Fund Alternative Fuel Incentives

Section 1. The state finance law is amended by adding a new section 99-ff to read as follows:

§ 99-ff. Alternative fuel incentive fund. 1. There is hereby established in the joint custody of the state comptroller and the commissioner of taxation and finance a special revenue fund to be known as the "alternative fuel incentive fund".

2. The fund shall consist of the amount of revenues from sales taxes imposed on the receipts of the price of motor and diesel fuel more than one dollar or equal to or less than two dollars.

3. Monies of the fund, when allocated, shall be disbursed for the following purposes:

(a) credits against personal income tax and corporate franchise tax for the installation or conversion of fueling stations for alternative fuels;

(b) grants for research and development in regards to fuel diversification and energy efficiency in the transportation sector;

(c) installation of alternative fueling stations at each of the twenty-seven travel plazas on the New York state thruway;

(d) grants for a cellulosic ethanol refinery; and

(e) administrative costs borne by the department of taxation and finance and the New York state energy research and development authority.

EXPLANATION--Matter in italics (underscored) is new; matter in brackets

[ ] is old law to be omitted.

LBD05234-01-9

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§ 2. Section 1148 of the tax law, as amended by section 57 of part HH of chapter 57 of the laws of 2013, is amended to read as follows:

§ 1148. Deposit and disposition of revenue. All taxes, interest and penalties collected or received by the commissioner under this article shall be deposited and disposed of pursuant to the provisions of section one hundred seventy-one-a of this chapter; provided however, the comptroller shall on or before the twelfth day of each month, pay all such taxes, interest and penalties collected under this article and remaining to the comptroller's credit in such banks, banking houses or trust companies at the close of business on the last day of the preceding month, into the general fund of the state treasury, except as otherwise provided in sections ninety-two-d, ninety-two-h, [and] ninety-two-r and ninety-nine-ff of the state finance law and sections eleven hundred two, eleven hundred four and eleven hundred nine of this article.

§ 3. Section 606 of the tax law is amended by adding two new subsections (p-1) and (jjj) to read as follows:

(p-1) 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 fuel flexible vehicles and qualified hybrid vehicles placed in service during the taxable year. Provided, however, that the credit provided for by this subsection with respect to fuel flexible vehicles shall not be allowed to a gas corporation or electric corporation as defined in subdivisions eleven and thirteen 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 corporation is subject to the supervision of the department of public service.

(2) Fuel flexible and hybrid vehicles. The credit under this subsection for fuel flexible and qualified hybrid vehicles shall equal five hundred dollars per vehicle registered in this state.

(3) Definitions. (A) The term "fuel flexible vehicle" means a vehicle which is equipped to use alternative fuel as defined in subdivision eleven of section three hundred fifty-one of the public authorities law.

(B) The term "qualified hybrid vehicle" means a motor vehicle, as defined in section one hundred twenty-five of the vehicle and traffic law, other than an electric vehicle, that:

(i) draws propulsion energy from both

(a) an internal combustion engine (or heat engine that uses combustible 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.

(4) Carryovers. If the amount of credit allowable under this subsection shall exceed the taxpayer's tax of 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) Credit recapture. (A) Vehicles. If, within three full years from the date a qualified hybrid vehicle is placed in service such vehicles cease to be qualified, a recapture amount must be added back in the tax year in which such cessation occurs.

(B) Cessation of qualification. (i) A qualified hybrid 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.

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(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.

(ii) Recapture amount. The recapture amount is equal to the credit allowable under this subsection.

(6) Termination. This subsection shall not apply to property placed in service in taxable years beginning after December thirty-first, two thousand twenty.

(jjj) Alternative fuel credit for installation or conversion of fueling stations. (1) Allowance of credit. A taxpayer shall be allowed a credit, to be computed hereinafter provided, against the tax imposed by this article for the cost of installation construction, reconstruction or acquisition of an alternative fuel refueling facility that is directly attributable to the storage, compression, charging or dispensing of alternative fuels to motor vehicles. The income tax credit would be thirty percent of the costs associated with such expenses.

(2) Application of credit. If the amount of the credit allowable under this subsection for any taxable year exceeds the taxpayer's tax for such year, fifty percent of the excess shall be treated as an overpayment of tax to be credited or refunded as provided in section six hundred eighty-six of this article, provided, however, that no interest shall be paid thereon. The balance of such credit not credited or refunded in such taxable year may be carried over to the immediately succeeding taxable year and may be deducted from the taxpayer's tax for such year. The excess, if any, of the amount of the credit over the tax for such succeeding year shall be treated as an overpayment of tax to be credited or refunded as provided in section six hundred eighty-six of this article, provided, however, that no interest shall be paid thereon.

§ 4. Subparagraph (B) of paragraph 1 of subsection (i) of section 606 of the tax law is amended by adding two new clauses (xliv) and (xlv) to read as follows: (xliv) Alternative fuels Amount of credit credit under subsection under subdivision (p-1) fifty-three of

section two hundred ten-B

(xlv) Alternative fuel credit Amount of credit for installation or under subdivision conservation of fueling fifty-four of section stations under subsection two hundred ten-B (jjj)

§ 5. Section 210-B of the tax law is amended by adding two new subdivisions 53 and 54 to read as follows:

53. Alternative fuels credit. (a) General. A taxpayer shall be allowed a credit, to be computed as hereinafter provided, against the tax imposed by this article, for fuel flexible vehicles and qualified hybrids. Provided, however, that the credit provided for by this subsection with respect to fuel flexible vehicles shall not be allowed to a gas corporation or electric corporation as defined in subdivisions eleven and thirteen 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 corporation is subject to the supervision of the department of public service.

(b) Fuel flexible vehicles and qualified hybrid vehicles. The credit under this subdivision for fuel flexible vehicles and qualified hybrid

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vehicles shall equal five hundred dollars per vehicle registered in this state.

(c) Definitions. (i) The term "fuel flexible vehicle" means a vehicle, which is equipped to use alternative fuel as defined in subdivision eleven of section three hundred fifty-one of the public authorities law.

(ii) The term "qualified hybrid vehicle" shall have the same meaning as provided for under subparagraph (B) of paragraph three of subsection (p-1) of section six hundred six of this chapter.

(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 (d) of subdivision one of section two hundred ten of this article. 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 qualified hybrid vehicle is placed in service ceases to be qualified, a recapture amount must be added back in the tax year in which such cessation occurs.

(ii) A qualified hybrid vehicle 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 as defined in subparagraph (B) of paragraph three of subsection (p-1) of section six hundred six of this chapter; 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.

(iii) Recapture amount. The recapture amount is equal to the credit allowable under this subdivision 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.

(f) Termination. This subdivision shall not apply to property placed in service in taxable years beginning after December thirty-first, two thousand twenty.

54. Alternative fuel credit for installation or conversion of fueling stations. (a) Allowance of credit. A taxpayer shall be allowed a credit, to be computed as hereinafter provided, against the tax imposed by this article for the cost of installation construction, reconstruction or acquisition of an alternative fuel refueling facility that is directly attributable to the storage, compression, charging or dispensing of alternative fuels to motor vehicles. The income tax credit shall be thirty percent of the costs associated with such expenses.

(b) Application of credit. The credit allowed under this subdivision for any taxable year shall not reduce the tax due for such year to less than the amount described in paragraph (d) of subdivision one of section two hundred ten of this article. If the amount of the credit allowable under this subdivision for any taxable year exceeds the taxpayer's tax for such year, fifty percent of the excess shall be treated as an overpayment of tax to be credited or refunded as provided in section six hundred eighty-six of this chapter, provided, however, that no interest shall be paid thereon. The balance of such credit not credited or refunded in such taxable year may be carried over to the immediately succeeding taxable year and may be deducted from the taxpayer's tax for such year. The excess, if any, of the amount of the credit over the tax

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for such succeeding year shall be treated as an overpayment of tax to be credited or refunded as provided in section six hundred eighty-six of this chapter, provided, however, that no interest shall be paid thereon.

§ 6. The tax law is amended by adding two new sections 187-q and 187-r to read as follows:

§ 187-q. 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, and one hundred eighty-four of this article. Such credit, to be computed as hereinafter provided, shall be allowed for fuel flexible and hybrid vehicles 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. Fuel flexible and hybrid vehicles. The credit under this subdivision for fuel flexible and qualified hybrid vehicles shall equal five hundred dollars per vehicle registered in this state.

3. Definitions. (a) The term "fuel flexible vehicle" means a vehicle, which is equipped to use alternative fuel as defined in subdivision eleven of section three hundred fifty-one of the public authorities law.

(b) The term "qualified hybrid vehicle" shall have the same meaning as provided for in subparagraph (B) of paragraph three of subsection (p-1) of section six hundred six of this chapter.