S T A T E   O F   N E W   Y O R K
       ________________________________________________________________________
                                         9525
                                 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
       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
   27  taxable year does not exceed [two and one-half] TEN million dollars. The
        EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                             [ ] is old law to be omitted.
                                                                  LBD10038-04-4
       A. 9525                             2
    1  tax credit allowed pursuant to this section shall apply to taxable years
    2  beginning before January first, two thousand twenty.
    3    (b)  Definitions. For the purpose of this section, the following terms
    4  shall have the following meanings:
    5    (1) "Biofuel" means a fuel which includes  biodiesel  [and],  ethanol,
    6  DENSIFIED  BIOFUEL  AND  RENEWABLE  FUEL OIL. The term "biodiesel" shall
    7  mean a fuel comprised exclusively of mono-alkyl  esters  of  long  chain
    8  fatty acids derived from vegetable oils or animal fats, designated B100,
    9  which  meets the specifications of American Society of Testing and Mate-
   10  rials designation D 6751-02. The term "ethanol" shall mean ethyl alcohol
   11  manufactured in the United States and its territories and sold  (i)  for
   12  fuel  use and which has been rendered unfit for beverage use in a manner
   13  and which is produced at a facility approved by the  federal  bureau  of
   14  alcohol, tobacco and firearms for the production of ethanol for fuel, or
   15  (ii)  as  denatured ethanol used by blenders and refiners which has been
   16  rendered unfit for beverage use.  The term "biofuel"  may  also  include
   17  any  other  standard  approved by the New York state energy and research
   18  development authority.  THE TERM "RENEWABLE FUEL OIL" SHALL MEAN A  FUEL
   19  COMPRISED  OF ANY NON-FOOD BIOMASS BASED FEEDSTOCK THAT CAN BE USED AS A
   20  FULL OR PARTIAL SUBSTITUTE FOR TRADITIONAL PETROLEUM FUELS.
   21    (2) "CELLULOSIC ETHANOL" MEANS THE PRODUCTION OF ETHANOL  FROM  LIGNO-
   22  CELLULOSIC  BIOMASS  FEEDSTOCKS  NOT USED FOR FOOD PRODUCTION, INCLUDING
   23  BY-PRODUCTS FROM AGRICULTURAL WASTE, THAT ARE ALTERED THROUGH ACTIVITIES
   24  REFERENCED IN SUBPARAGRAPH FIVE OF PARAGRAPH (B) OF SUBDIVISION  ONE  OF
   25  SECTION  THIRTY-ONE  HUNDRED  TWO-E  OF THE PUBLIC AUTHORITIES LAW. SUCH
   26  LIGNOCELLULOSIC BIOMASS FEEDSTOCKS MAY INCLUDE, BUT ARE NOT  NECESSARILY
   27  LIMITED  TO,  SWITCHGRASSES  OR WILLOWS, AGRICULTURAL AND FORESTRY RESI-
   28  DUES, CLEAN WOOD  AND  WOOD  WASTES,  PULP  AND  PAPER  MILL  WASTES  OR
   29  EXTRACTS,  AND  NON-RECYCLABLE  PAPER.  ANY  QUESTION  AS TO WHETHER ANY
   30  FEEDSTOCK QUALIFIES UNDER THIS SECTION SHALL BE DETERMINED BY THE PRESI-
   31  DENT OF THE NEW YORK STATE ENERGY AND RESEARCH DEVELOPMENT AUTHORITY.
   32    (3) "DENSIFIED BIOFUEL" MEANS A SOLID FUEL DERIVED BY  THE  MECHANICAL
   33  DENSIFICATION AND REFINING OF BIOMASS SOURCED FROM WOODY OR AGRICULTURAL
   34  FEEDSTOCKS.
   35    (4)  "Biofuel  plant"  means a commercial facility located in New York
   36  state at which one or more biofuels are produced.  FOR THE  PURPOSES  OF
   37  THIS  SECTION, ANY COMMERCIAL FACILITY WHERE CELLULOSIC ETHANOL, RENEWA-
   38  BLE FUEL OIL OR DENSIFIED BIOFUEL IS  PRODUCED  SHALL  BE  CONSIDERED  A
   39  SEPARATE BIOFUEL PLANT.
   40    S  3.  Section 187-c of the tax law, as amended by section 2 of part K
   41  of chapter 59 of the laws of 2012, is amended to read as follows:
   42    S 187-c. Biofuel production credit. A  taxpayer  shall  be  allowed  a
   43  credit to be computed as provided in section [twenty-eight] FORTY-TWO of
   44  this  chapter,  [as  added by part X of chapter sixty-two of the laws of
   45  two thousand six,] against the tax imposed by  this  article.  Provided,
   46  however,  that the amount of such credit allowed against the tax imposed
   47  by section one hundred eighty-four of this article shall be  the  excess
   48  of  the  amount  of such credit over the amount of any credit allowed by
   49  this section against the tax imposed by section one hundred eighty-three
   50  of this article. In no event shall the  credit  under  this  section  be
   51  allowed  in an amount which will reduce the tax payable to less than the
   52  applicable minimum tax fixed by section one hundred eighty-three or  one
   53  hundred  eighty-five  of  this  article.  If, however, the amount of the
   54  credit allowed under this section for any taxable year reduces  the  tax
   55  to  such amount, the excess shall be treated as an overpayment of tax to
   56  be credited or refunded in accordance with the provisions of section six
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    1  hundred eighty-six of this chapter. Provided, however, the provisions of
    2  subsection (c) of section one  thousand  eighty-eight  of  this  chapter
    3  notwithstanding,  no  interest  shall  be  paid  thereon. The tax credit
    4  allowed  pursuant to this section shall apply to taxable years beginning
    5  before January first, two thousand twenty.
    6    S 4. Section 187-c of the tax law, as amended by section 15 of part  S
    7  of chapter 59 of the laws of 2014, is amended to read as follows:
    8    S  187-c.  Biofuel  production  credit.  A taxpayer shall be allowed a
    9  credit to be computed as provided in section [twenty-eight] FORTY-TWO of
   10  this chapter, [as added by part X of chapter sixty-two of  the  laws  of
   11  two  thousand  six,]  against the tax imposed by this article. Provided,
   12  however, that the amount of such credit allowed against the tax  imposed
   13  by  section  one hundred eighty-four of this article shall be the excess
   14  of the amount of such credit over the amount of any  credit  allowed  by
   15  this section against the tax imposed by section one hundred eighty-three
   16  of  this  article.  In  no  event shall the credit under this section be
   17  allowed in an amount which will reduce the tax payable to less than  the
   18  applicable minimum tax fixed by section one hundred eighty-three of this
   19  article.  If,  however,  the  amount  of  the  credit allowed under this
   20  section for any taxable year reduces the tax to such amount, the  excess
   21  shall  be treated as an overpayment of tax to be credited or refunded in
   22  accordance with the provisions of section six hundred eighty-six of this
   23  chapter. Provided, however, the provisions of subsection (c) of  section
   24  one  thousand  eighty-eight of this chapter notwithstanding, no interest
   25  shall be paid thereon. The tax credit allowed pursuant to  this  section
   26  shall  apply  to taxable years beginning before January first, two thou-
   27  sand twenty.
   28    S 5. Subdivision 38 of section 210 of  the  tax  law,  as  amended  by
   29  section  3  of  part  K of chapter 59 of the laws of 2012, is amended to
   30  read as follows:
   31    38. Biofuel production credit. A taxpayer shall be allowed  a  credit,
   32  to  be  computed as provided in section [twenty-eight] FORTY-TWO of this
   33  chapter, [as added by part X of chapter sixty-two of  the  laws  of  two
   34  thousand  six,]  against  the  tax  imposed  by this article. The credit
   35  allowed under this subdivision for any taxable year shall not reduce the
   36  tax due for such year to less than the higher of the amounts  prescribed
   37  in  paragraphs  (c) and (d) of subdivision one of this section. However,
   38  if the amount of credit allowed under this subdivision for  any  taxable
   39  year  reduces  the  tax  to  such  amount, any amount of credit thus not
   40  deductible in such taxable year shall be treated as  an  overpayment  of
   41  tax  to  be  credited  or  refunded in accordance with the provisions of
   42  section one thousand eighty-six of this chapter. Provided, however,  the
   43  provisions  of  subsection  (c)  of section one thousand eighty-eight of
   44  this chapter notwithstanding, no interest shall be paid thereon. The tax
   45  credit allowed pursuant to this section shall  apply  to  taxable  years
   46  beginning before January first, two thousand twenty.
   47    S  6.  Subdivision  24  of  section  210-b of the tax law, as added by
   48  section 17 of part A of chapter 59 of the laws of 2014,  is  amended  to
   49  read as follows:
   50    24.  Biofuel  production  credit.  [(a)  General.] A taxpayer shall be
   51  allowed a credit, to be computed as provided in  section  [twenty-eight]
   52  FORTY-TWO  of  this chapter [added as part X of chapter sixty-two of the
   53  laws of two thousand six], against the tax imposed by this article.  The
   54  credit  allowed  under  this  subdivision for any taxable year shall not
   55  reduce the tax due for such year to less than the fixed  dollar  minimum
   56  amount  prescribed  in  paragraph  (d) of subdivision one of section two
       A. 9525                             4
    1  hundred ten of this article.  However, if the amount of  credit  allowed
    2  under  this  subdivision  for  any  taxable year reduces the tax to such
    3  amount or if the taxpayer otherwise pays tax based on the  fixed  dollar
    4  minimum amount, any amount of credit thus not deductible in such taxable
    5  year  shall  be  treated  as  an  overpayment  of  tax to be credited or
    6  refunded in accordance with  the  provisions  of  section  one  thousand
    7  eighty-six  of  this  chapter.  Provided,  however,  the  provisions  of
    8  subsection (c) of section one  thousand  eighty-eight  of  this  chapter
    9  notwithstanding,  no  interest  shall  be  paid  thereon. The tax credit
   10  allowed pursuant to this section shall apply to taxable years  beginning
   11  before January first, two thousand twenty.
   12    S  7.  Subsection  (jj)  of  section 606 of the tax law, as amended by
   13  section 4 of part K of chapter 59 of the laws of  2012,  is  amended  to
   14  read as follows:
   15    (jj)  Biofuel  production credit. A taxpayer shall be allowed a credit
   16  to be computed as provided in section [twenty-eight] FORTY-TWO  of  this
   17  chapter,  [as  added  by  part X of chapter sixty-two of the laws of two
   18  thousand six,] against the tax imposed by this article. If the amount of
   19  the credit allowed under this subsection  for  any  taxable  year  shall
   20  exceed  the taxpayer's tax for such year, the excess shall be treated as
   21  an overpayment of tax to be credited or refunded in accordance with  the
   22  provisions  of section six hundred eighty-six of this article, provided,
   23  however, that no interest shall be paid thereon. The tax credit  allowed
   24  pursuant  to  this section shall apply to taxable years beginning before
   25  January first, two thousand twenty.
   26    S 8. This act shall take effect immediately, except that section  four
   27  of this act shall take effect on the same date and in the same manner as
   28  section  15  of  part  S of chapter 59 of the laws of 2014 takes effect;
   29  section six of this act shall take effect on the same date  and  in  the
   30  same  manner  as  section 17 of part A of chapter 59 of the laws of 2014
   31  takes effect; and provided, however, that the amendments to  subdivision
   32  38 of section 210 of the tax law made by section five of this act, shall
   33  not  affect  the repeal of such subdivision and shall be deemed repealed
   34  therewith.