S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   5919
 
                        2023-2024 Regular Sessions
 
                           I N  A S S E M B L Y
 
                              March 24, 2023
                                ___________
 
 Introduced  by  M. of A. BARRETT, LUPARDO, THIELE, FAHY -- read once and
   referred to the Committee on Agriculture
 
 AN ACT to amend the agriculture and markets law, the  tax  law  and  the
   environmental  conservation  law,  in  relation to enacting the carbon
   farming act

   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section  1.  This  act  shall be known and may be cited as the "carbon
 farming act".
   § 2. Legislative intent. The legislature  hereby  finds  and  declares
 that  soil  and vegetation management can significantly enhance soil and
 carbon sequestration, resulting in a wide  range  of  environmental  and
 agricultural  benefits  to  New  York  farmers and residents, including:
 increased yields; soil health; improved water quality; and reductions in
 greenhouse gases. The legislature further declares that enhancing carbon
 sequestration, the long term storage of carbon in plants, soils, geolog-
 ic formations and the ocean, through farming is in the best interest  of
 New  Yorkers.  It  is  therefore  the  intent of the legislature and the
 purpose of this act to encourage farmers to further sequester and  miti-
 gate carbon in this state by establishing a carbon farming tax credit to
 reward  and incentivize farmers to maintain or adopt practices that help
 maximize New York's carbon sequestration potential.
   § 3. Section 150 of the agriculture and  markets  law  is  amended  by
 adding a new subdivision 5 to read as follows:
   5.  "CARBON  FARMING"  MEANS  THE  IMPLEMENTATION OF A LAND MANAGEMENT
 STRATEGY FOR THE PURPOSES  OF  REDUCING,  SEQUESTERING,  AND  MITIGATING
 GREENHOUSE GAS EMISSIONS ON LAND USED IN SUPPORT OF A FARM OPERATION AND
 QUANTIFYING  THOSE  GREENHOUSE  GAS  BENEFITS  USING  THE  UNITED STATES
 DEPARTMENT OF AGRICULTURE'S COMET-PLANNER, COMET-FARM, AND OTHER QUANTI-
 FICATION TOOLS.

  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD01378-02-3
 A. 5919                             2
              

 
   § 4. Section 210-B of the tax law is amended by adding a new  subdivi-
 sion 59 to read as follows:
   59. CARBON FARMING CREDIT. (A) ALLOWANCE OF CREDIT. A TAXPAYER THAT IS
 AN  AGRICULTURAL BUSINESS THAT PRODUCES FARM PRODUCTS SHALL BE ALLOWED A
 CREDIT AGAINST THE TAX IMPOSED BY  THIS  ARTICLE  FOR  THE  PRACTICE  OF
 CARBON FARMING.
   (B)  DEFINITIONS.  FOR  PURPOSES  OF  THIS SECTION THE FOLLOWING TERMS
 SHALL HAVE THE FOLLOWING MEANINGS:
   (I) "CARBON FARMING" SHALL HAVE THE  SAME  MEANING  AS  SET  FORTH  IN
 SUBDIVISION  FIVE  OF  SECTION  ONE HUNDRED FIFTY OF THE AGRICULTURE AND
 MARKETS LAW;
   (II) "FARM PRODUCTS" SHALL HAVE THE  SAME  MEANING  AS  SET  FORTH  IN
 SUBDIVISION FIVE OF SECTION TWO OF THE AGRICULTURE AND MARKETS LAW; AND
   (III)  "CARBON  SEQUESTRATION"  SHALL  MEAN  THE  LONG TERM STORAGE OF
 CARBON IN PLANTS AND SOILS.
   (C) SUCH CREDIT SHALL BE CALCULATED BASED ON  THE  ECONOMIC  VALUE  OF
 CARBON  FARMING  AS  DETERMINED  BY  THE  COMMISSIONER  OF ENVIRONMENTAL
 CONSERVATION, IN CONSULTATION WITH THE COMMISSIONER OF  AGRICULTURE  AND
 MARKETS  AND  THE  COMMISSIONER PURSUANT TO PARAGRAPH CCC OF SUBDIVISION
 TWO OF SECTION 3-0301 OF THE ENVIRONMENTAL CONSERVATION LAW.
   (D) THE TAXPAYER SHALL ATTACH TO ITS TAX RETURN ITS FINAL  CERTIFICATE
 OF  ELIGIBILITY ISSUED BY THE COMMISSIONER OF ENVIRONMENTAL CONSERVATION
 PURSUANT TO SECTION 19-0309 OF THE ENVIRONMENTAL CONSERVATION LAW. IN NO
 EVENT SHALL THE TAXPAYER BE ALLOWED A CREDIT GREATER THAN THE AMOUNT  OF
 THE  CREDIT  LISTED  ON  THE  FINAL  CERTIFICATE VERIFYING THE EMISSIONS
 REDUCTIONS TO BE CREDITED TO THE TAXPAYER.
   (E) IF THE AMOUNT OF THE CREDIT ALLOWABLE UNDER THIS SUBDIVISION SHALL
 EXCEED THE TAXPAYER'S TAX FOR SUCH YEAR  AND  THE  TAXPAYER'S  NEW  YORK
 ADJUSTED  GROSS  INCOME  FOR  SUCH  YEAR  DOES NOT EXCEED SIXTY THOUSAND
 DOLLARS, 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, THAT  NO INTEREST
 SHALL BE PAID THEREON. IF THE TAXPAYER'S NEW YORK ADJUSTED GROSS  INCOME
 FOR  SUCH  YEAR EXCEEDS SIXTY THOUSAND DOLLARS, THE EXCESS CREDIT MAY BE
 CARRIED OVER TO THE FOLLOWING YEAR OR YEARS AND MAY BE DEDUCTED FROM THE
 TAXPAYER'S TAX FOR SUCH YEAR OR YEARS.
   § 5. Section 606 of the tax law is amended by adding a new  subsection
 (ooo) to read as follows:
   (OOO)  CARBON  FARMING CREDIT. (1) ALLOWANCE OF CREDIT. A TAXPAYER WHO
 PROVIDES FARM PRODUCTS AND WHO PRACTICES CARBON FARMING SHALL BE ALLOWED
 A CREDIT AGAINST THE TAX IMPOSED BY THIS ARTICLE.
   (2) DEFINITIONS. FOR THE PURPOSES OF THIS  SUBSECTION,  THE  FOLLOWING
 DEFINITIONS SHALL APPLY:
   (A) "FARM PRODUCTS" SHALL HAVE THE SAME MEANING AS SET FORTH IN SUBDI-
 VISION FIVE OF SECTION TWO OF THE AGRICULTURE AND MARKETS LAW.
   (B)  "CARBON  FARMING"  SHALL  HAVE  THE  SAME MEANING AS SET FORTH IN
 SUBDIVISION FIVE OF SECTION ONE HUNDRED FIFTY  OF  THE  AGRICULTURE  AND
 MARKETS LAW.
   (3)  APPLICATION  OF  CREDIT. SUCH CREDIT SHALL BE CALCULATED BASED ON
 THE ECONOMIC VALUE OF CARBON FARMING AS DETERMINED BY  THE  COMMISSIONER
 OF  ENVIRONMENTAL CONSERVATION, IN CONSULTATION WITH THE COMMISSIONER OF
 AGRICULTURE AND MARKETS PURSUANT TO PARAGRAPH CCC OF SUBDIVISION TWO  OF
 SECTION 3-0301 OF THE ENVIRONMENTAL CONSERVATION LAW.
   (4)  CERTIFICATION  REQUIRED.  THE  TAXPAYER  SHALL  ATTACH TO ITS TAX
 RETURN ITS FINAL CERTIFICATE OF ELIGIBILITY ISSUED BY  THE  COMMISSIONER
 OF  ENVIRONMENTAL  CONSERVATION PURSUANT TO SECTION 19-0309 OF THE ENVI-
 A. 5919                             3
 
 RONMENTAL CONSERVATION LAW. IN NO EVENT SHALL THE TAXPAYER BE ALLOWED  A
 CREDIT GREATER THAN THE AMOUNT OF THE CREDIT LISTED ON THE FINAL CERTIF-
 ICATE VERIFYING THE EMISSIONS REDUCTIONS TO BE CREDITED TO THE TAXPAYER.
   (5)  CARRYOVER  OF CREDIT. IF THE AMOUNT OF THE CREDIT ALLOWABLE UNDER
 THIS SUBSECTION SHALL EXCEED THE TAXPAYER'S TAX FOR SUCH  YEAR  AND  THE
 TAXPAYER'S  NEW YORK ADJUSTED GROSS INCOME FOR SUCH YEAR DOES NOT EXCEED
 SIXTY THOUSAND DOLLARS, 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. IF THE TAXPAYER'S  NEW  YORK
 ADJUSTED  GROSS  INCOME FOR SUCH  YEAR  EXCEEDS  SIXTY THOUSAND DOLLARS,
 THE EXCESS CREDIT MAY BE CARRIED OVER TO THE FOLLOWING YEAR    OR  YEARS
 AND MAY BE DEDUCTED FROM THE TAXPAYER'S TAX FOR SUCH YEAR OR YEARS.
   § 6. Subdivision 2 of section 3-0301 of the environmental conservation
 law is amended by adding a new paragraph ccc to read as follows:
   CCC.  COOPERATE  WITH  THE  DEPARTMENT  OF  AGRICULTURE AND MARKETS TO
 DEVELOP EDUCATIONAL MATERIALS TO PROMOTE AND ENCOURAGE  CARBON  FARMING.
 SUCH  MATERIALS  SHALL PROMOTE FARMING PRACTICES WHICH REDUCE, SEQUESTER
 AND MITIGATE GREENHOUSE GAS  EMISSIONS  THROUGH  THE  IMPLEMENTATION  OF
 CARBON  FARMING  STRATEGIES AND ON LAND USED IN SUPPORT OF A FARM OPERA-
 TION; AND DEVELOP AND CODIFY A METRIC TO QUANTIFY THE STORAGE OF  CARBON
 USING  THE  UNITED  STATES  DEPARTMENT  OF  AGRICULTURE'S COMET-PLANNER,
 COMET-FARM, AND OTHER QUANTIFICATION TOOLS. THE DEPARTMENT SHALL DEVELOP
 AND DISTRIBUTE AN APPLICATION AND CERTIFICATION PROCEDURE WHICH VERIFIES
 THE CARBON STORED TO BE  CREDITED  TO  EACH  FARM.  THE  DEPARTMENT  MAY
 PROMULGATE RULES AND REGULATIONS NECESSARY TO IMPLEMENT THIS SECTION.
   §  7.  Subdivision 1 of section 19-0309 of the environmental conserva-
 tion law, as amended by chapter 817 of the laws of 1987, is  amended  to
 read as follows:
   1.  For the purposes of sections 208, 210, 606 and 612 of the Tax Law,
 the commissioner or his designated representative is  hereby  authorized
 to  issue  certificates  of  compliance concerning air pollution control
 facilities [and], air pollution controlled process facilities AND CARBON
 FARMING as defined in such law. No  such  certificate  shall  be  issued
 unless  the  facility  to  which  it is applicable is in compliance with
 applicable provisions of titles 1 to 11,  inclusive,  and  title  19  of
 article  17,  article  19, and title 1 of article 27 of this chapter; of
 the Public Health Law; of the state sanitary code and of  codes,  rules,
 regulations, permits or orders issued pursuant thereto.
   §  8.  Section  16  of  the  agriculture and markets law is amended by
 adding a new subdivision 53 to read as follows:
   53. COOPERATE WITH THE DEPARTMENT  OF  ENVIRONMENTAL  CONSERVATION  TO
 DEVELOP    EDUCATIONAL  MATERIALS TO ENCOURAGE CARBON FARMING AND HOW TO
 USE THE UNITED STATES DEPARTMENT OF AGRICULTURE'S COMET-PLANNER,  COMET-
 FARM,  AND OTHER CARBON QUANTIFICATION TOOLS.  THE PROGRAM SHALL PROMOTE
 FARMING PRACTICES WHICH REDUCE, SEQUESTER AND  MITIGATE  GREENHOUSE  GAS
 EMISSIONS  ON  LAND USED IN SUPPORT OF A FARM OPERATION.  THE DEPARTMENT
 SHALL PROMOTE THE CARBON FARMING TAX CREDIT  PROVIDED  IN  SECTIONS  TWO
 HUNDRED TEN-B AND SIX HUNDRED SIX OF THE TAX LAW.
   §  9.  This  act shall take effect on the ninetieth day after it shall
 have become a  law.  Effective  immediately,  the  addition,  amendment,
 and/or repeal of any rule or regulation necessary for the implementation
 of  this  act  on  its  effective  date  are  authorized  to be made and
 completed on or before such effective date.