S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                   994

                       2009-2010 Regular Sessions

                            I N  S E N A T E

                            January 22, 2009
                               ___________

Introduced  by  Sen.  MARCELLINO  -- read twice and ordered printed, and
  when printed to be committed to the Committee on Energy and Telecommu-
  nications

AN ACT to amend the tax law, in relation  to  alternative  fuel  vehicle
  property tax credit

  THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section 1. Section 187-b of the tax law, as amended by section  14  of
part  W-1  of  chapter  109  of  the laws of 2006, is amended to read as
follows:
  S 187-b. Alternative fuels credit. 1. General.  A  taxpayer  shall  be
allowed  a  credit,  to  be  credited  against  the  taxes imposed under
sections one hundred eighty-three, one hundred  eighty-four,  [and]  one
hundred  eighty-five  AND  FORMER SECTION ONE HUNDRED EIGHTY-SIX of this
article. Such credit, to be computed as hereinafter provided,  shall  be
allowed for ALTERNATIVE FUEL VEHICLE PROPERTY AND alternative fuel vehi-
cle  refueling  property  placed  in  service  during  the taxable year.
Provided, however, that the amount of such credit allowable against  the
tax  imposed by section one hundred eighty-four of this article shall be
the excess of the credit allowed by this section over the amount of such
credit allowable against the tax imposed by section one hundred  eighty-
three of this article.
  2.  Alternative fuel vehicle refueling property. The credit under this
section for alternative fuel  vehicle  refueling  property  shall  equal
fifty percent of the cost of any such property:
  (a) which is located in this state; and
  (b) for which a credit is allowed under section thirty C of the inter-
nal  revenue  code  but not including alternative fuel vehicle refueling
property relating to a qualified  hybrid  vehicle  as  such  vehicle  is
defined  in subparagraph (B) of paragraph [three] FOUR of subsection (p)
of section six hundred six of this chapter.

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD02976-01-9
              

S. 994                              2

  2-A. ALTERNATIVE FUEL VEHICLE PROPERTY. THE CREDIT UNDER THIS  SECTION
FOR  ALTERNATIVE  FUEL VEHICLE PROPERTY SHALL EQUAL SIXTY PERCENT OF THE
COST OF ANY SUCH PROPERTY WHICH IS INSTALLED IN OR MANUFACTURED AS  PART
OF A MOTOR VEHICLE WHICH IS REGISTERED IN THIS STATE; PROVIDED, HOWEVER,
THE CREDIT WITH RESPECT TO ANY SUCH PROPERTY SHALL NOT EXCEED FIVE THOU-
SAND DOLLARS PER VEHICLE FOR VEHICLES WITH A GROSS VEHICLE WEIGHT RATING
OF FOURTEEN THOUSAND POUNDS OR LESS AND TEN THOUSAND DOLLARS PER VEHICLE
FOR ALL OTHER VEHICLES.
  3. Definitions. (a) The term "alternative fuel vehicle refueling prop-
erty"  means  any such property which is qualified within the meaning of
section thirty C of the internal revenue code,  PROVIDED,  HOWEVER,  FOR
THE  PURPOSES OF THIS SECTION, ALTERNATIVE FUEL REFUELING PROPERTY SHALL
ALSO INCLUDE A HOME REFUELING APPLIANCE OR PROPERTY DESIGNED FOR COMMER-
CIAL OR RESIDENTIAL USE, but shall not include alternative fuel  vehicle
refueling  property relating to a qualified hybrid vehicle as such vehi-
cle is  defined  in  subparagraph  (B)  of  paragraph  [three]  FOUR  of
subsection (p) of section six hundred six of this chapter.
  (b) The term "qualified hybrid vehicle" shall have the same meaning as
provided  for  under  subparagraph  (B)  of  paragraph  [three]  FOUR of
subsection (p) of section six hundred six of this chapter.
  (C) THE TERM "ALTERNATIVE FUEL VEHICLE PROPERTY" MEANS PROPERTY  WHICH
IS ACQUIRED FOR USE BY THE TAXPAYER AND NOT FOR RESALE, THE ORIGINAL USE
OF WHICH COMMENCES WITH THE TAXPAYER AND WHICH IS EITHER:
  (I)  A  MOTOR VEHICLE AS DEFINED IN SECTION ONE HUNDRED TWENTY-FIVE OF
THE VEHICLE AND TRAFFIC LAW WHICH IS PRODUCED BY AN  ORIGINAL  EQUIPMENT
MANUFACTURER  AND WHICH IS PROPELLED EXCLUSIVELY BY AN ALTERNATIVE FUEL,
BUT ONLY TO THE EXTENT OF THE BASIS OF SUCH VEHICLE WHICH  IS  ATTRIBUT-
ABLE TO AN ENGINE WHICH MAY USE SUCH FUEL, TO THE STORAGE OR DELIVERY TO
THE  ENGINE  OF SUCH FUEL, OR TO THE EXHAUST OF GASES FROM COMBUSTION OF
SUCH FUEL; OR
  (II) PROPERTY INSTALLED ON A MOTOR VEHICLE AS DEFINED IN  SECTION  ONE
HUNDRED TWENTY-FIVE OF THE VEHICLE AND TRAFFIC LAW WHICH IS PROPELLED BY
A FUEL WHICH IS NOT AN ALTERNATIVE FUEL, FOR PURPOSES OF PERMITTING SUCH
VEHICLE  TO  BE  PROPELLED EXCLUSIVELY BY AN ALTERNATIVE FUEL, PROVIDED,
HOWEVER, SUCH QUALIFYING PROPERTY SHALL  BE  LIMITED  TO  AN  ENGINE  OR
MODIFICATION  THEREOF WHICH MAY USE AN ALTERNATIVE FUEL OR PROPERTY USED
IN THE STORAGE OR DELIVERY TO THE ENGINE OF SUCH FUEL, OR THE EXHAUST OF
GASES FROM COMBUSTION OF SUCH FUEL.
  (D) THE TERM "ALTERNATIVE FUEL" MEANS NATURAL GAS, LIQUEFIED PETROLEUM
GAS, HYDROGEN, FUEL CELL, ELECTRICITY, AND ANY OTHER FUEL  WHICH  IS  AT
LEAST  EIGHTY-FIVE PERCENT, SINGLY OR IN COMBINATION, METHANOL, ETHANOL,
ANY OTHER ALCOHOL, OR ETHER.
  4. Carryovers. In no event shall the  credit  under  this  section  be
allowed  in an amount which will reduce the tax payable to less than the
applicable minimum tax fixed by section one hundred eighty-three or  one
hundred  eighty-five  of this article. If, however, the amount of credit
allowable under this section for any taxable year  reduces  the  tax  to
such  amount,  any  amount of credit not deductible in such taxable year
may be carried over to the following year or years and may  be  deducted
from the taxpayer's tax for such year or years.
  5.  Credit  recapture; Alternative fuel vehicle refueling property AND
ALTERNATIVE FUEL VEHICLE PROPERTY.
  (A) ALTERNATIVE FUEL VEHICLE  REFUELING  PROPERTY.  If,  at  any  time
before  the end of its recovery period, alternative fuel vehicle refuel-
ing property ceases to be qualified, a recapture amount  must  be  added
back in the year in which such cessation occurs.

S. 994                              3

  (i)  Cessation  of  qualification.  Alternative fuel vehicle refueling
property ceases to be qualified if:
  (I)  the property no longer qualifies as property described in section
thirty C of the internal revenue code; or
  (II) fifty percent or more of the use of the  property  in  a  taxable
year is other than a trade or business in this state; or
  (III)  the  taxpayer  receiving the credit under this section sells or
disposes of the property and knows or has reason to know that the  prop-
erty will be used in a manner described in this subparagraph.
  (ii)  Recapture  amount.  The  recapture amount is equal to the credit
allowable under this section multiplied by a fraction, the numerator  of
which  is the total recovery period for the property minus the number of
recovery years prior to, but not including, the recapture year, and  the
denominator of which is the total recovery period.
  (B)  ALTERNATIVE  FUEL  VEHICLES. (I) IF, WITHIN THREE FULL YEARS FROM
THE DATE A VEHICLE OF WHICH ALTERNATIVE FUEL VEHICLE PROPERTY IS A  PART
IS  PLACED  IN SERVICE, SUCH VEHICLE CEASES TO BE QUALIFIED, A RECAPTURE
AMOUNT MUST BE ADDED BACK IN  THE  TAX  YEAR  IN  WHICH  SUCH  CESSATION
OCCURS.
  (II)  CESSATION  OF  QUALIFICATION.  ALTERNATIVE FUEL VEHICLE PROPERTY
CEASES TO BE QUALIFIED IF
  (I) THE VEHICLE OF WHICH IT IS A PART IS MODIFIED BY THE  TAXPAYER  SO
THAT IT MAY NO LONGER BE PROPELLED BY AN ALTERNATIVE FUEL, OR
  (II) THE VEHICLE OTHERWISE CEASES TO QUALIFY AS ALTERNATIVE FUEL VEHI-
CLE PROPERTY AS DEFINED IN SUBDIVISION THREE OF THIS SECTION, OR
  (III)  THE  TAXPAYER  RECEIVING THE CREDIT UNDER THIS SECTION SELLS OR
DISPOSES OF THE VEHICLE AND KNOWS OR HAS REASON TO KNOW THAT THE VEHICLE
WILL BE USED IN A MANNER DESCRIBED IN THIS SUBPARAGRAPH.
  (III) RECAPTURE AMOUNT. THE RECAPTURE AMOUNT IS EQUAL  TO  THE  CREDIT
ALLOWABLE UNDER THIS SECTION MULTIPLIED BY:
  (I)  ONE  HUNDRED  PERCENT,  IF  THE CESSATION OF QUALIFICATION OCCURS
WITHIN THE FIRST FULL YEAR AFTER THE DATE  THE  PROPERTY  IS  PLACED  IN
SERVICE,
  (II)  SIXTY-SIX AND TWO-THIRDS PERCENT, IF THE CESSATION OF QUALIFICA-
TION OCCURS WITHIN THE SECOND FULL YEAR AFTER THE DATE THE  PROPERTY  IS
PLACED IN SERVICE, OR
  (III)  THIRTY-THREE  AND ONE-THIRD PERCENT, IF THE CESSATION OF QUALI-
FICATION OCCURS WITHIN THE THIRD FULL YEAR AFTER THE DATE  THE  PROPERTY
IS PLACED IN SERVICE.
  6.  Termination. The credit allowed by subdivision two of this section
shall not apply in taxable years beginning after December  thirty-first,
two thousand ten.
  S 2. Paragraph (c) of subdivision 24 of section 210 of the tax law, as
amended by section 15 of part W-1 of chapter 109 of the laws of 2006, is
amended to read as follows:
  (c)  Definitions. The term "alternative fuel vehicle refueling proper-
ty" means any such property which is qualified  within  the  meaning  of
section thirty C of the internal revenue code PROVIDED, HOWEVER, FOR THE
PURPOSES  OF THIS SUBDIVISION, ALTERNATIVE FUEL REFUELING PROPERTY SHALL
ALSO INCLUDE A HOME REFUELING APPLIANCE OR PROPERTY DESIGNED FOR COMMER-
CIAL OR RESIDENTIAL USE, but shall not include alternative fuel  vehicle
refueling  property relating to a qualified hybrid vehicle as such vehi-
cle is  defined  in  subparagraph  (B)  of  paragraph  [three]  FOUR  of
subsection (p) of section six hundred six of this chapter.
  S 3. Section 210 of the tax law is amended by adding a new subdivision
24-a to read as follows:

S. 994                              4

  24-A.  ALTERNATIVE  FUEL  VEHICLE  PROPERTY  CREDIT.  (A) GENERAL.   A
TAXPAYER SHALL BE ALLOWED A CREDIT, TO BE COMPUTED AS PROVIDED  IN  THIS
SUBDIVISION,  AGAINST  THE  TAX IMPOSED BY THIS ARTICLE, FOR ALTERNATIVE
FUEL VEHICLE PROPERTY PLACED IN SERVICE DURING THE TAXABLE YEAR.
  (B)  ALTERNATIVE  FUEL  VEHICLE  PROPERTY TAX CREDIT. THE CREDIT UNDER
THIS SUBDIVISION FOR ALTERNATIVE FUEL VEHICLE PROPERTY SHALL EQUAL SIXTY
PERCENT OF THE COST OF ANY SUCH PROPERTY WHICH IS INSTALLED IN OR  MANU-
FACTURED  AS  PART OF A MOTOR VEHICLE WHICH IS REGISTERED IN THIS STATE;
PROVIDED, HOWEVER, THE CREDIT WITH RESPECT TO ANY  SUCH  PROPERTY  SHALL
NOT  EXCEED  FIVE THOUSAND DOLLARS PER VEHICLE FOR VEHICLES WITH A GROSS
VEHICLE WEIGHT RATING OF FOURTEEN THOUSAND POUNDS OR LESS AND TEN  THOU-
SAND DOLLARS PER VEHICLE FOR ALL OTHER VEHICLES.
  (C)  DEFINITIONS.  (I)  THE  TERM  "ALTERNATIVE FUEL VEHICLE PROPERTY"
MEANS PROPERTY WHICH IS ACQUIRED FOR USE BY THE  TAXPAYER  AND  NOT  FOR
RESALE,  THE ORIGINAL USE OF WHICH COMMENCES WITH THE TAXPAYER AND WHICH
IS EITHER:
  (A) A MOTOR VEHICLE AS DEFINED IN SECTION ONE HUNDRED  TWENTY-FIVE  OF
THE  VEHICLE  AND TRAFFIC LAW WHICH IS PRODUCED BY AN ORIGINAL EQUIPMENT
MANUFACTURER AND WHICH IS PROPELLED EXCLUSIVELY BY AN ALTERNATIVE  FUEL,
BUT  ONLY  TO THE EXTENT OF THE BASIS OF SUCH VEHICLE WHICH IS ATTRIBUT-
ABLE TO AN ENGINE WHICH MAY USE SUCH FUEL, TO THE STORAGE OR DELIVERY TO
THE ENGINE OF SUCH FUEL, OR TO THE EXHAUST OF GASES FROM  COMBUSTION  OF
SUCH FUEL; OR
  (B)  PROPERTY  INSTALLED  ON A MOTOR VEHICLE AS DEFINED IN SECTION ONE
HUNDRED TWENTY-FIVE OF THE VEHICLE AND TRAFFIC LAW WHICH IS PROPELLED BY
A FUEL WHICH IS NOT AN ALTERNATIVE FUEL, FOR PURPOSES OF PERMITTING SUCH
VEHICLE TO BE PROPELLED EXCLUSIVELY BY AN  ALTERNATIVE  FUEL,  PROVIDED,
HOWEVER,  SUCH  QUALIFYING  PROPERTY  SHALL  BE  LIMITED TO AN ENGINE OR
MODIFICATION THEREOF WHICH MAY USE AN ALTERNATIVE FUEL OR PROPERTY  USED
IN THE STORAGE OR DELIVERY TO THE ENGINE OF SUCH FUEL, OR THE EXHAUST OF
GASES FROM COMBUSTION OF SUCH FUEL.
  (II) THE TERM "ALTERNATIVE FUEL" MEANS NATURAL GAS, LIQUEFIED PETROLE-
UM GAS, HYDROGEN, FUEL CELL, ELECTRICITY, AND ANY OTHER FUEL WHICH IS AT
LEAST  EIGHTY-FIVE PERCENT, SINGLY OR IN COMBINATION, METHANOL, ETHANOL,
ANY OTHER ALCOHOL, OR ETHER.
  (D) CARRYOVERS. IN NO EVENT SHALL THE CREDIT UNDER THIS SUBDIVISION BE
ALLOWED IN AN AMOUNT WHICH WILL REDUCE THE TAX PAYABLE TO LESS THAN  THE
HIGHER  OF  THE AMOUNTS PRESCRIBED IN PARAGRAPH (B) OF THIS SUBDIVISION.
PROVIDED, HOWEVER, THAT IF THE AMOUNT OF  CREDIT  ALLOWABLE  UNDER  THIS
SUBDIVISION  FOR  ANY  TAXABLE  YEAR REDUCES THE TAX TO SUCH AMOUNT, ANY
AMOUNT OF CREDIT NOT DEDUCTIBLE IN SUCH TAXABLE YEAR MAY BE CARRIED OVER
TO THE FOLLOWING YEAR OR YEARS AND MAY BE DEDUCTED FROM  THE  TAXPAYER'S
TAX FOR SUCH YEAR OR YEARS.
  (E)  CREDIT RECAPTURE. (I) IF, WITHIN THREE FULL YEARS FROM THE DATE A
VEHICLE OF WHICH ALTERNATIVE FUEL VEHICLE PROPERTY IS A PART  IS  PLACED
IN SERVICE, SUCH VEHICLE CEASES TO BE QUALIFIED, A RECAPTURE AMOUNT MUST
BE ADDED BACK IN THE TAX YEAR IN WHICH SUCH CESSATION OCCURS.
  (II)  CESSATION  OF  QUALIFICATION.  ALTERNATIVE FUEL VEHICLE PROPERTY
CEASES TO BE QUALIFIED IF
  (A) THE VEHICLE OF WHICH IT IS A PART IS MODIFIED BY THE  TAXPAYER  SO
THAT IT MAY NO LONGER BE PROPELLED BY AN ALTERNATIVE FUEL, OR
  (B)  THE VEHICLE OTHERWISE CEASES TO QUALIFY AS ALTERNATIVE FUEL VEHI-
CLE PROPERTY DEFINED IN PARAGRAPH (C) OF THIS SUBDIVISION, OR
  (C) THE TAXPAYER RECEIVING THE CREDIT UNDER THIS SUBDIVISION SELLS  OR
DISPOSES OF THE VEHICLE AND KNOWS OR HAS REASON TO KNOW THAT THE PROPER-

S. 994                              5

TY WILL BE USED IN A MANNER DESCRIBED IN SUBPARAGRAPH (A) OR (B) OF THIS
PARAGRAPH.
  (III)  RECAPTURE  AMOUNT.  THE RECAPTURE AMOUNT IS EQUAL TO THE CREDIT
ALLOWABLE UNDER THIS SUBDIVISION MULTIPLIED BY:
  (A) ONE HUNDRED PERCENT, IF  THE  CESSATION  OF  QUALIFICATION  OCCURS
WITHIN  THE  FIRST  FULL  YEAR  AFTER THE DATE THE PROPERTY IS PLACED IN
SERVICE,
  (B) SIXTY-SIX AND TWO-THIRDS PERCENT, IF THE CESSATION  OF  QUALIFICA-
TION  OCCURS  WITHIN THE SECOND FULL YEAR AFTER THE DATE THE PROPERTY IS
PLACED IN SERVICE, OR
  (C) THIRTY-THREE AND ONE-THIRD PERCENT, IF THE CESSATION OF QUALIFICA-
TION OCCURS WITHIN THE THIRD FULL YEAR AFTER THE DATE  THE  PROPERTY  IS
PLACED IN SERVICE.
  S  4.  Subsection  (p)  of  section  606 of the tax law, as amended by
section 16 of part W-l of chapter 109 of the laws of 2006, is amended to
read as follows:
  (p) Alternative fuels credit. (1) General. A taxpayer shall be allowed
a credit, to be  computed  as  hereinafter  provided,  against  the  tax
imposed by this article, for alternative fuel vehicle refueling property
AND ALTERNATIVE FUEL VEHICLE PROPERTY placed in service during the taxa-
ble year.
  (2) Alternative fuel vehicle refueling property. The credit under this
subsection  for  clean-fuel vehicle refueling property shall equal fifty
percent of the cost of any such property
  (A) which is located in this state and
  (B) for which a credit is allowed under section thirty C of the inter-
nal revenue code but not including alternative  fuel  vehicle  refueling
property  relating  to  a  qualified  hybrid  vehicle as such vehicle is
defined  in  subparagraph  (B)  of  paragraph  [three]  FOUR   of   this
subsection.
  (3)  ALTERNATIVE  FUEL  VEHICLE  PROPERTY.    THE  CREDIT  UNDER  THIS
SUBSECTION FOR ALTERNATIVE  FUEL  VEHICLE  PROPERTY  SHALL  EQUAL  SIXTY
PERCENT  OF THE COST OF ANY SUCH PROPERTY WHICH IS INSTALLED IN OR MANU-
FACTURED AS PART OF A MOTOR VEHICLE WHICH IS REGISTERED IN  THIS  STATE;
PROVIDED,  HOWEVER,  THE  CREDIT WITH RESPECT TO ANY SUCH PROPERTY SHALL
NOT EXCEED FIVE THOUSAND DOLLARS PER VEHICLE FOR VEHICLES WITH  A  GROSS
VEHICLE  WEIGHT RATING OF FOURTEEN THOUSAND POUNDS OR LESS AND TEN THOU-
SAND DOLLARS PER VEHICLE FOR ALL OTHER VEHICLES.
  (4) Definitions. (A) The  term  "alternative  fuel  vehicle  refueling
property"  means any such property which is qualified within the meaning
of section thirty C of the internal revenue code, but  such  term  shall
not  include  alternative  fuel vehicle refueling property relating to a
qualified hybrid vehicle as such vehicle is defined in subparagraph  (B)
of   this  paragraph,  PROVIDED,  HOWEVER,  FOR  THE  PURPOSES  OF  THIS
SUBSECTION, ALTERNATIVE FUEL VEHICLE REFUELING PROPERTY SHALL INCLUDE  A
HOME REFUELING APPLIANCE OR PROPERTY DESIGNED FOR COMMERCIAL OR RESIDEN-
TIAL USE.
  (B)  The  term  "qualified  hybrid  vehicle" means a motor vehicle, as
defined in section one hundred twenty-five of the  vehicle  and  traffic
law,[,] that:
  (i) draws propulsion energy from both
  (a)  an internal combustion engine (or heat engine that uses combusti-
ble fuel); and
  (b) an energy storage device; and
  (ii) employs a regenerative vehicle braking system that recovers waste
energy to charge such energy storage device.

S. 994                              6

  (C) THE TERM "ALTERNATIVE FUEL VEHICLE PROPERTY" MEANS PROPERTY  WHICH
IS ACQUIRED FOR USE BY THE TAXPAYER AND NOT FOR RESALE, THE ORIGINAL USE
OF WHICH COMMENCES WITH THE TAXPAYER AND WHICH IS EITHER:
  (I)  A  MOTOR VEHICLE AS DEFINED IN SECTION ONE HUNDRED TWENTY-FIVE OF
THE VEHICLE AND TRAFFIC LAW WHICH IS PRODUCED BY AN  ORIGINAL  EQUIPMENT
MANUFACTURER  AND WHICH IS PROPELLED EXCLUSIVELY BY AN ALTERNATIVE FUEL,
BUT ONLY TO THE EXTENT OF THE BASIS OF SUCH VEHICLE WHICH  IS  ATTRIBUT-
ABLE TO AN ENGINE WHICH MAY USE SUCH FUEL, TO THE STORAGE OR DELIVERY TO
THE  ENGINE  OF SUCH FUEL, OR TO THE EXHAUST OF GASES FROM COMBUSTION OF
SUCH FUEL; OR
  (II) PROPERTY INSTALLED ON A MOTOR VEHICLE AS DEFINED IN  SECTION  ONE
HUNDRED TWENTY-FIVE OF THE VEHICLE AND TRAFFIC LAW WHICH IS PROPELLED BY
A FUEL WHICH IS NOT AN ALTERNATIVE FUEL, FOR PURPOSES OF PERMITTING SUCH
VEHICLE  TO  BE  PROPELLED EXCLUSIVELY BY AN ALTERNATIVE FUEL, PROVIDED,
HOWEVER, SUCH QUALIFYING PROPERTY SHALL  BE  LIMITED  TO  AN  ENGINE  OR
MODIFICATION  THEREOF WHICH MAY USE AN ALTERNATIVE FUEL OR PROPERTY USED
IN THE STORAGE OR DELIVERY TO THE ENGINE OF SUCH FUEL, OR THE EXHAUST OF
GASES FROM COMBUSTION OF SUCH FUEL.
  (D) THE TERM "ALTERNATIVE FUEL" MEANS NATURAL GAS, LIQUEFIED PETROLEUM
GAS, HYDROGEN, FUEL CELL, ELECTRICITY, AND ANY OTHER FUEL  WHICH  IS  AT
LEAST  EIGHTY-FIVE PERCENT, SINGLY OR IN COMBINATION, METHANOL, ETHANOL,
ANY OTHER ALCOHOL, OR ETHER.
  [(4)] (5) Carryovers. If the amount of  credit  allowable  under  this
subsection shall exceed the taxpayer's tax for such year, the excess may
be  carried over to the following year or years and may be deducted from
the taxpayer's tax for such year or years.
  [(5)] (6) Credit recapture. (A) Vehicles.
  (i) If, within three full years from the date a qualified hybrid vehi-
cle or a vehicle of which alternative fuel vehicle property is a part is
placed in service, such qualified hybrid vehicle  or  vehicle  of  which
alternative  fuel  vehicle  property is a part ceases to be qualified, a
recapture amount must be added back in the tax year in which such cessa-
tion occurs.
  (ii) Cessation of qualification. (I) A  qualified  hybrid  vehicle  OR
VEHICLE  OF  WHICH ALTERNATIVE FUEL VEHICLE PROPERTY IS A PART ceases to
be qualified if
  (a) it is modified by the taxpayer so that  it  no  longer  meets  the
requirements  of  a qualified hybrid vehicle OR ALTERNATIVE FUEL VEHICLE
PROPERTY as defined in [subparagraph] SUBPARAGRAPHS (B) AND (C)  RESPEC-
TIVELY of paragraph [three] FOUR of this subsection[.]; OR
  (b)  the  taxpayer receiving the credit under this subsection sells or
disposes of the vehicle and knows or has reason to know that the vehicle
will be so modified.
  (B) Alternative fuel vehicle refueling property. (i) If, at  any  time
before  the end of its recovery period, alternative fuel vehicle refuel-
ing property ceases to be qualified, a recapture amount  must  be  added
back in the year in which such cessation occurs.
  (ii) Cessation of qualification. [Clean-fuel] ALTERNATIVE FUEL vehicle
refueling property ceases to be qualified if
  (I)  the property no longer qualifies as property described in section
thirty C of the internal revenue code, or
  (II) fifty percent or more of the use of the  property  in  a  taxable
year is other than in a trade or business in this state, or
  (III) the taxpayer receiving the credit under this subsection sells or
disposes  of the property and knows or has reason to know that the prop-

S. 994                              7

erty will be used in a manner described in item  (I)  or  (II)  of  this
clause.
  (iii)  Recapture  amount.  The recapture amount is equal to the credit
allowable under this subsection multiplied by a fraction, the  numerator
of  which is the total recovery period for the property minus the number
of recovery years prior to, but not including, the recapture  year,  and
the denominator of which is the total recovery period.
  [(6)]  (7)  Termination.   The credit allowed by paragraph two of this
subsection shall not apply in taxable  years  beginning  after  December
thirty-first, two thousand ten.
  S  5.  Section 1115 of the tax law is amended by adding a new subdivi-
sion (p) to read as follows:
  (P) (1) THAT PORTION OF THE RECEIPTS FROM THE RETAIL  SALE  OF  A  NEW
ALTERNATIVE  FUEL  VEHICLE WHICH IS ATTRIBUTABLE TO THE INCREMENTAL COST
OF SUCH VEHICLE SHALL BE EXEMPT FROM THE TAX IMPOSED  UNDER  SUBDIVISION
(A)  OF  SECTION ELEVEN HUNDRED FIVE OF THIS ARTICLE AND THAT PORTION OF
THE CONSIDERATION GIVEN OR CONTRACTED TO BE GIVEN  FOR  SUCH  A  VEHICLE
WHICH  IS  ATTRIBUTABLE TO THE INCREMENTAL COST OF SUCH VEHICLE SHALL BE
EXEMPT FROM THE  COMPENSATING  USE  TAX  IMPOSED  UNDER  SECTION  ELEVEN
HUNDRED  TEN  OF  THIS  ARTICLE,  BUT ONLY WHERE THE INCREMENTAL COST IS
SEPARATELY STATED IN THE WRITTEN  CONTRACT,  IF  ANY,  OR  ON  THE  BILL
RENDERED TO THE PURCHASER.
  (2)  RECEIPTS  FROM  THE  SALE  OF  THE SERVICE OF INSTALLING TANGIBLE
PERSONAL PROPERTY DESCRIBED IN PARAGRAPH THREE  OF  SUBDIVISION  (C)  OF
SECTION  ELEVEN  HUNDRED  FIVE  OF THIS ARTICLE AND OF TANGIBLE PERSONAL
PROPERTY INSTALLED IN A MOTOR VEHICLE, AS DEFINED IN SECTION ONE HUNDRED
TWENTY-FIVE OF THE VEHICLE AND TRAFFIC LAW, RENDERED OR SOLD IN ORDER TO
CONVERT SUCH A VEHICLE INTO AN ALTERNATIVE FUEL VEHICLE,  AND  CONSIDER-
ATION  GIVEN OR CONTRACTED TO BE GIVEN FOR SUCH SERVICE OR SUCH TANGIBLE
PERSONAL PROPERTY RENDERED OR SOLD FOR SUCH  PURPOSE,  SHALL  BE  EXEMPT
FROM TAX UNDER THIS ARTICLE.
  (3)  RECEIPTS  FROM  THE SALE OF THE SERVICE OF INSTALLING ALTERNATIVE
FUEL VEHICLE REFUELING PROPERTY AND FROM THE RETAIL SALE OF SUCH PROPER-
TY, AND CONSIDERATION GIVEN OR CONTRACTED TO BE GIVEN FOR  SUCH  SERVICE
OR SUCH PROPERTY SHALL BE EXEMPT FROM TAX UNDER THIS ARTICLE.
  (4)  THE EXEMPTIONS FROM TAX PROVIDED IN THIS SUBDIVISION WITH RESPECT
TO VEHICLES PROPELLED BY ELECTRICITY SHALL NOT APPLY TO THE TAX  IMPOSED
BY  SECTION ELEVEN HUNDRED FIVE OR ELEVEN HUNDRED TEN OF THIS ARTICLE ON
RECEIPTS FROM SUCH SALES TO, OR USE BY, A GAS CORPORATION OR AN ELECTRIC
CORPORATION AS DEFINED IN SUBDIVISIONS ELEVEN AND THIRTEEN,  RESPECTIVE-
LY,  OF  SECTION  TWO  OF  THE PUBLIC SERVICE LAW, OR A GAS AND ELECTRIC
CORPORATION AS DESCRIBED IN SECTION SIXTY-FOUR  OF  THE  PUBLIC  SERVICE
LAW,  WHERE  SUCH  CORPORATIONS  ARE  SUBJECT  TO THE SUPERVISION OF THE
DEPARTMENT OF PUBLIC SERVICE.
  (5) AS USED IN THIS SUBDIVISION:
  (I) "ALTERNATIVE FUEL VEHICLE" MEANS A MOTOR VEHICLE,  AS  DEFINED  IN
SECTION  ONE HUNDRED TWENTY-FIVE OF THE VEHICLE AND TRAFFIC LAW WHICH IS
PRODUCED BY AN ORIGINAL EQUIPMENT MANUFACTURER AND WHICH IS PROPELLED BY
AN ALTERNATIVE FUEL, OR IS A DUAL FUEL VEHICLE;
  (II) "ALTERNATIVE FUEL" MEANS NATURAL GAS,  LIQUEFIED  PETROLEUM  GAS,
HYDROGEN,  FUEL  CELL, ELECTRICITY, AND ANY OTHER FUEL WHICH IS AT LEAST
EIGHTY-FIVE PERCENT, SINGLY OR IN COMBINATION,  METHANOL,  ETHANOL,  ANY
OTHER ALCOHOL, OR ETHER;
  (III)  "DUAL  FUEL  VEHICLE"  MEANS A MOTOR VEHICLE THAT REQUIRES ONLY
ELECTRICITY OR ALCOHOL, PROPANE, HYDROGEN OR NATURAL  GAS  AS  ITS  SOLE
SOURCE  OF  POWER, AND THAT, WHEN IT IS NOT USING ONE OF SUCH SOURCES OF

S. 994                              8

POWER, IS ALSO CAPABLE OF USING GASOLINE OR DIESEL FUEL  TO  POWER  SUCH
VEHICLE;
  (IV)  "INCREMENTAL COST" MEANS THE INCREASED SALE PRICE OF AN ALTERNA-
TIVE FUEL VEHICLE, ABOVE THE SALE PRICE OF A  COMPARABLE  MOTOR  VEHICLE
SIMILAR  IN ALL OTHER RESPECTS BUT FOR THE EQUIPMENT NECESSARY TO RENDER
IT AN ALTERNATIVE FUEL VEHICLE, WHICH INCREASED SALE PRICE IS  ATTRIBUT-
ABLE  TO  SUCH  VEHICLE  BEING EQUIPPED TO RENDER IT AN ALTERNATIVE FUEL
VEHICLE;
  (V) "NEW ALTERNATIVE FUEL VEHICLE" MEANS AN ALTERNATIVE  FUEL  VEHICLE
WHICH IS SOLD OR PURCHASED FOR THE FIRST TIME AT RETAIL; AND
  (VI) "ALTERNATIVE FUEL VEHICLE REFUELING PROPERTY" MEANS PROPERTY:
  (A) WHICH IS SUBJECT TO AN ALLOWANCE FOR DEPRECIATION;
  (B) THE ORIGINAL USE OF WHICH BEGINS WITH THE PURCHASER; AND
  (C) WHERE SUCH PROPERTY IS PREDOMINANTLY USED FOR:
  (I)  THE  STORAGE  OR  DISPENSING  OF ALCOHOL, NATURAL GAS, PROPANE OR
HYDROGEN INTO THE FUEL TANK OF AN ALTERNATIVE FUEL VEHICLE PROPELLED  BY
SUCH  FUEL,  BUT ONLY IF THE STORAGE OR DISPENSING OF THE FUEL IS AT THE
POINT WHERE SUCH FUEL IS DELIVERED INTO THE FUEL TANK OF SUCH A VEHICLE,
OR
  (II) THE RECHARGING OF AN ALTERNATIVE FUEL VEHICLE PROPELLED BY  ELEC-
TRICITY,  BUT  ONLY  IF  THE PROPERTY IS LOCATED AT THE POINT WHERE SUCH
VEHICLE IS RECHARGED.
  S 6. This act shall take effect immediately and shall apply to taxable
years beginning on or after January 1, 2011, except that section five of
this act shall take effect March 1, 2011.