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:

  Section 1. Section 28 of the tax law, as added by section 1 of part  X
of chapter 62 of the laws of 2006, subdivision (a) as amended by section
1  of part K of chapter 59 of the laws of 2012, is renumbered section 38
and amended to read as follows:
  S 38. Biofuel production credit.  (a) General. A taxpayer  subject  to
tax  under  article  nine, nine-A or twenty-two of this chapter shall be
allowed a credit against such tax pursuant to the provisions  referenced
in  subdivision  (d)  of  this section. The credit (or pro rata share of
earned credit in the case of a partnership) for each  gallon  of  LIQUID
biofuel produced at a biofuel plant on or after January first, two thou-
sand  six shall equal fifteen cents per gallon, OR TWENTY-FIVE CENTS PER
GALLON FOR PRODUCTION OF CELLULOSIC ETHANOL OR RENEWABLE FUEL OIL  after
the production of the first forty thousand gallons per year presented to
market.  THE  CREDIT FOR EACH BONE DRY TON OF DENSIFIED BIOFUEL PRODUCED
AT A BIOFUEL PLANT ON OR AFTER JANUARY FIRST,  TWO  THOUSAND  SIX  SHALL
EQUAL FIFTEEN DOLLARS PER BONE DRY TON AFTER THE PRODUCTION OF THE FIRST
TEN  THOUSAND  TONS  PER YEAR PRESENTED TO MARKET. The credit under this
section shall be capped at [two and one-half] TEN  million  dollars  per
taxpayer  per taxable year for up to no more than [four] TEN consecutive
taxable years per biofuel plant. If the taxpayer is a partner in a part-
nership or shareholder of a New York S corporation, then the cap imposed
by the preceding sentence shall be applied at the entity level, so  that
the aggregate credit allowed to all the partners or shareholders of each
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
              

A. 6989                             2

million dollars. The tax credit allowed pursuant to this  section  shall
apply  to  taxable  years  beginning  before January first, two thousand
twenty.
  (b)  Definitions. For the purpose of this section, the following terms
shall have the following meanings:
  (1) "Biofuel" means a fuel which includes  biodiesel  [and],  ethanol,
DENSIFIED  BIOFUEL  AND  RENEWABLE  FUEL OIL. The term "biodiesel" shall
mean a fuel comprised exclusively of mono-alkyl  esters  of  long  chain
fatty acids derived from vegetable oils or animal fats, designated B100,
which  meets the specifications of American Society of Testing and Mate-
rials designation D 6751-02. The term "ethanol" shall mean ethyl alcohol
manufactured in the United States and its territories and sold  (i)  for
fuel  use and which has been rendered unfit for beverage use in a manner
and which is produced at a facility approved by the  federal  bureau  of
alcohol, tobacco and firearms for the production of ethanol for fuel, or
(ii)  as  denatured ethanol used by blenders and refiners which has been
rendered unfit for beverage use.  The term "biofuel"  may  also  include
any  other  standard  approved by the New York state energy and research
development authority.  THE TERM "RENEWABLE FUEL OIL" SHALL MEAN A  FUEL
COMPRISED  OF ANY NON-FOOD BIOMASS BASED FEEDSTOCK THAT CAN BE USED AS A
FULL OR PARTIAL SUBSTITUTE FOR TRADITIONAL PETROLEUM FUELS.
  (2) "CELLULOSIC ETHANOL" MEANS THE PRODUCTION OF ETHANOL  FROM  LIGNO-
CELLULOSIC  BIOMASS  FEEDSTOCKS  NOT USED FOR FOOD PRODUCTION, INCLUDING
BY-PRODUCTS FROM AGRICULTURAL WASTE, THAT ARE ALTERED THROUGH ACTIVITIES
REFERENCED IN SUBPARAGRAPH FIVE OF PARAGRAPH (B) OF SUBDIVISION  ONE  OF
SECTION  THIRTY-ONE  HUNDRED  TWO-E  OF THE PUBLIC AUTHORITIES LAW. SUCH
LIGNOCELLULOSIC BIOMASS FEEDSTOCKS MAY INCLUDE, BUT ARE NOT  NECESSARILY
LIMITED  TO,  SWITCHGRASSES  OR WILLOWS, AGRICULTURAL AND FORESTRY RESI-
DUES, CLEAN WOOD  AND  WOOD  WASTES,  PULP  AND  PAPER  MILL  WASTES  OR
EXTRACTS,  AND  NON-RECYCLABLE  PAPER.  ANY  QUESTION  AS TO WHETHER ANY
FEEDSTOCK QUALIFIES UNDER THIS SECTION SHALL BE DETERMINED BY THE PRESI-
DENT OF THE NEW YORK STATE ENERGY AND RESEARCH DEVELOPMENT AUTHORITY.
  (3) "DENSIFIED BIOFUEL" MEANS A SOLID FUEL DERIVED BY  THE  MECHANICAL
DENSIFICATION AND REFINING OF BIOMASS SOURCED FROM WOODY OR AGRICULTURAL
FEEDSTOCKS.
  (4)  "Biofuel  plant"  means a commercial facility located in New York
state at which one or more biofuels are produced.  FOR THE  PURPOSES  OF
THIS  SECTION, ANY COMMERCIAL FACILITY WHERE CELLULOSIC ETHANOL, RENEWA-
BLE FUEL OIL OR DENSIFIED BIOFUEL IS  PRODUCED  SHALL  BE  CONSIDERED  A
SEPARATE BIOFUEL PLANT.
  (c) Reporting requirements. A taxpayer wishing to claim a credit under
this section shall annually certify to the commissioner (i) that biofuel
produced  at the eligible biofuel plant meets all existing standards for
biofuel and (ii) the amount of biofuel produced at the eligible  biofuel
plant during a taxable year.
  (d)  Cross-references.  For  application of the credit provided for in
this section, see the following provisions of this chapter:
  (1) Article 9: Section 187-c.
  (2) Article 9-A: Section 210, subdivision 38.
  (3) Article 22: Section 606, subsections (i) and (jj).
  S 2. Section 187-c of the tax law, as amended by section 2 of  part  K
of chapter 59 of the laws of 2012, is amended to read as follows:
  S  187-c.  Biofuel  production  credit.  A taxpayer shall be allowed a
credit to be computed as provided in section [twenty-eight] THIRTY-EIGHT
of this chapter, [as added by part X of chapter sixty-two of the laws of
two thousand six,] against the tax imposed by  this  article.  Provided,

A. 6989                             3

however,  that the amount of such credit allowed against the tax imposed
by section one hundred eighty-four of this article shall be  the  excess
of  the  amount  of such credit over the amount of any credit allowed by
this section against the tax imposed by section one hundred eighty-three
of  this  article.  In  no  event shall the credit under this section be
allowed in an amount which will reduce the tax payable to less than  the
applicable  minimum tax fixed by section one hundred eighty-three or one
hundred eighty-five of this article. If,  however,  the  amount  of  the
credit  allowed  under this section for any taxable year reduces the tax
to such amount, the excess shall be treated as an overpayment of tax  to
be credited or refunded in accordance with the provisions of section six
hundred eighty-six of this chapter. Provided, however, the provisions of
subsection  (c)  of  section  one  thousand eighty-eight of this chapter
notwithstanding, no interest shall  be  paid  thereon.  The  tax  credit
allowed  pursuant to this section shall apply to taxable years beginning
before January first, two thousand twenty.
  S 3. Subdivision 38 of section 210 of  the  tax  law,  as  amended  by
section  3  of  part  K of chapter 59 of the laws of 2012, is amended to
read as follows:
  38. Biofuel production credit. A taxpayer shall be allowed  a  credit,
to  be  computed  as  provided in section [twenty-eight] THIRTY-EIGHT of
this chapter, [as added by part X of chapter sixty-two of  the  laws  of
two  thousand  six,] against the tax imposed by this article. The credit
allowed under this subdivision for any taxable year shall not reduce the
tax due for such year to less than the higher of the amounts  prescribed
in  paragraphs  (c) and (d) of subdivision one of this section. However,
if the amount of credit allowed under this subdivision for  any  taxable
year  reduces  the  tax  to  such  amount, any amount of credit thus not
deductible in such taxable year shall be treated as  an  overpayment  of
tax  to  be  credited  or  refunded in accordance with the provisions of
section one thousand eighty-six of this chapter. Provided, however,  the
provisions  of  subsection  (c)  of section one thousand eighty-eight of
this chapter notwithstanding, no interest shall be paid thereon. The tax
credit allowed pursuant to this section shall  apply  to  taxable  years
beginning before January first, two thousand twenty.
  S  4.  Subsection  (jj)  of  section 606 of the tax law, as amended by
section 4 of part K of chapter 59 of the laws of  2012,  is  amended  to
read as follows:
  (jj)  Biofuel  production credit. A taxpayer shall be allowed a credit
to be computed as provided in  section  [twenty-eight]  THIRTY-EIGHT  of
this  chapter,  [as  added by part X of chapter sixty-two of the laws of
two thousand six,] against the tax  imposed  by  this  article.  If  the
amount  of the credit allowed under this subsection for any taxable year
shall exceed the taxpayer's tax for  such  year,  the  excess  shall  be
treated  as  an overpayment of tax to be credited or refunded in accord-
ance with the provisions of section six hundred eighty-six of this arti-
cle, provided, however, that no interest shall be paid thereon. The  tax
credit  allowed  pursuant  to  this section shall apply to taxable years
beginning before January first, two thousand twenty.
  S 5. This act shall take effect immediately.