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: 1 Section 1. Section 28 of the tax law, as added by section 1 of part X 2 of chapter 62 of the laws of 2006, subdivision (a) as amended by section 3 1 of part K of chapter 59 of the laws of 2012, is renumbered section 38 4 and amended to read as follows: 5 S 38. Biofuel production credit. (a) General. A taxpayer subject to 6 tax under article nine, nine-A or twenty-two of this chapter shall be 7 allowed a credit against such tax pursuant to the provisions referenced 8 in subdivision (d) of this section. The credit (or pro rata share of 9 earned credit in the case of a partnership) for each gallon of LIQUID 10 biofuel produced at a biofuel plant on or after January first, two thou- 11 sand six shall equal fifteen cents per gallon, OR TWENTY-FIVE CENTS PER 12 GALLON FOR PRODUCTION OF CELLULOSIC ETHANOL OR RENEWABLE FUEL OIL after 13 the production of the first forty thousand gallons per year presented to 14 market. THE CREDIT FOR EACH BONE DRY TON OF DENSIFIED BIOFUEL PRODUCED 15 AT A BIOFUEL PLANT ON OR AFTER JANUARY FIRST, TWO THOUSAND SIX SHALL 16 EQUAL FIFTEEN DOLLARS PER BONE DRY TON AFTER THE PRODUCTION OF THE FIRST 17 TEN THOUSAND TONS PER YEAR PRESENTED TO MARKET. The credit under this 18 section shall be capped at [two and one-half] TEN million dollars per 19 taxpayer per taxable year for up to no more than [four] TEN consecutive 20 taxable years per biofuel plant. If the taxpayer is a partner in a part- 21 nership or shareholder of a New York S corporation, then the cap imposed 22 by the preceding sentence shall be applied at the entity level, so that 23 the aggregate credit allowed to all the partners or shareholders of each 24 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 1 million dollars. The tax credit allowed pursuant to this section shall 2 apply to taxable years beginning before January first, two thousand 3 twenty. 4 (b) Definitions. For the purpose of this section, the following terms 5 shall have the following meanings: 6 (1) "Biofuel" means a fuel which includes biodiesel [and], ethanol, 7 DENSIFIED BIOFUEL AND RENEWABLE FUEL OIL. The term "biodiesel" shall 8 mean a fuel comprised exclusively of mono-alkyl esters of long chain 9 fatty acids derived from vegetable oils or animal fats, designated B100, 10 which meets the specifications of American Society of Testing and Mate- 11 rials designation D 6751-02. The term "ethanol" shall mean ethyl alcohol 12 manufactured in the United States and its territories and sold (i) for 13 fuel use and which has been rendered unfit for beverage use in a manner 14 and which is produced at a facility approved by the federal bureau of 15 alcohol, tobacco and firearms for the production of ethanol for fuel, or 16 (ii) as denatured ethanol used by blenders and refiners which has been 17 rendered unfit for beverage use. The term "biofuel" may also include 18 any other standard approved by the New York state energy and research 19 development authority. THE TERM "RENEWABLE FUEL OIL" SHALL MEAN A FUEL 20 COMPRISED OF ANY NON-FOOD BIOMASS BASED FEEDSTOCK THAT CAN BE USED AS A 21 FULL OR PARTIAL SUBSTITUTE FOR TRADITIONAL PETROLEUM FUELS. 22 (2) "CELLULOSIC ETHANOL" MEANS THE PRODUCTION OF ETHANOL FROM LIGNO- 23 CELLULOSIC BIOMASS FEEDSTOCKS NOT USED FOR FOOD PRODUCTION, INCLUDING 24 BY-PRODUCTS FROM AGRICULTURAL WASTE, THAT ARE ALTERED THROUGH ACTIVITIES 25 REFERENCED IN SUBPARAGRAPH FIVE OF PARAGRAPH (B) OF SUBDIVISION ONE OF 26 SECTION THIRTY-ONE HUNDRED TWO-E OF THE PUBLIC AUTHORITIES LAW. SUCH 27 LIGNOCELLULOSIC BIOMASS FEEDSTOCKS MAY INCLUDE, BUT ARE NOT NECESSARILY 28 LIMITED TO, SWITCHGRASSES OR WILLOWS, AGRICULTURAL AND FORESTRY RESI- 29 DUES, CLEAN WOOD AND WOOD WASTES, PULP AND PAPER MILL WASTES OR 30 EXTRACTS, AND NON-RECYCLABLE PAPER. ANY QUESTION AS TO WHETHER ANY 31 FEEDSTOCK QUALIFIES UNDER THIS SECTION SHALL BE DETERMINED BY THE PRESI- 32 DENT OF THE NEW YORK STATE ENERGY AND RESEARCH DEVELOPMENT AUTHORITY. 33 (3) "DENSIFIED BIOFUEL" MEANS A SOLID FUEL DERIVED BY THE MECHANICAL 34 DENSIFICATION AND REFINING OF BIOMASS SOURCED FROM WOODY OR AGRICULTURAL 35 FEEDSTOCKS. 36 (4) "Biofuel plant" means a commercial facility located in New York 37 state at which one or more biofuels are produced. FOR THE PURPOSES OF 38 THIS SECTION, ANY COMMERCIAL FACILITY WHERE CELLULOSIC ETHANOL, RENEWA- 39 BLE FUEL OIL OR DENSIFIED BIOFUEL IS PRODUCED SHALL BE CONSIDERED A 40 SEPARATE BIOFUEL PLANT. 41 (c) Reporting requirements. A taxpayer wishing to claim a credit under 42 this section shall annually certify to the commissioner (i) that biofuel 43 produced at the eligible biofuel plant meets all existing standards for 44 biofuel and (ii) the amount of biofuel produced at the eligible biofuel 45 plant during a taxable year. 46 (d) Cross-references. For application of the credit provided for in 47 this section, see the following provisions of this chapter: 48 (1) Article 9: Section 187-c. 49 (2) Article 9-A: Section 210, subdivision 38. 50 (3) Article 22: Section 606, subsections (i) and (jj). 51 S 2. Section 187-c of the tax law, as amended by section 2 of part K 52 of chapter 59 of the laws of 2012, is amended to read as follows: 53 S 187-c. Biofuel production credit. A taxpayer shall be allowed a 54 credit to be computed as provided in section [twenty-eight] THIRTY-EIGHT 55 of this chapter, [as added by part X of chapter sixty-two of the laws of 56 two thousand six,] against the tax imposed by this article. Provided, A. 6989 3 1 however, that the amount of such credit allowed against the tax imposed 2 by section one hundred eighty-four of this article shall be the excess 3 of the amount of such credit over the amount of any credit allowed by 4 this section against the tax imposed by section one hundred eighty-three 5 of this article. In no event shall the credit under this section be 6 allowed in an amount which will reduce the tax payable to less than the 7 applicable minimum tax fixed by section one hundred eighty-three or one 8 hundred eighty-five of this article. If, however, the amount of the 9 credit allowed under this section for any taxable year reduces the tax 10 to such amount, the excess shall be treated as an overpayment of tax to 11 be credited or refunded in accordance with the provisions of section six 12 hundred eighty-six of this chapter. Provided, however, the provisions of 13 subsection (c) of section one thousand eighty-eight of this chapter 14 notwithstanding, no interest shall be paid thereon. The tax credit 15 allowed pursuant to this section shall apply to taxable years beginning 16 before January first, two thousand twenty. 17 S 3. Subdivision 38 of section 210 of the tax law, as amended by 18 section 3 of part K of chapter 59 of the laws of 2012, is amended to 19 read as follows: 20 38. Biofuel production credit. A taxpayer shall be allowed a credit, 21 to be computed as provided in section [twenty-eight] THIRTY-EIGHT of 22 this chapter, [as added by part X of chapter sixty-two of the laws of 23 two thousand six,] against the tax imposed by this article. The credit 24 allowed under this subdivision for any taxable year shall not reduce the 25 tax due for such year to less than the higher of the amounts prescribed 26 in paragraphs (c) and (d) of subdivision one of this section. However, 27 if the amount of credit allowed under this subdivision for any taxable 28 year reduces the tax to such amount, any amount of credit thus not 29 deductible in such taxable year shall be treated as an overpayment of 30 tax to be credited or refunded in accordance with the provisions of 31 section one thousand eighty-six of this chapter. Provided, however, the 32 provisions of subsection (c) of section one thousand eighty-eight of 33 this chapter notwithstanding, no interest shall be paid thereon. The tax 34 credit allowed pursuant to this section shall apply to taxable years 35 beginning before January first, two thousand twenty. 36 S 4. Subsection (jj) of section 606 of the tax law, as amended by 37 section 4 of part K of chapter 59 of the laws of 2012, is amended to 38 read as follows: 39 (jj) Biofuel production credit. A taxpayer shall be allowed a credit 40 to be computed as provided in section [twenty-eight] THIRTY-EIGHT of 41 this chapter, [as added by part X of chapter sixty-two of the laws of 42 two thousand six,] against the tax imposed by this article. If the 43 amount of the credit allowed under this subsection for any taxable year 44 shall exceed the taxpayer's tax for such year, the excess shall be 45 treated as an overpayment of tax to be credited or refunded in accord- 46 ance with the provisions of section six hundred eighty-six of this arti- 47 cle, provided, however, that no interest shall be paid thereon. The tax 48 credit allowed pursuant to this section shall apply to taxable years 49 beginning before January first, two thousand twenty. 50 S 5. This act shall take effect immediately.