S T A T E   O F   N E W   Y O R K
       ________________________________________________________________________
                                         6989
                              2013-2014 Regular Sessions
                                 I N  A S S E M B L Y
                                    April 29, 2013
                                      ___________
       Introduced  by  M.  of  A.  GABRYSZAK  --  read once and referred to the
         Committee on Ways and Means
       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, subdivision (a) as amended by section
    3  1  of part K of chapter 59 of the laws of 2012, is renumbered section 38
    4  and amended to read as follows:
    5    S 38. Biofuel production credit.  (a) General. A taxpayer  subject  to
    6  tax  under  article  nine, nine-A or twenty-two of this chapter shall be
    7  allowed a credit against such tax pursuant to the provisions  referenced
    8  in  subdivision  (d)  of  this section. The credit (or pro rata share of
    9  earned credit in the case of a partnership) for each  gallon  of  LIQUID
   10  biofuel produced at a biofuel plant on or after January first, two thou-
   11  sand  six shall equal fifteen cents per gallon, OR TWENTY-FIVE CENTS PER
   12  GALLON FOR PRODUCTION OF CELLULOSIC ETHANOL OR RENEWABLE FUEL OIL  after
   13  the production of the first forty thousand gallons per year presented to
   14  market.  THE  CREDIT FOR EACH BONE DRY TON OF DENSIFIED BIOFUEL PRODUCED
   15  AT A BIOFUEL PLANT ON OR AFTER JANUARY FIRST,  TWO  THOUSAND  SIX  SHALL
   16  EQUAL FIFTEEN DOLLARS PER BONE DRY TON AFTER THE PRODUCTION OF THE FIRST
   17  TEN  THOUSAND  TONS  PER YEAR PRESENTED TO MARKET. The credit under this
   18  section shall be capped at [two and one-half] TEN  million  dollars  per
   19  taxpayer  per taxable year for up to no more than [four] TEN consecutive
   20  taxable years per biofuel plant. If the taxpayer is a partner in a part-
   21  nership or shareholder of a New York S corporation, then the cap imposed
   22  by the preceding sentence shall be applied at the entity level, so  that
   23  the aggregate credit allowed to all the partners or shareholders of each
   24  such  entity  in the taxable year does not exceed [two and one-half] TEN
        EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                             [ ] is old law to be omitted.
                                                                  LBD10038-01-3
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    1  million dollars. The tax credit allowed pursuant to this  section  shall
    2  apply  to  taxable  years  beginning  before January first, two thousand
    3  twenty.
    4    (b)  Definitions. For the purpose of this section, the following terms
    5  shall have the following meanings:
    6    (1) "Biofuel" means a fuel which includes  biodiesel  [and],  ethanol,
    7  DENSIFIED  BIOFUEL  AND  RENEWABLE  FUEL OIL. The term "biodiesel" shall
    8  mean a fuel comprised exclusively of mono-alkyl  esters  of  long  chain
    9  fatty acids derived from vegetable oils or animal fats, designated B100,
   10  which  meets the specifications of American Society of Testing and Mate-
   11  rials designation D 6751-02. The term "ethanol" shall mean ethyl alcohol
   12  manufactured in the United States and its territories and sold  (i)  for
   13  fuel  use and which has been rendered unfit for beverage use in a manner
   14  and which is produced at a facility approved by the  federal  bureau  of
   15  alcohol, tobacco and firearms for the production of ethanol for fuel, or
   16  (ii)  as  denatured ethanol used by blenders and refiners which has been
   17  rendered unfit for beverage use.  The term "biofuel"  may  also  include
   18  any  other  standard  approved by the New York state energy and research
   19  development authority.  THE TERM "RENEWABLE FUEL OIL" SHALL MEAN A  FUEL
   20  COMPRISED  OF ANY NON-FOOD BIOMASS BASED FEEDSTOCK THAT CAN BE USED AS A
   21  FULL OR PARTIAL SUBSTITUTE FOR TRADITIONAL PETROLEUM FUELS.
   22    (2) "CELLULOSIC ETHANOL" MEANS THE PRODUCTION OF ETHANOL  FROM  LIGNO-
   23  CELLULOSIC  BIOMASS  FEEDSTOCKS  NOT USED FOR FOOD PRODUCTION, INCLUDING
   24  BY-PRODUCTS FROM AGRICULTURAL WASTE, THAT ARE ALTERED THROUGH ACTIVITIES
   25  REFERENCED IN SUBPARAGRAPH FIVE OF PARAGRAPH (B) OF SUBDIVISION  ONE  OF
   26  SECTION  THIRTY-ONE  HUNDRED  TWO-E  OF THE PUBLIC AUTHORITIES LAW. SUCH
   27  LIGNOCELLULOSIC BIOMASS FEEDSTOCKS MAY INCLUDE, BUT ARE NOT  NECESSARILY
   28  LIMITED  TO,  SWITCHGRASSES  OR WILLOWS, AGRICULTURAL AND FORESTRY RESI-
   29  DUES, CLEAN WOOD  AND  WOOD  WASTES,  PULP  AND  PAPER  MILL  WASTES  OR
   30  EXTRACTS,  AND  NON-RECYCLABLE  PAPER.  ANY  QUESTION  AS TO WHETHER ANY
   31  FEEDSTOCK QUALIFIES UNDER THIS SECTION SHALL BE DETERMINED BY THE PRESI-
   32  DENT OF THE NEW YORK STATE ENERGY AND RESEARCH DEVELOPMENT AUTHORITY.
   33    (3) "DENSIFIED BIOFUEL" MEANS A SOLID FUEL DERIVED BY  THE  MECHANICAL
   34  DENSIFICATION AND REFINING OF BIOMASS SOURCED FROM WOODY OR AGRICULTURAL
   35  FEEDSTOCKS.
   36    (4)  "Biofuel  plant"  means a commercial facility located in New York
   37  state at which one or more biofuels are produced.  FOR THE  PURPOSES  OF
   38  THIS  SECTION, ANY COMMERCIAL FACILITY WHERE CELLULOSIC ETHANOL, RENEWA-
   39  BLE FUEL OIL OR DENSIFIED BIOFUEL IS  PRODUCED  SHALL  BE  CONSIDERED  A
   40  SEPARATE BIOFUEL PLANT.
   41    (c) Reporting requirements. A taxpayer wishing to claim a credit under
   42  this section shall annually certify to the commissioner (i) that biofuel
   43  produced  at the eligible biofuel plant meets all existing standards for
   44  biofuel and (ii) the amount of biofuel produced at the eligible  biofuel
   45  plant during a taxable year.
   46    (d)  Cross-references.  For  application of the credit provided for in
   47  this section, see the following provisions of this chapter:
   48    (1) Article 9: Section 187-c.
   49    (2) Article 9-A: Section 210, subdivision 38.
   50    (3) Article 22: Section 606, subsections (i) and (jj).
   51    S 2. Section 187-c of the tax law, as amended by section 2 of  part  K
   52  of chapter 59 of the laws of 2012, is amended to read as follows:
   53    S  187-c.  Biofuel  production  credit.  A taxpayer shall be allowed a
   54  credit to be computed as provided in section [twenty-eight] THIRTY-EIGHT
   55  of this chapter, [as added by part X of chapter sixty-two of the laws of
   56  two thousand six,] against the tax imposed by  this  article.  Provided,
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    1  however,  that the amount of such credit allowed against the tax imposed
    2  by section one hundred eighty-four of this article shall be  the  excess
    3  of  the  amount  of such credit over the amount of any credit allowed by
    4  this section against the tax imposed by section one hundred eighty-three
    5  of  this  article.  In  no  event shall the credit under this section be
    6  allowed in an amount which will reduce the tax payable to less than  the
    7  applicable  minimum tax fixed by section one hundred eighty-three or one
    8  hundred eighty-five of this article. If,  however,  the  amount  of  the
    9  credit  allowed  under this section for any taxable year reduces the tax
   10  to such amount, the excess shall be treated as an overpayment of tax  to
   11  be credited or refunded in accordance with the provisions of section six
   12  hundred eighty-six of this chapter. Provided, however, the provisions of
   13  subsection  (c)  of  section  one  thousand eighty-eight of this chapter
   14  notwithstanding, no interest shall  be  paid  thereon.  The  tax  credit
   15  allowed  pursuant to this section shall apply to taxable years beginning
   16  before January first, two thousand twenty.
   17    S 3. Subdivision 38 of section 210 of  the  tax  law,  as  amended  by
   18  section  3  of  part  K of chapter 59 of the laws of 2012, is amended to
   19  read as follows:
   20    38. Biofuel production credit. A taxpayer shall be allowed  a  credit,
   21  to  be  computed  as  provided in section [twenty-eight] THIRTY-EIGHT of
   22  this chapter, [as added by part X of chapter sixty-two of  the  laws  of
   23  two  thousand  six,] against the tax imposed by this article. The credit
   24  allowed under this subdivision for any taxable year shall not reduce the
   25  tax due for such year to less than the higher of the amounts  prescribed
   26  in  paragraphs  (c) and (d) of subdivision one of this section. However,
   27  if the amount of credit allowed under this subdivision for  any  taxable
   28  year  reduces  the  tax  to  such  amount, any amount of credit thus not
   29  deductible in such taxable year shall be treated as  an  overpayment  of
   30  tax  to  be  credited  or  refunded in accordance with the provisions of
   31  section one thousand eighty-six of this chapter. Provided, however,  the
   32  provisions  of  subsection  (c)  of section one thousand eighty-eight of
   33  this chapter notwithstanding, no interest shall be paid thereon. The tax
   34  credit allowed pursuant to this section shall  apply  to  taxable  years
   35  beginning before January first, two thousand twenty.
   36    S  4.  Subsection  (jj)  of  section 606 of the tax law, as amended by
   37  section 4 of part K of chapter 59 of the laws of  2012,  is  amended  to
   38  read as follows:
   39    (jj)  Biofuel  production credit. A taxpayer shall be allowed a credit
   40  to be computed as provided in  section  [twenty-eight]  THIRTY-EIGHT  of
   41  this  chapter,  [as  added by part X of chapter sixty-two of the laws of
   42  two thousand six,] against the tax  imposed  by  this  article.  If  the
   43  amount  of the credit allowed under this subsection for any taxable year
   44  shall exceed the taxpayer's tax for  such  year,  the  excess  shall  be
   45  treated  as  an overpayment of tax to be credited or refunded in accord-
   46  ance with the provisions of section six hundred eighty-six of this arti-
   47  cle, provided, however, that no interest shall be paid thereon. The  tax
   48  credit  allowed  pursuant  to  this section shall apply to taxable years
   49  beginning before January first, two thousand twenty.
   50    S 5. This act shall take effect immediately.