINATES A FINANCIAL ORGANIZATION AS A
PROGRAM MANAGER OR DEPOSITORY, SUCH COMPTROLLER SHALL TAKE CUSTODY OF
ACCOUNTS HELD BY SUCH FINANCIAL ORGANIZATION AND SHALL SEEK TO PROMPTLY
TRANSFER SUCH ACCOUNTS TO ANOTHER FINANCIAL ORGANIZATION THAT IS
SELECTED AS A PROGRAM MANAGER OR DEPOSITORY AND INTO INVESTMENT INSTRU-
MENTS AS SIMILAR TO THE ORIGINAL INSTRUMENTS AS POSSIBLE.
9. THE COMPTROLLER MAY ENTER INTO SUCH CONTRACTS AS IT DEEMS NECESSARY
AND PROPER FOR THE IMPLEMENTATION OF THE PROGRAM.
§ 13-106. PROGRAM REQUIREMENTS; ENERGY SAVINGS ACCOUNT. 1. ENERGY
SAVINGS ACCOUNTS ESTABLISHED PURSUANT TO THE PROVISIONS OF THIS ARTICLE
SHALL BE GOVERNED BY THE PROVISIONS OF THIS SECTION.
2. AN ENERGY SAVINGS ACCOUNT MAY BE OPENED BY ANY PERSON WHO DESIRES
TO SAVE MONEY FOR THE PAYMENT OF THE QUALIFIED ENERGY EXPENSES OF THE
ACCOUNT OWNER OR DESIGNATED BENEFICIARY. AN ACCOUNT OWNER MAY DESIGNATE
ANOTHER PERSON AS SUCCESSOR OWNER OF THE ACCOUNT IN THE EVENT OF THE
DEATH OF THE ORIGINAL ACCOUNT OWNER. SUCH PERSON WHO OPENS AN ACCOUNT OR
ANY SUCCESSOR OWNER SHALL BE CONSIDERED THE ACCOUNT OWNER.
(A) AN APPLICATION FOR SUCH ACCOUNT SHALL BE IN THE FORM PRESCRIBED BY
THE PROGRAM AND CONTAIN THE FOLLOWING:
(I) THE NAME, ADDRESS AND SOCIAL SECURITY NUMBER OR EMPLOYER IDENTIFI-
CATION NUMBER OF THE ACCOUNT OWNER;
(II) THE DESIGNATION OF A DESIGNATED BENEFICIARY;
(III) THE NAME, ADDRESS, AND SOCIAL SECURITY NUMBER OF THE DESIGNATED
BENEFICIARY; AND
(IV) SUCH OTHER INFORMATION AS THE PROGRAM MAY REQUIRE.
(B) THE COMPTROLLER AND THE CORPORATION MAY ESTABLISH A NOMINAL FEE
FOR SUCH APPLICATION.
3. ANY PERSON, INCLUDING THE ACCOUNT OWNER, MAY MAKE CONTRIBUTIONS TO
THE ACCOUNT AFTER THE ACCOUNT IS OPENED.
4. CONTRIBUTIONS TO ACCOUNTS MAY BE MADE ONLY IN CASH.
5. AN ACCOUNT OWNER MAY WITHDRAW ALL OR PART OF THE BALANCE FROM AN
ACCOUNT AS AUTHORIZED UNDER RULES GOVERNING THE PROGRAM. SUCH RULES
SHALL INCLUDE PROVISIONS THAT WILL GENERALLY ENABLE THE DETERMINATION AS
TO WHETHER A WITHDRAWAL IS A NONQUALIFIED WITHDRAWAL OR A QUALIFIED
WITHDRAWAL.
6. (A) AN ACCOUNT OWNER MAY CHANGE THE DESIGNATED BENEFICIARY OF AN
ACCOUNT IN ACCORDANCE WITH PROCEDURES ESTABLISHED BY THE MEMORANDUM OF
UNDERSTATING PURSUANT TO THE PROVISIONS OF SECTION 13-104 OF THIS ARTI-
CLE.
(B) AN ACCOUNT OWNER MAY TRANSFER ALL OR A PORTION OF AN ACCOUNT TO
ANOTHER ENERGY SAVINGS ACCOUNT.
(C) CHANGES IN DESIGNATED BENEFICIARIES AND TRANSFERS UNDER THIS
SUBDIVISION SHALL NOT BE PERMITTED TO THE EXTENT THAT THEY WOULD CAUSE
ALL ACCOUNTS FOR THE SAME BENEFICIARY TO EXCEED THE PERMITTED AGGREGATE
MAXIMUM ACCOUNT BALANCE.
7. THE PROGRAM SHALL PROVIDE SEPARATE ACCOUNTING FOR EACH DESIGNATED
BENEFICIARY.
8. NO ACCOUNT OWNER OR DESIGNATED BENEFICIARY OF ANY ACCOUNT SHALL BE
PERMITTED TO DIRECT THE INVESTMENT OF ANY CONTRIBUTIONS TO AN ACCOUNT OR
THE EARNINGS THEREON MORE THAN TWO TIMES IN ANY CALENDAR YEAR.
S. 9578 6
9. NEITHER AN ACCOUNT OWNER NOR A DESIGNATED BENEFICIARY MAY USE AN
INTEREST IN AN ACCOUNT AS SECURITY FOR A LOAN. ANY PLEDGE OF AN INTEREST
IN AN ACCOUNT SHALL BE OF NO FORCE AND EFFECT.
10. THE COMPTROLLER SHALL PROMULGATE RULES OR REGULATIONS TO PREVENT
CONTRIBUTIONS ON BEHALF OF A DESIGNATED BENEFICIARY IN EXCESS OF AN
AMOUNT THAT WOULD CAUSE THE AGGREGATE ACCOUNT BALANCE FOR ALL ACCOUNTS
FOR A DESIGNATED BENEFICIARY TO EXCEED A MAXIMUM ACCOUNT BALANCE, AS
ESTABLISHED FROM TIME TO TIME BY THE COMPTROLLER.
11. CONTRIBUTIONS TO AN ENERGY SAVINGS ACCOUNT SHALL BE LIMITED TO ONE
HUNDRED THOUSAND DOLLARS PER ACCOUNT. THIS AMOUNT SHALL NOT TAKE INTO
CONSIDERATION ANY GAIN OR LOSS TO THE PRINCIPAL INVESTMENT INTO THE
ACCOUNT.
12. IN THE EVENT THAT AN INDIVIDUAL MAKES A NONQUALIFIED WITHDRAWAL OF
MONIES FROM THE ENERGY SAVINGS ACCOUNT SUCH INDIVIDUAL SHALL HAVE THE
ENTIRE ACCOUNT TAXED, INCLUDING ANY INTEREST, AS THOUGH IT WAS INCOME AT
THE ACCOUNT OWNER'S FEDERAL TAX RATE IN THE TAX YEARS THE MONIES WERE
WITHDRAWN, AND INCUR AN ADDITIONAL TEN PERCENT STATE PENALTY ON THE
AMOUNT OF EARNINGS. IN THE EVENT ACCOUNT OWNERS OR DESIGNATED BENEFICI-
ARY DOES NOT USE THE QUALIFIED ENERGY EXPENDITURES THE ACCOUNT OWNER
SHALL HAVE THE ENTIRE ACCOUNT TAXED, INCLUDING ANY INTEREST, AS THOUGH
IT WAS ORDINARY INCOME AT THE ACCOUNT OWNER'S FEDERAL TAX RATE IN THE
TAX YEARS THE MONIES WERE WITHDRAWN AND INCUR AN ADDITIONAL TEN PERCENT
STATE PENALTY ON THE AMOUNT OF EARNINGS. THE PENALTY SHALL BE IN ADDI-
TION TO ANY TAXES DUE PURSUANT TO A NON-QUALIFIED WITHDRAWAL FROM AN
ENERGY SAVINGS ACCOUNT.
13. WITHDRAWALS FROM THE ACCOUNT DURING A PERIOD OF LESS THAN TWELVE
MONTHS FROM THE DATE SUCH ACCOUNT WAS CREATED SHALL BE CONSIDERED A
NONQUALIFIED WITHDRAWAL.
14. PENALTIES MAY BE WAIVED BY THE COMMISSIONER IF THE INDIVIDUAL CAN
SHOW PROOF THAT THE REASON THE INDIVIDUAL DID NOT USE THE QUALIFIED
ENERGY EXPENDITURES WAS DUE TO EITHER:
(A) AN EMPLOYMENT RELOCATION OUTSIDE THE STATE AND SUCH RELOCATION
REQUIRED THE INDIVIDUAL TO BECOME A RESIDENT OF ANOTHER STATE;
(B) AN UNFORESEEABLE EMERGENCY;
(C) AN ABSENCE DUE TO QUALIFYING MILITARY SERVICE; OR
(D) DEATH.
FOR PURPOSES OF THIS SUBDIVISION, AN "UNFORESEEABLE EMERGENCY" SHALL
MEAN A SEVERE FINANCIAL HARDSHIP RESULTING FROM ILLNESS, ACCIDENT OR
PROPERTY LOSS TO THE ACCOUNT OWNER, OR SUCH ACCOUNT OWNER'S DEPENDENTS
RESULTING IN CIRCUMSTANCES BEYOND THEIR CONTROL. THE CIRCUMSTANCES THAT
CONSTITUTE AN UNFORESEEABLE FINANCIAL EMERGENCY WILL DEPEND ON THE FACTS
OF EACH CASE, HOWEVER, WITHDRAWAL OF ACCOUNT FUNDS MAY NOT BE MADE,
WITHOUT PENALTY, TO THE EXTENT THAT SUCH HARDSHIP IS OR MAY BE RELIEVED
BY EITHER:
(I) REIMBURSEMENT OR COMPENSATION BY INSURANCE OR OTHERWISE; OR
(II) LIQUIDATION OF THE INDIVIDUAL'S ASSETS TO THE EXTENT THE LIQUI-
DATION OF SUCH ASSETS WOULD NOT ITSELF CAUSE SEVERE FINANCIAL HARDSHIP.
15. THE COMMISSIONER AND THE COMPTROLLER ARE DIRECTED TO PROMULGATE
ALL RULES AND REGULATIONS NECESSARY TO IMPLEMENT THE PROVISIONS OF THIS
SUBDIVISION AND ARE HEREBY DIRECTED TO ESTABLISH, SUPERVISE AND REGULATE
ENERGY SAVINGS ACCOUNTS AUTHORIZED TO BE CREATED BY THIS SECTION.
16. (A) IF THERE IS ANY DISTRIBUTION FROM AN ENERGY SAVINGS ACCOUNT TO
ANY INDIVIDUAL OR FOR THE BENEFIT OF ANY INDIVIDUAL DURING A CALENDAR
YEAR, SUCH DISTRIBUTION SHALL BE REPORTED TO THE INTERNAL REVENUE
SERVICE AND THE ACCOUNT OWNER, THE DESIGNATED BENEFICIARY, OR THE
DISTRIBUTEE TO THE EXTENT REQUIRED BY FEDERAL LAW OR REGULATION.
S. 9578 7
(B) STATEMENTS SHALL BE PROVIDED TO EACH ACCOUNT OWNER AT LEAST ONCE
EACH YEAR WITHIN SIXTY DAYS AFTER THE END OF THE TWELVE-MONTH PERIOD TO
WHICH THEY RELATE. THE STATEMENT SHALL IDENTIFY THE CONTRIBUTIONS MADE
DURING A PRECEDING TWELVE-MONTH PERIOD, THE TOTAL CONTRIBUTIONS MADE TO
THE ACCOUNT THROUGH THE END OF THE PERIOD, THE VALUE OF THE ACCOUNT AT
THE END OF SUCH PERIOD, DISTRIBUTIONS MADE DURING SUCH PERIOD AND ANY
OTHER INFORMATION THAT THE COMPTROLLER SHALL REQUIRE TO BE REPORTED TO
THE ACCOUNT OWNER.
(C) STATEMENTS AND INFORMATION RELATING TO ACCOUNTS SHALL BE PREPARED
AND FILED TO THE EXTENT REQUIRED BY FEDERAL AND STATE TAX LAWS.
17. AN ANNUAL FEE MAY BE IMPOSED UPON THE ACCOUNT OWNER FOR THE MAIN-
TENANCE OF THE ACCOUNT.
18. THE PROGRAM SHALL DISCLOSE THE FOLLOWING INFORMATION IN WRITING TO
EACH ACCOUNT OWNER OF AN ENERGY SAVINGS ACCOUNT:
(A) THE TERMS AND CONDITIONS FOR ESTABLISHING AN ENERGY SAVINGS
ACCOUNT;
(B) ANY RESTRICTIONS ON THE SUBSTITUTION OF BENEFICIARIES;
(C) THE PERSON OR ENTITY ENTITLED TO TERMINATE THE ENERGY SAVINGS
AGREEMENT;
(D) THE PERIOD OF TIME DURING WHICH A BENEFICIARY MAY RECEIVE BENEFITS
UNDER THE ENERGY SAVINGS AGREEMENT;
(E) THE TERMS AND CONDITIONS UNDER WHICH MONEY MAY BE WHOLLY OR
PARTIALLY WITHDRAWN FROM THE PROGRAM, INCLUDING, BUT NOT LIMITED TO, ANY
REASONABLE CHARGES AND FEES THAT MAY BE IMPOSED FOR WITHDRAWAL;
(F) THE PROBABLE TAX CONSEQUENCES ASSOCIATED WITH CONTRIBUTIONS TO AND
DISTRIBUTIONS FROM ACCOUNTS; AND
(G) ALL OTHER RIGHTS AND OBLIGATIONS PURSUANT TO ENERGY SAVINGS AGREE-
MENTS, AND ANY OTHER TERMS, CONDITIONS, AND PROVISIONS DEEMED NECESSARY
AND APPROPRIATE BY THE TERMS OF THE MEMORANDUM OF UNDERSTANDING ENTERED
INTO PURSUANT TO SECTION 13-104 OF THIS ARTICLE.
19. ENERGY SAVINGS AGREEMENTS SHALL BE SUBJECT TO SECTION FOURTEEN-C
OF THE BANKING LAW AND THE "TRUTH-IN-SAVINGS" REGULATIONS PROMULGATED
THEREUNDER.
20. NOTHING IN THIS ARTICLE OR IN ANY ENERGY SAVINGS AGREEMENT ENTERED
INTO PURSUANT TO THIS ARTICLE SHALL BE CONSTRUED AS A GUARANTEE BY THE
STATE THAT THE ACCOUNT OWNER OR DESIGNATED BENEFICIARY WILL QUALIFY FOR
THE PURCHASE OF A QUALIFIED ENERGY EXPENSE.
21. MONIES WITHDRAWN FROM ENERGY SAVINGS ACCOUNTS AND ANY INTEREST
WHICH HAS ACCRUED SHALL NOT BE CONSIDERED AS TAXABLE INCOME TO THE
ACCOUNT OWNER FOR STATE PERSONAL INCOME TAXATION PURPOSES, SO LONG AS
THE MONIES ARE APPLIED FOR THE PURCHASE OF A QUALIFIED ENERGY EXPENSE BY
THE ACCOUNT OWNER OR DESIGNATED BENEFICIARY OF THE ACCOUNT.
§ 13-107. PROGRAM LIMITATIONS; ENERGY SAVINGS ACCOUNT. 1. NOTHING IN
THIS ARTICLE SHALL BE CONSTRUED TO:
(A) GIVE ANY DESIGNATED BENEFICIARY ANY RIGHTS OR LEGAL INTEREST WITH
RESPECT TO AN ACCOUNT UNLESS THE DESIGNATED BENEFICIARY IS THE ACCOUNT
OWNER;
(B) GUARANTEE THAT THE ACCOUNT OWNER OR DESIGNATED BENEFICIARY WILL BE
FINANCIALLY QUALIFIED FOR PURCHASE OF A QUALIFIED ENERGY EXPENSE; OR
(C) CREATE STATE RESIDENCY FOR AN INDIVIDUAL MERELY BECAUSE THE INDI-
VIDUAL IS A DESIGNATED BENEFICIARY.
2. (A) NOTHING IN THIS ARTICLE SHALL CREATE OR BE CONSTRUED TO CREATE
ANY OBLIGATION OF THE COMPTROLLER, THE STATE, OR ANY AGENCY OR INSTRU-
MENTALITY OF THE STATE TO GUARANTEE FOR THE BENEFIT OF THE ACCOUNT OWNER
OR DESIGNATED BENEFICIARY WITH RESPECT TO:
(I) THE RATE OF INTEREST OR OTHER RETURN ON ANY ACCOUNT; AND
S. 9578 8
(II) THE PAYMENT OF INTEREST OR OTHER RETURN ON ANY ACCOUNT.
(B) THE COMPTROLLER BY RULE OR REGULATION SHALL PROVIDE THAT EVERY
CONTRACT, APPLICATION, DEPOSIT SLIP OR OTHER SIMILAR DOCUMENT THAT MAY
BE USED IN CONNECTION WITH A CONTRIBUTION TO AN ACCOUNT CLEARLY INDICATE
THAT THE ACCOUNT IS NOT INSURED BY THE STATE AND NEITHER THE PRINCIPAL
DEPOSITED NOR THE INVESTMENT RETURN IS GUARANTEED BY THE STATE.
§ 2. Subsection (c) of section 612 of the tax law is amended by adding
two new paragraphs 48 and 49 to read as follows:
(48) CONTRIBUTIONS MADE DURING THE TAXABLE YEAR BY AN ACCOUNT OWNER TO
AN ENERGY SAVINGS ACCOUNT ESTABLISHED UNDER THE NEW YORK STATE ENERGY
SAVINGS PROGRAM TO THE EXTENT NOT DEDUCTIBLE OR ELIGIBLE FOR CREDIT FOR
FEDERAL INCOME TAX PURPOSES, PROVIDED, HOWEVER, THE EXCLUSION PROVIDED
FOR IN THIS PARAGRAPH SHALL NOT EXCEED FIVE THOUSAND DOLLARS FOR AN
INDIVIDUAL OR HEAD OF HOUSEHOLD, AND FOR MARRIED COUPLES WHO FILE JOINT
TAX RETURNS, SHALL NOT EXCEED TEN THOUSAND DOLLARS; PROVIDED, FURTHER
THAT SUCH EXCLUSION SHALL BE AVAILABLE ONLY TO THE ACCOUNT OWNER AND NOT
TO ANY OTHER PERSON. A TAXPAYER WITH AN ADJUSTED GROSS INCOME IN EXCESS
OF TWO HUNDRED FIFTY PERCENT OF THE AREA MEDIAN INCOME AS DEFINED BY THE
U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT SHALL NOT BE ELIGIBLE
FOR THE TAX DEDUCTION PURSUANT TO THIS SECTION.
(49) DISTRIBUTIONS FROM AN ENERGY SAVINGS ACCOUNT ESTABLISHED UNDER
THE NEW YORK STATE ENERGY SAVINGS PROGRAM PROVIDED FOR UNDER ARTICLE
THIRTEEN OF THE ENERGY LAW, TO THE EXTENT INCLUDIBLE IN GROSS INCOME FOR
FEDERAL INCOME TAX PURPOSES.
§ 3. This act shall take effect on the one hundred eightieth day after
it shall have become a law, and shall apply to taxable years commencing
on or after the first of January next succeeding the date on which it
shall have become a law; provided, however, that effective immediately,
the commissioner of taxation and finance and the state comptroller are
authorized to promulgate any rules or regulations necessary to implement
the provisions of this act on its effective date on or before such date.
