S T A T E   O F   N E W   Y O R K
       ________________________________________________________________________
                                         4335
                              2013-2014 Regular Sessions
                                   I N  S E N A T E
                                    March 21, 2013
                                      ___________
       Introduced by Sen. YOUNG -- (at request of the Legislative Commission on
         Rural  Resources)  -- read twice and ordered printed, and when printed
         to be committed to the  Committee  on  Investigations  and  Government
         Operations
       AN  ACT  to  amend the tax law, in relation to biofuel production credit
         for production of cellulosic ethanol
         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 biofuel
   10  produced at a biofuel plant on or after January first, two thousand  six
   11  shall equal fifteen cents per gallon OR TWENTY-FIVE CENTS PER GALLON FOR
   12  PRODUCTION OF CELLULOSIC ETHANOL after the production of the first forty
   13  thousand  gallons  per  year  presented to market. The credit under this
   14  section shall be capped at two and one-half million dollars per taxpayer
   15  per taxable year for up to no more than four consecutive  taxable  years
   16  per  biofuel  plant.  If  the  taxpayer is a partner in a partnership or
   17  shareholder of a New York S corporation, then the  cap  imposed  by  the
   18  preceding  sentence  shall  be  applied at the entity level, so that the
   19  aggregate credit allowed to all the partners  or  shareholders  of  each
   20  such entity in the taxable year does not exceed two and one-half million
   21  dollars.  The tax credit allowed pursuant to this section shall apply to
   22  taxable years beginning before January first, two thousand twenty.
        EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                             [ ] is old law to be omitted.
                                                                  LBD07137-01-3
       S. 4335                             2
    1    (b) Definitions. For the purpose of this section, the following  terms
    2  shall have the following meanings:
    3    (1)  "Biofuel"  means a fuel which includes biodiesel and ethanol. The
    4  term "biodiesel" shall mean a fuel comprised exclusively  of  mono-alkyl
    5  esters  of  long chain fatty acids derived from vegetable oils or animal
    6  fats, designated B100, which meets the specifications of American Socie-
    7  ty of Testing and Materials designation D 6751-02.  The  term  "ethanol"
    8  shall  mean  ethyl  alcohol  manufactured  in  the United States and its
    9  territories and sold (i) for fuel use and which has been rendered  unfit
   10  for  beverage  use  in  a  manner  and  which  is produced at a facility
   11  approved by the federal bureau of alcohol, tobacco and firearms for  the
   12  production  of  ethanol  for  fuel, or (ii) as denatured ethanol used by
   13  blenders and refiners which has been rendered unfit  for  beverage  use.
   14  The  term  "biofuel" may also include any other standard approved by the
   15  New York state energy and research development authority.
   16    (2) "CELLULOSIC ETHANOL" MEANS THE PRODUCTION OF ETHANOL  FROM  LIGNO-
   17  CELLULOSIC  BIOMASS  FEEDSTOCKS  NOT  USED  FOR FOOD PRODUCTION THAT ARE
   18  ALTERED THROUGH ACTIVITIES REFERENCED IN SUBPARAGRAPH FIVE OF  PARAGRAPH
   19  (B) OF SUBDIVISION ONE OF SECTION THIRTY-ONE HUNDRED TWO-E OF THE PUBLIC
   20  AUTHORITIES  LAW.  SUCH  LIGNOCELLULOSIC BIOMASS FEEDSTOCKS MAY INCLUDE,
   21  BUT ARE NOT NECESSARILY LIMITED TO, SWITCHGRASSES OR  WILLOWS,  AGRICUL-
   22  TURAL  AND FORESTRY RESIDUES, CLEAN WOOD AND WOOD WASTES, PULP AND PAPER
   23  MILL WASTES OR EXTRACTS, AND NON-RECYCLABLE PAPER. ANY  QUESTION  AS  TO
   24  WHETHER ANY FEEDSTOCK QUALIFIES UNDER THIS PARAGRAPH SHALL BE DETERMINED
   25  BY  THE  PRESIDENT OF THE NEW YORK STATE ENERGY AND RESEARCH DEVELOPMENT
   26  AUTHORITY IN CONSULTATION WITH THE COMMISSIONER OF ENVIRONMENTAL CONSER-
   27  VATION AND THE COMMISSIONER OF AGRICULTURE AND MARKETS.
   28    (3) "Biofuel plant" means a commercial facility located  in  New  York
   29  state  at  which one or more biofuels are produced.  FOR THE PURPOSES OF
   30  THIS SECTION,  ANY  COMMERCIAL  FACILITY  WHERE  CELLULOSIC  ETHANOL  IS
   31  PRODUCED SHALL BE CONSIDERED A SEPARATE BIOFUEL PLANT.
   32    (c) Reporting requirements. A taxpayer wishing to claim a credit under
   33  this section shall annually certify to the commissioner (i) that biofuel
   34  produced  at the eligible biofuel plant meets all existing standards for
   35  biofuel and (ii) the amount of biofuel produced at the eligible  biofuel
   36  plant during a taxable year.
   37    (d)  Cross-references.  For  application of the credit provided for in
   38  this section, see the following provisions of this chapter:
   39    (1) Article 9: Section 187-c.
   40    (2) Article 9-A: Section 210, subdivision 38.
   41    (3) Article 22: Section 606, subsections (i) and (jj).
   42    S 2. Section 187-c of the tax law, as amended by section 2 of  part  K
   43  of chapter 59 of the laws of 2012, is amended to read as follows:
   44    S  187-c.  Biofuel  production  credit.  A taxpayer shall be allowed a
   45  credit to be computed as provided in section [twenty-eight] THIRTY-EIGHT
   46  of this chapter, [as added by part X of chapter sixty-two of the laws of
   47  two thousand six,] against the tax imposed by  this  article.  Provided,
   48  however,  that the amount of such credit allowed against the tax imposed
   49  by section one hundred eighty-four of this article shall be  the  excess
   50  of  the  amount  of such credit over the amount of any credit allowed by
   51  this section against the tax imposed by section one hundred eighty-three
   52  of this article. In no event shall the  credit  under  this  section  be
   53  allowed  in an amount which will reduce the tax payable to less than the
   54  applicable minimum tax fixed by section one hundred eighty-three or  one
   55  hundred  eighty-five  of  this  article.  If, however, the amount of the
   56  credit allowed under this section for any taxable year reduces  the  tax
       S. 4335                             3
    1  to  such amount, the excess shall be treated as an overpayment of tax to
    2  be credited or refunded in accordance with the provisions of section six
    3  hundred eighty-six of this chapter. Provided, however, the provisions of
    4  subsection  (c)  of  section  one  thousand eighty-eight of this chapter
    5  notwithstanding, no interest shall  be  paid  thereon.  The  tax  credit
    6  allowed  pursuant to this section shall apply to taxable years beginning
    7  before January first, two thousand twenty.
    8    S 3. Subdivision 38 of section 210 of  the  tax  law,  as  amended  by
    9  section  3  of  part  K of chapter 59 of the laws of 2012, is amended to
   10  read as follows:
   11    38. Biofuel production credit. A taxpayer shall be allowed  a  credit,
   12  to  be  computed  as  provided in section [twenty-eight] THIRTY-EIGHT 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. The credit
   15  allowed under this subdivision for any taxable year shall not reduce the
   16  tax due for such year to less than the higher of the amounts  prescribed
   17  in  paragraphs  (c) and (d) of subdivision one of this section. However,
   18  if the amount of credit allowed under this subdivision for  any  taxable
   19  year  reduces  the  tax  to  such  amount, any amount of credit thus not
   20  deductible in such taxable year shall be treated as  an  overpayment  of
   21  tax  to  be  credited  or  refunded in accordance with the provisions of
   22  section one thousand eighty-six of this chapter. Provided, however,  the
   23  provisions  of  subsection  (c)  of section one thousand eighty-eight of
   24  this chapter notwithstanding, no interest shall be paid thereon. The tax
   25  credit allowed pursuant to this section shall  apply  to  taxable  years
   26  beginning before January first, two thousand twenty.
   27    S  4.  Subsection  (jj)  of  section 606 of the tax law, as amended by
   28  section 4 of part K of chapter 59 of the laws of  2012,  is  amended  to
   29  read as follows:
   30    (jj)  Biofuel  production credit. A taxpayer shall be allowed a credit
   31  to be computed as provided in  section  [twenty-eight]  THIRTY-EIGHT  of
   32  this  chapter,  [as  added by part X of chapter sixty-two of the laws of
   33  two thousand six,] against the tax  imposed  by  this  article.  If  the
   34  amount  of the credit allowed under this subsection for any taxable year
   35  shall exceed the taxpayer's tax for  such  year,  the  excess  shall  be
   36  treated  as  an overpayment of tax to be credited or refunded in accord-
   37  ance with the provisions of section six hundred eighty-six of this arti-
   38  cle, provided, however, that no interest shall be paid thereon. The  tax
   39  credit  allowed  pursuant  to  this section shall apply to taxable years
   40  beginning before January first, two thousand twenty.
   41    S 5. This act shall take effect immediately.