S T A T E   O F   N E W   Y O R K
       ________________________________________________________________________
                                        9525--A
                                 I N  A S S E M B L Y
                                      May 6, 2014
                                      ___________
       Introduced  by M. of A. RUSSELL -- read once and referred to the Commit-
         tee on Ways and Means -- 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
   19  PER BONE DRY TON AFTER THE PRODUCTION OF THE FIRST TEN THOUSAND TONS PER
   20  YEAR PRESENTED TO MARKET. The credit under this section shall be  capped
   21  at  [two and one-half] TEN million dollars per taxpayer per taxable year
   22  for up to no more than [four] TEN consecutive taxable years per  biofuel
   23  plant. If the taxpayer is a partner in a partnership or shareholder of a
   24  New  York  S corporation, then the cap imposed by the preceding sentence
   25  shall be applied at the entity  level,  so  that  the  aggregate  credit
   26  allowed  to  all the partners or shareholders of each such entity in the
        EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                             [ ] is old law to be omitted.
                                                                  LBD10038-07-4
       A. 9525--A                          2
    1  taxable year does not exceed [two and one-half] TEN million dollars. The
    2  tax credit allowed pursuant to this section shall apply to taxable years
    3  beginning before January first, two thousand 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, INCLUDING CELLULOSIC COMPONENTS OF SEPA-
   24  RATED FOOD WASTE AS DEFINED IN TABLE 1 OF C.F.R. S 80.1426  AND  BY-PRO-
   25  DUCTS  FROM  AGRICULTURAL  WASTE,  THAT  ARE  ALTERED THROUGH ACTIVITIES
   26  REFERENCED IN SUBPARAGRAPH FIVE OF PARAGRAPH (B) OF SUBDIVISION  ONE  OF
   27  SECTION  THIRTY-ONE  HUNDRED  TWO-E  OF THE PUBLIC AUTHORITIES LAW. SUCH
   28  LIGNOCELLULOSIC BIOMASS FEEDSTOCKS MAY INCLUDE, BUT ARE NOT  NECESSARILY
   29  LIMITED TO, SWITCHGRASSES OR WILLOWS, AGRICULTURAL AND FORESTRY RESIDUES
   30  AS  DEFINED IN TABLE 1 OF C.F.R.  S 80.1426, CLEAN WOOD AND WOOD WASTES,
   31  PULP AND PAPER MILL WASTES OR EXTRACTS, AND  NON-RECYCLABLE  PAPER.  ANY
   32  QUESTION  AS TO WHETHER ANY FEEDSTOCK QUALIFIES UNDER THIS SECTION SHALL
   33  BE DETERMINED BY THE PRESIDENT OF THE NEW YORK STATE ENERGY AND RESEARCH
   34  DEVELOPMENT AUTHORITY.
   35    (3) "DENSIFIED BIOFUEL" MEANS A SOLID FUEL DERIVED BY  THE  MECHANICAL
   36  DENSIFICATION AND REFINING OF BIOMASS SOURCED FROM WOODY OR AGRICULTURAL
   37  FEEDSTOCKS.
   38    (4)  "Biofuel  plant"  means a commercial facility located in New York
   39  state at which one or more biofuels are produced.  FOR THE  PURPOSES  OF
   40  THIS  SECTION, ANY COMMERCIAL FACILITY WHERE CELLULOSIC ETHANOL, RENEWA-
   41  BLE FUEL OIL OR DENSIFIED BIOFUEL IS  PRODUCED  SHALL  BE  CONSIDERED  A
   42  SEPARATE BIOFUEL PLANT.
   43    S  3.  Section 187-c of the tax law, as amended by section 2 of part K
   44  of chapter 59 of the laws of 2012, is amended to read as follows:
   45    S 187-c. Biofuel production credit. A  taxpayer  shall  be  allowed  a
   46  credit to be computed as provided in section [twenty-eight] FORTY-TWO of
   47  this  chapter,  [as  added by part X of chapter sixty-two of the laws of
   48  two thousand six,] against the tax imposed by  this  article.  Provided,
   49  however,  that the amount of such credit allowed against the tax imposed
   50  by section one hundred eighty-four of this article shall be  the  excess
   51  of  the  amount  of such credit over the amount of any credit allowed by
   52  this section against the tax imposed by section one hundred eighty-three
   53  of this article. In no event shall the  credit  under  this  section  be
   54  allowed  in an amount which will reduce the tax payable to less than the
   55  applicable minimum tax fixed by section one hundred eighty-three or  one
   56  hundred  eighty-five  of  this  article.  If, however, the amount of the
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    1  credit allowed under this section for any taxable year reduces  the  tax
    2  to  such amount, the excess shall be treated as an overpayment of tax to
    3  be credited or refunded in accordance with the provisions of section six
    4  hundred eighty-six of this chapter. Provided, however, the provisions of
    5  subsection  (c)  of  section  one  thousand eighty-eight of this chapter
    6  notwithstanding, no interest shall  be  paid  thereon.  The  tax  credit
    7  allowed  pursuant to this section shall apply to taxable years beginning
    8  before January first, two thousand twenty.
    9    S 4. Section 187-c of the tax law, as amended by section 15 of part  S
   10  of chapter 59 of the laws of 2014, is amended to read as follows:
   11    S  187-c.  Biofuel  production  credit.  A taxpayer shall be allowed a
   12  credit to be computed as provided in section [twenty-eight] FORTY-TWO of
   13  this chapter, [as added by part X of chapter sixty-two of  the  laws  of
   14  two  thousand  six,]  against the tax imposed by this article. Provided,
   15  however, that the amount of such credit allowed against the tax  imposed
   16  by  section  one hundred eighty-four of this article shall be the excess
   17  of the amount of such credit over the amount of any  credit  allowed  by
   18  this section against the tax imposed by section one hundred eighty-three
   19  of  this  article.  In  no  event shall the credit under this section be
   20  allowed in an amount which will reduce the tax payable to less than  the
   21  applicable minimum tax fixed by section one hundred eighty-three of this
   22  article.  If,  however,  the  amount  of  the  credit allowed under this
   23  section for any taxable year reduces the tax to such amount, the  excess
   24  shall  be treated as an overpayment of tax to be credited or refunded in
   25  accordance with the provisions of section six hundred eighty-six of this
   26  chapter. Provided, however, the provisions of subsection (c) of  section
   27  one  thousand  eighty-eight of this chapter notwithstanding, no interest
   28  shall be paid thereon. The tax credit allowed pursuant to  this  section
   29  shall  apply  to taxable years beginning before January first, two thou-
   30  sand twenty.
   31    S 5. Subdivision 38 of section 210 of  the  tax  law,  as  amended  by
   32  section  3  of  part  K of chapter 59 of the laws of 2012, is amended to
   33  read as follows:
   34    38. Biofuel production credit. A taxpayer shall be allowed  a  credit,
   35  to  be  computed as provided in section [twenty-eight] FORTY-TWO of this
   36  chapter, [as added by part X of chapter sixty-two of  the  laws  of  two
   37  thousand  six,]  against  the  tax  imposed  by this article. The credit
   38  allowed under this subdivision for any taxable year shall not reduce the
   39  tax due for such year to less than the higher of the amounts  prescribed
   40  in  paragraphs  (c) and (d) of subdivision one of this section. However,
   41  if the amount of credit allowed under this subdivision for  any  taxable
   42  year  reduces  the  tax  to  such  amount, any amount of credit thus not
   43  deductible in such taxable year shall be treated as  an  overpayment  of
   44  tax  to  be  credited  or  refunded in accordance with the provisions of
   45  section one thousand eighty-six of this chapter. Provided, however,  the
   46  provisions  of  subsection  (c)  of section one thousand eighty-eight of
   47  this chapter notwithstanding, 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  6.  Subdivision  24  of  section  210-b of the tax law, as added by
   51  section 17 of part A of chapter 59 of the laws of 2014,  is  amended  to
   52  read as follows:
   53    24.  Biofuel  production  credit.  [(a)  General.] A taxpayer shall be
   54  allowed a credit, to be computed as provided in  section  [twenty-eight]
   55  FORTY-TWO  of  this chapter [added as part X of chapter sixty-two of the
   56  laws of two thousand six], against the tax imposed by this article.  The
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    1  credit  allowed  under  this  subdivision for any taxable year shall not
    2  reduce the tax due for such year to less than the fixed  dollar  minimum
    3  amount  prescribed  in  paragraph  (d) of subdivision one of section two
    4  hundred  ten  of this article.  However, if the amount of credit allowed
    5  under this subdivision for any taxable year  reduces  the  tax  to  such
    6  amount  or  if the taxpayer otherwise pays tax based on the fixed dollar
    7  minimum amount, any amount of credit thus not deductible in such taxable
    8  year shall be treated as  an  overpayment  of  tax  to  be  credited  or
    9  refunded  in  accordance  with  the  provisions  of section one thousand
   10  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 7. Subsection (jj) of section 606 of the  tax  law,  as  amended  by
   16  section  4  of  part  K of chapter 59 of the laws of 2012, is amended to
   17  read as follows:
   18    (jj) Biofuel production credit. A taxpayer shall be allowed  a  credit
   19  to  be  computed as provided in section [twenty-eight] FORTY-TWO of this
   20  chapter, [as added by part X of chapter sixty-two of  the  laws  of  two
   21  thousand six,] against the tax imposed by this article. If the amount of
   22  the  credit  allowed  under  this  subsection for any taxable year shall
   23  exceed the taxpayer's tax for such year, the excess shall be treated  as
   24  an  overpayment of tax to be credited or refunded in accordance with the
   25  provisions of section six hundred eighty-six of this article,  provided,
   26  however,  that no interest shall be paid thereon. The tax credit allowed
   27  pursuant to this section shall apply to taxable years  beginning  before
   28  January first, two thousand twenty.
   29    S  8. This act shall take effect immediately, except that section four
   30  of this act shall take effect on the same date and in the same manner as
   31  section 15 of part S of chapter 59 of the laws  of  2014  takes  effect;
   32  section  six  of  this act shall take effect on the same date and in the
   33  same manner as section 17 of part A of chapter 59 of the  laws  of  2014
   34  takes  effect; and provided, however, that the amendments to subdivision
   35  38 of section 210 of the tax law made by section five of this act, shall
   36  not affect the repeal of such subdivision and shall be  deemed  repealed
   37  therewith.