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:

  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

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD10038-01-3
              

S. 4563                             2

such  entity  in the taxable year does not exceed [two and one-half] TEN
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

S. 4563                             3

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
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.

                            
                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                 4563--A

                       2013-2014 Regular Sessions

                            I N  S E N A T E

                             April 10, 2013
                               ___________

Introduced  by  Sens.  YOUNG,  GIPSON,  O'MARA,  RITCHIE, VALESKY -- (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  --  recommitted  to  the
  Committee  on  Energy and Telecommunications in accordance with Senate
  Rule 6, sec. 8 -- reported favorably from said committee and committed
  to the Committee on Finance --  committee  discharged,  bill  amended,
  ordered reprinted as amended and recommitted to said committee

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, is renumbered section 42.
  S 2. Subdivisions (a) and (b) of section 42 of the tax  law,  subdivi-
sion  (a) as amended by section 1 of part K of chapter 59 of the laws of
2012 and subdivision (b) as added by section 1 of part X of  chapter  62
of  the  laws of 2006, such section as renumbered by section one of this
act, are amended to read as follows:
  (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 thousand 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

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD10038-05-4
              

S. 4563--A                          2

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 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] TEN 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.
  S  3.  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] FORTY-TWO 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

S. 4563--A                          3

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  4. Section 187-c of the tax law, as amended by section 15 of part S
of chapter 59 of the laws of 2014, 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] FORTY-TWO 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 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  thou-
sand twenty.
  S  5.  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] FORTY-TWO  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. 4563--A                          4

  S 6. Subdivision 24 of section 210-b of  the  tax  law,  as  added  by
section  17  of  part A of chapter 59 of the laws of 2014, is amended to
read as follows:
  24.  Biofuel  production  credit.  [(a)  General.] A taxpayer shall be
allowed a credit, to be computed as provided in  section  [twenty-eight]
FORTY-TWO  of  this chapter [added as 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 fixed  dollar  minimum
amount  prescribed  in  paragraph  (d) of subdivision one of section two
hundred ten of this article.  However, if the amount of  credit  allowed
under  this  subdivision  for  any  taxable year reduces the tax to such
amount or if the taxpayer otherwise pays tax based on the  fixed  dollar
minimum 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  7.  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] FORTY-TWO  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 accordance with  the
provisions  of section six hundred eighty-six of this article, 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 8. This act shall take effect immediately, except that section  four
of this act shall take effect on the same date and in the same manner as
section  15  of  part  S of chapter 59 of the laws of 2014 takes effect;
section six of this act shall take effect on the same date  and  in  the
same  manner  as  section 17 of part A of chapter 59 of the laws of 2014
takes effect; and provided, however, that the amendments to  subdivision
38 of section 210 of the tax law made by section five of this act, shall
not  affect  the repeal of such subdivision and shall be deemed repealed
therewith.