S T A T E   O F   N E W   Y O R K
       ________________________________________________________________________
                                        4563--A
                              2013-2014 Regular Sessions
                                   I N  S E N A T E
                                    April 10, 2013
                                      ___________
       Introduced  by  Sens.  YOUNG,  GIPSON,  O'MARA,  RITCHIE, VALESKY -- (at
         request of the Legislative Commission  on  Rural  Resources)  --  read
         twice  and  ordered  printed,  and when printed to be committed to the
         Committee on Energy  and  Telecommunications  --  recommitted  to  the
         Committee  on  Energy and Telecommunications in accordance with Senate
         Rule 6, sec. 8 -- reported favorably from said committee and committed
         to the Committee on Finance --  committee  discharged,  bill  amended,
         ordered reprinted as amended and recommitted to said committee
       AN ACT to amend the tax law, in relation to the biofuel production cred-
         it  for  the  production  of cellulosic ethanol, densified biofuel and
         renewable fuel oil
         THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
       BLY, DO ENACT AS FOLLOWS:
    1    Section  1. Section 28 of the tax law, as added by section 1 of part X
    2  of chapter 62 of the laws of 2006, is renumbered section 42.
    3    S 2. Subdivisions (a) and (b) of section 42 of the tax  law,  subdivi-
    4  sion  (a) as amended by section 1 of part K of chapter 59 of the laws of
    5  2012 and subdivision (b) as added by section 1 of part X of  chapter  62
    6  of  the  laws of 2006, such section as renumbered by section one of this
    7  act, are amended to read as follows:
    8    (a) General. A taxpayer subject to tax under article nine,  nine-A  or
    9  twenty-two  of  this  chapter shall be allowed a credit against such tax
   10  pursuant to  the  provisions  referenced  in  subdivision  (d)  of  this
   11  section. The credit (or pro rata share of earned credit in the case of a
   12  partnership)  for  each  gallon  of LIQUID biofuel produced at a biofuel
   13  plant on or after January first, two thousand six  shall  equal  fifteen
   14  cents  per  gallon,  OR  TWENTY-FIVE  CENTS PER GALLON FOR PRODUCTION OF
   15  CELLULOSIC ETHANOL OR RENEWABLE FUEL OIL after  the  production  of  the
   16  first  forty  thousand  gallons per year presented to market. THE CREDIT
   17  FOR EACH BONE DRY TON OF DENSIFIED BIOFUEL PRODUCED AT A  BIOFUEL  PLANT
   18  ON  OR AFTER JANUARY FIRST, TWO THOUSAND SIX SHALL EQUAL FIFTEEN DOLLARS
        EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                             [ ] is old law to be omitted.
                                                                  LBD10038-05-4
       S. 4563--A                          2
    1  PER BONE DRY TON AFTER THE PRODUCTION OF THE FIRST TEN THOUSAND TONS PER
    2  YEAR PRESENTED TO MARKET. The credit under this section shall be  capped
    3  at  [two and one-half] TEN million dollars per taxpayer per taxable year
    4  for  up to no more than [four] TEN consecutive taxable years per biofuel
    5  plant. If the taxpayer is a partner in a partnership or shareholder of a
    6  New York S corporation, then the cap imposed by the  preceding  sentence
    7  shall  be  applied  at  the  entity  level, so that the aggregate credit
    8  allowed to all the partners or shareholders of each such entity  in  the
    9  taxable year does not exceed [two and one-half] TEN million dollars. The
   10  tax credit allowed pursuant to this section shall apply to taxable years
   11  beginning before January first, two thousand twenty.
   12    (b)  Definitions. For the purpose of this section, the following terms
   13  shall have the following meanings:
   14    (1) "Biofuel" means a fuel which includes  biodiesel  [and],  ethanol,
   15  DENSIFIED  BIOFUEL  AND  RENEWABLE  FUEL OIL. The term "biodiesel" shall
   16  mean a fuel comprised exclusively of mono-alkyl  esters  of  long  chain
   17  fatty acids derived from vegetable oils or animal fats, designated B100,
   18  which  meets the specifications of American Society of Testing and Mate-
   19  rials designation D 6751-02. The term "ethanol" shall mean ethyl alcohol
   20  manufactured in the United States and its territories and sold  (i)  for
   21  fuel  use and which has been rendered unfit for beverage use in a manner
   22  and which is produced at a facility approved by the  federal  bureau  of
   23  alcohol, tobacco and firearms for the production of ethanol for fuel, or
   24  (ii)  as  denatured ethanol used by blenders and refiners which has been
   25  rendered unfit for beverage use.  The term "biofuel"  may  also  include
   26  any  other  standard  approved by the New York state energy and research
   27  development authority.  THE TERM "RENEWABLE FUEL OIL" SHALL MEAN A  FUEL
   28  COMPRISED  OF ANY NON-FOOD BIOMASS BASED FEEDSTOCK THAT CAN BE USED AS A
   29  FULL OR PARTIAL SUBSTITUTE FOR TRADITIONAL PETROLEUM FUELS.
   30    (2) "CELLULOSIC ETHANOL" MEANS THE PRODUCTION OF ETHANOL  FROM  LIGNO-
   31  CELLULOSIC  BIOMASS  FEEDSTOCKS  NOT USED FOR FOOD PRODUCTION, INCLUDING
   32  BY-PRODUCTS FROM AGRICULTURAL WASTE, THAT ARE ALTERED THROUGH ACTIVITIES
   33  REFERENCED IN SUBPARAGRAPH FIVE OF PARAGRAPH (B) OF SUBDIVISION  ONE  OF
   34  SECTION  THIRTY-ONE  HUNDRED  TWO-E  OF THE PUBLIC AUTHORITIES LAW. SUCH
   35  LIGNOCELLULOSIC BIOMASS FEEDSTOCKS MAY INCLUDE, BUT ARE NOT  NECESSARILY
   36  LIMITED  TO,  SWITCHGRASSES  OR WILLOWS, AGRICULTURAL AND FORESTRY RESI-
   37  DUES, CLEAN WOOD  AND  WOOD  WASTES,  PULP  AND  PAPER  MILL  WASTES  OR
   38  EXTRACTS,  AND  NON-RECYCLABLE  PAPER.  ANY  QUESTION  AS TO WHETHER ANY
   39  FEEDSTOCK QUALIFIES UNDER THIS SECTION SHALL BE DETERMINED BY THE PRESI-
   40  DENT OF THE NEW YORK STATE ENERGY AND RESEARCH DEVELOPMENT AUTHORITY.
   41    (3) "DENSIFIED BIOFUEL" MEANS A SOLID FUEL DERIVED BY  THE  MECHANICAL
   42  DENSIFICATION AND REFINING OF BIOMASS SOURCED FROM WOODY OR AGRICULTURAL
   43  FEEDSTOCKS.
   44    (4)  "Biofuel  plant"  means a commercial facility located in New York
   45  state at which one or more biofuels are produced.  FOR THE  PURPOSES  OF
   46  THIS  SECTION, ANY COMMERCIAL FACILITY WHERE CELLULOSIC ETHANOL, RENEWA-
   47  BLE FUEL OIL OR DENSIFIED BIOFUEL IS  PRODUCED  SHALL  BE  CONSIDERED  A
   48  SEPARATE BIOFUEL PLANT.
   49    S  3.  Section 187-c of the tax law, as amended by section 2 of part K
   50  of chapter 59 of the laws of 2012, is amended to read as follows:
   51    S 187-c. Biofuel production credit. A  taxpayer  shall  be  allowed  a
   52  credit to be computed as provided in section [twenty-eight] FORTY-TWO of
   53  this  chapter,  [as  added by part X of chapter sixty-two of the laws of
   54  two thousand six,] against the tax imposed by  this  article.  Provided,
   55  however,  that the amount of such credit allowed against the tax imposed
   56  by section one hundred eighty-four of this article shall be  the  excess
       S. 4563--A                          3
    1  of  the  amount  of such credit over the amount of any credit allowed by
    2  this section against the tax imposed by section one hundred eighty-three
    3  of this article. In no event shall the  credit  under  this  section  be
    4  allowed  in an amount which will reduce the tax payable to less than the
    5  applicable minimum tax fixed by section one hundred eighty-three or  one
    6  hundred  eighty-five  of  this  article.  If, however, the amount of the
    7  credit allowed under this section for any taxable year reduces  the  tax
    8  to  such amount, the excess shall be treated as an overpayment of tax to
    9  be credited or refunded in accordance with the provisions of section six
   10  hundred eighty-six of this chapter. Provided, however, the provisions of
   11  subsection (c) of section one  thousand  eighty-eight  of  this  chapter
   12  notwithstanding,  no  interest  shall  be  paid  thereon. The tax credit
   13  allowed pursuant to this section shall apply to taxable years  beginning
   14  before January first, two thousand twenty.
   15    S  4. Section 187-c of the tax law, as amended by section 15 of part S
   16  of chapter 59 of the laws of 2014, is amended to read as follows:
   17    S 187-c. Biofuel production credit. A  taxpayer  shall  be  allowed  a
   18  credit to be computed as provided in section [twenty-eight] FORTY-TWO of
   19  this  chapter,  [as  added by part X of chapter sixty-two of the laws of
   20  two thousand six,] against the tax imposed by  this  article.  Provided,
   21  however,  that the amount of such credit allowed against the tax imposed
   22  by section one hundred eighty-four of this article shall be  the  excess
   23  of  the  amount  of such credit over the amount of any credit allowed by
   24  this section against the tax imposed by section one hundred eighty-three
   25  of this article. In no event shall the  credit  under  this  section  be
   26  allowed  in an amount which will reduce the tax payable to less than the
   27  applicable minimum tax fixed by section one hundred eighty-three of this
   28  article. If, however, the  amount  of  the  credit  allowed  under  this
   29  section  for any taxable year reduces the tax to such amount, the excess
   30  shall be treated as an overpayment of tax to be credited or refunded  in
   31  accordance with the provisions of section six hundred eighty-six of this
   32  chapter.  Provided, however, the provisions of subsection (c) of section
   33  one thousand eighty-eight of this chapter notwithstanding,  no  interest
   34  shall  be  paid thereon. The tax credit allowed pursuant to this section
   35  shall apply to taxable years beginning before January first,  two  thou-
   36  sand twenty.
   37    S  5.  Subdivision  38  of  section  210 of the tax law, as amended by
   38  section 3 of part K of chapter 59 of the laws of  2012,  is  amended  to
   39  read as follows:
   40    38.  Biofuel  production credit. A taxpayer shall be allowed a credit,
   41  to be computed as provided in section [twenty-eight] FORTY-TWO  of  this
   42  chapter,  [as  added  by  part X of chapter sixty-two of the laws of two
   43  thousand six,] against the tax  imposed  by  this  article.  The  credit
   44  allowed under this subdivision for any taxable year shall not reduce the
   45  tax  due for such year to less than the higher of the amounts prescribed
   46  in paragraphs (c) and (d) of subdivision one of this  section.  However,
   47  if  the  amount of credit allowed under this subdivision for any taxable
   48  year reduces the tax to such amount,  any  amount  of  credit  thus  not
   49  deductible  in  such  taxable year shall be treated as an overpayment of
   50  tax to be credited or refunded in  accordance  with  the  provisions  of
   51  section  one thousand eighty-six of this chapter. Provided, however, the
   52  provisions of subsection (c) of section  one  thousand  eighty-eight  of
   53  this chapter notwithstanding, no interest shall be paid thereon. The tax
   54  credit  allowed  pursuant  to  this section shall apply to taxable years
   55  beginning before January first, two thousand twenty.
       S. 4563--A                          4
    1    S 6. Subdivision 24 of section 210-b of  the  tax  law,  as  added  by
    2  section  17  of  part A of chapter 59 of the laws of 2014, is amended to
    3  read as follows:
    4    24.  Biofuel  production  credit.  [(a)  General.] A taxpayer shall be
    5  allowed a credit, to be computed as provided in  section  [twenty-eight]
    6  FORTY-TWO  of  this chapter [added as part X of chapter sixty-two of the
    7  laws of two thousand six], against the tax imposed by this article.  The
    8  credit  allowed  under  this  subdivision for any taxable year shall not
    9  reduce the tax due for such year to less than the fixed  dollar  minimum
   10  amount  prescribed  in  paragraph  (d) of subdivision one of section two
   11  hundred ten of this article.  However, if the amount of  credit  allowed
   12  under  this  subdivision  for  any  taxable year reduces the tax to such
   13  amount or if the taxpayer otherwise pays tax based on the  fixed  dollar
   14  minimum amount, any amount of credit thus not deductible in such taxable
   15  year  shall  be  treated  as  an  overpayment  of  tax to be credited or
   16  refunded in accordance with  the  provisions  of  section  one  thousand
   17  eighty-six  of  this  chapter.  Provided,  however,  the  provisions  of
   18  subsection (c) of section one  thousand  eighty-eight  of  this  chapter
   19  notwithstanding,  no  interest  shall  be  paid  thereon. The tax credit
   20  allowed pursuant to this section shall apply to taxable years  beginning
   21  before January first, two thousand twenty.
   22    S  7.  Subsection  (jj)  of  section 606 of the tax law, as amended by
   23  section 4 of part K of chapter 59 of the laws of  2012,  is  amended  to
   24  read as follows:
   25    (jj)  Biofuel  production credit. A taxpayer shall be allowed a credit
   26  to be computed as provided in section [twenty-eight] FORTY-TWO  of  this
   27  chapter,  [as  added  by  part X of chapter sixty-two of the laws of two
   28  thousand six,] against the tax imposed by this article. If the amount of
   29  the credit allowed under this subsection  for  any  taxable  year  shall
   30  exceed  the taxpayer's tax for such year, the excess shall be treated as
   31  an overpayment of tax to be credited or refunded in accordance with  the
   32  provisions  of section six hundred eighty-six of this article, provided,
   33  however, that no interest shall be paid thereon. The tax credit  allowed
   34  pursuant  to  this section shall apply to taxable years beginning before
   35  January first, two thousand twenty.
   36    S 8. This act shall take effect immediately, except that section  four
   37  of this act shall take effect on the same date and in the same manner as
   38  section  15  of  part  S of chapter 59 of the laws of 2014 takes effect;
   39  section six of this act shall take effect on the same date  and  in  the
   40  same  manner  as  section 17 of part A of chapter 59 of the laws of 2014
   41  takes effect; and provided, however, that the amendments to  subdivision
   42  38 of section 210 of the tax law made by section five of this act, shall
   43  not  affect  the repeal of such subdivision and shall be deemed repealed
   44  therewith.