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:

  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 biofuel
produced at a biofuel plant on or after January first, two thousand  six
shall equal fifteen cents per gallon OR TWENTY-FIVE CENTS PER GALLON FOR
PRODUCTION OF CELLULOSIC ETHANOL after the production of the first forty
thousand  gallons  per  year  presented to market. The credit under this
section shall be capped at two and one-half million dollars per taxpayer
per taxable year for up to no more than four consecutive  taxable  years
per  biofuel  plant.  If  the  taxpayer is a partner in a partnership 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 million
dollars.  The tax credit allowed pursuant to this section shall apply to
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

  (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. 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 Socie-
ty of Testing and Materials 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.
  (2) "CELLULOSIC ETHANOL" MEANS THE PRODUCTION OF ETHANOL  FROM  LIGNO-
CELLULOSIC  BIOMASS  FEEDSTOCKS  NOT  USED  FOR FOOD PRODUCTION 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,  AGRICUL-
TURAL  AND FORESTRY RESIDUES, 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 PARAGRAPH SHALL BE DETERMINED
BY  THE  PRESIDENT OF THE NEW YORK STATE ENERGY AND RESEARCH DEVELOPMENT
AUTHORITY IN CONSULTATION WITH THE COMMISSIONER OF ENVIRONMENTAL CONSER-
VATION AND THE COMMISSIONER OF AGRICULTURE AND MARKETS.
  (3) "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  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,
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

S. 4335                             3

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.