S T A T E   O F   N E W   Y O R K
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                                  4270--A
     Cal. No. 355
 
                        2023-2024 Regular Sessions
 
                             I N  S E N A T E
 
                             February 7, 2023
                                ___________
 
 Introduced by Sens. PARKER, MAY, ROLISON, WEBB -- read twice and ordered
   printed, and when printed to be committed to the Committee on Agricul-
   ture  --  reported  favorably from said committee and committed to the
   Committee on Rules -- reported favorably from said committee,  ordered
   to  a  third  reading, passed by Senate and delivered to the Assembly,
   recalled, vote reconsidered, restored to third  reading,  amended  and
   ordered reprinted, retaining its place in the order of third reading
 
 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
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
              

                                                            LBD01378-03-3
 S. 4270--A                          2
 
 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.
   §  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
 S. 4270--A                          3
 
 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-
 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,
 S. 4270--A                          4
 
 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.