S T A T E   O F   N E W   Y O R K
       ________________________________________________________________________
                                         4563
                              2013-2014 Regular Sessions
                                   I N  S E N A T E
                                    April 10, 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 Energy and Telecommunications
       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
        EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                             [ ] is old law to be omitted.
                                                                  LBD10038-01-3
       S. 4563                             2
    1  such  entity  in the taxable year does not exceed [two and one-half] TEN
    2  million dollars. The tax credit allowed pursuant to this  section  shall
    3  apply  to  taxable  years  beginning  before January first, two thousand
    4  twenty.
    5    (b)  Definitions. For the purpose of this section, the following terms
    6  shall have the following meanings:
    7    (1) "Biofuel" means a fuel which includes  biodiesel  [and],  ethanol,
    8  DENSIFIED  BIOFUEL  AND  RENEWABLE  FUEL OIL. The term "biodiesel" shall
    9  mean a fuel comprised exclusively of mono-alkyl  esters  of  long  chain
   10  fatty acids derived from vegetable oils or animal fats, designated B100,
   11  which  meets the specifications of American Society of Testing and Mate-
   12  rials designation D 6751-02. The term "ethanol" shall mean ethyl alcohol
   13  manufactured in the United States and its territories and sold  (i)  for
   14  fuel  use and which has been rendered unfit for beverage use in a manner
   15  and which is produced at a facility approved by the  federal  bureau  of
   16  alcohol, tobacco and firearms for the production of ethanol for fuel, or
   17  (ii)  as  denatured ethanol used by blenders and refiners which has been
   18  rendered unfit for beverage use.  The term "biofuel"  may  also  include
   19  any  other  standard  approved by the New York state energy and research
   20  development authority.  THE TERM "RENEWABLE FUEL OIL" SHALL MEAN A  FUEL
   21  COMPRISED  OF ANY NON-FOOD BIOMASS BASED FEEDSTOCK THAT CAN BE USED AS A
   22  FULL OR PARTIAL SUBSTITUTE FOR TRADITIONAL PETROLEUM FUELS.
   23    (2) "CELLULOSIC ETHANOL" MEANS THE PRODUCTION OF ETHANOL  FROM  LIGNO-
   24  CELLULOSIC  BIOMASS  FEEDSTOCKS  NOT USED FOR FOOD PRODUCTION, INCLUDING
   25  BY-PRODUCTS 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 RESI-
   30  DUES, CLEAN WOOD  AND  WOOD  WASTES,  PULP  AND  PAPER  MILL  WASTES  OR
   31  EXTRACTS,  AND  NON-RECYCLABLE  PAPER.  ANY  QUESTION  AS TO WHETHER ANY
   32  FEEDSTOCK QUALIFIES UNDER THIS SECTION SHALL BE DETERMINED BY THE PRESI-
   33  DENT OF THE NEW YORK STATE ENERGY AND RESEARCH DEVELOPMENT AUTHORITY.
   34    (3) "DENSIFIED BIOFUEL" MEANS A SOLID FUEL DERIVED BY  THE  MECHANICAL
   35  DENSIFICATION AND REFINING OF BIOMASS SOURCED FROM WOODY OR AGRICULTURAL
   36  FEEDSTOCKS.
   37    (4)  "Biofuel  plant"  means a commercial facility located in New York
   38  state at which one or more biofuels are produced.  FOR THE  PURPOSES  OF
   39  THIS  SECTION, ANY COMMERCIAL FACILITY WHERE CELLULOSIC ETHANOL, RENEWA-
   40  BLE FUEL OIL OR DENSIFIED BIOFUEL IS  PRODUCED  SHALL  BE  CONSIDERED  A
   41  SEPARATE BIOFUEL PLANT.
   42    (c) Reporting requirements. A taxpayer wishing to claim a credit under
   43  this section shall annually certify to the commissioner (i) that biofuel
   44  produced  at the eligible biofuel plant meets all existing standards for
   45  biofuel and (ii) the amount of biofuel produced at the eligible  biofuel
   46  plant during a taxable year.
   47    (d)  Cross-references.  For  application of the credit provided for in
   48  this section, see the following provisions of this chapter:
   49    (1) Article 9: Section 187-c.
   50    (2) Article 9-A: Section 210, subdivision 38.
   51    (3) Article 22: Section 606, subsections (i) and (jj).
   52    S 2. Section 187-c of the tax law, as amended by section 2 of  part  K
   53  of chapter 59 of the laws of 2012, is amended to read as follows:
   54    S  187-c.  Biofuel  production  credit.  A taxpayer shall be allowed a
   55  credit to be computed as provided in section [twenty-eight] THIRTY-EIGHT
   56  of this chapter, [as added by part X of chapter sixty-two of the laws of
       S. 4563                             3
    1  two thousand six,] against the tax imposed by  this  article.  Provided,
    2  however,  that the amount of such credit allowed against the tax imposed
    3  by section one hundred eighty-four of this article shall be  the  excess
    4  of  the  amount  of such credit over the amount of any credit allowed by
    5  this section against the tax imposed by section one hundred eighty-three
    6  of this article. In no event shall the  credit  under  this  section  be
    7  allowed  in an amount which will reduce the tax payable to less than the
    8  applicable minimum tax fixed by section one hundred eighty-three or  one
    9  hundred  eighty-five  of  this  article.  If, however, the amount of the
   10  credit allowed under this section for any taxable year reduces  the  tax
   11  to  such amount, the excess shall be treated as an overpayment of tax to
   12  be credited or refunded in accordance with the provisions of section six
   13  hundred eighty-six of this chapter. Provided, however, the provisions of
   14  subsection (c) of section one  thousand  eighty-eight  of  this  chapter
   15  notwithstanding,  no  interest  shall  be  paid  thereon. The tax credit
   16  allowed pursuant to this section shall apply to taxable years  beginning
   17  before January first, two thousand twenty.
   18    S  3.  Subdivision  38  of  section  210 of the tax law, as amended by
   19  section 3 of part K of chapter 59 of the laws of  2012,  is  amended  to
   20  read as follows:
   21    38.  Biofuel  production credit. A taxpayer shall be allowed a credit,
   22  to be computed as provided in  section  [twenty-eight]  THIRTY-EIGHT  of
   23  this  chapter,  [as  added by part X of chapter sixty-two of the laws of
   24  two thousand six,] against the tax imposed by this article.  The  credit
   25  allowed under this subdivision for any taxable year shall not reduce the
   26  tax  due for such year to less than the higher of the amounts prescribed
   27  in paragraphs (c) and (d) of subdivision one of this  section.  However,
   28  if  the  amount of credit allowed under this subdivision for any taxable
   29  year reduces the tax to such amount,  any  amount  of  credit  thus  not
   30  deductible  in  such  taxable year shall be treated as an overpayment of
   31  tax to be credited or refunded in  accordance  with  the  provisions  of
   32  section  one thousand eighty-six of this chapter. Provided, however, the
   33  provisions of subsection (c) of section  one  thousand  eighty-eight  of
   34  this chapter notwithstanding, no interest shall be paid thereon. The tax
   35  credit  allowed  pursuant  to  this section shall apply to taxable years
   36  beginning before January first, two thousand twenty.
   37    S 4. Subsection (jj) of section 606 of the  tax  law,  as  amended  by
   38  section  4  of  part  K of chapter 59 of the laws of 2012, is amended to
   39  read as follows:
   40    (jj) Biofuel production credit. A taxpayer shall be allowed  a  credit
   41  to  be  computed  as  provided in section [twenty-eight] THIRTY-EIGHT of
   42  this chapter, [as added by part X of chapter sixty-two of  the  laws  of
   43  two  thousand  six,]  against  the  tax  imposed by this article. If the
   44  amount of the credit allowed under this subsection for any taxable  year
   45  shall  exceed  the  taxpayer's  tax  for  such year, the excess shall be
   46  treated as an overpayment of tax to be credited or refunded  in  accord-
   47  ance with the provisions of section six hundred eighty-six of this arti-
   48  cle,  provided, however, that no interest shall be paid thereon. The tax
   49  credit allowed pursuant to this section shall  apply  to  taxable  years
   50  beginning before January first, two thousand twenty.
   51    S 5. This act shall take effect immediately.