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: 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 biofuel 10 produced at a biofuel plant on or after January first, two thousand six 11 shall equal fifteen cents per gallon OR TWENTY-FIVE CENTS PER GALLON FOR 12 PRODUCTION OF CELLULOSIC ETHANOL after the production of the first forty 13 thousand gallons per year presented to market. The credit under this 14 section shall be capped at two and one-half million dollars per taxpayer 15 per taxable year for up to no more than four consecutive taxable years 16 per biofuel plant. If the taxpayer is a partner in a partnership or 17 shareholder of a New York S corporation, then the cap imposed by the 18 preceding sentence shall be applied at the entity level, so that the 19 aggregate credit allowed to all the partners or shareholders of each 20 such entity in the taxable year does not exceed two and one-half million 21 dollars. The tax credit allowed pursuant to this section shall apply to 22 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 1 (b) Definitions. For the purpose of this section, the following terms 2 shall have the following meanings: 3 (1) "Biofuel" means a fuel which includes biodiesel and ethanol. The 4 term "biodiesel" shall mean a fuel comprised exclusively of mono-alkyl 5 esters of long chain fatty acids derived from vegetable oils or animal 6 fats, designated B100, which meets the specifications of American Socie- 7 ty of Testing and Materials designation D 6751-02. The term "ethanol" 8 shall mean ethyl alcohol manufactured in the United States and its 9 territories and sold (i) for fuel use and which has been rendered unfit 10 for beverage use in a manner and which is produced at a facility 11 approved by the federal bureau of alcohol, tobacco and firearms for the 12 production of ethanol for fuel, or (ii) as denatured ethanol used by 13 blenders and refiners which has been rendered unfit for beverage use. 14 The term "biofuel" may also include any other standard approved by the 15 New York state energy and research development authority. 16 (2) "CELLULOSIC ETHANOL" MEANS THE PRODUCTION OF ETHANOL FROM LIGNO- 17 CELLULOSIC BIOMASS FEEDSTOCKS NOT USED FOR FOOD PRODUCTION THAT ARE 18 ALTERED THROUGH ACTIVITIES REFERENCED IN SUBPARAGRAPH FIVE OF PARAGRAPH 19 (B) OF SUBDIVISION ONE OF SECTION THIRTY-ONE HUNDRED TWO-E OF THE PUBLIC 20 AUTHORITIES LAW. SUCH LIGNOCELLULOSIC BIOMASS FEEDSTOCKS MAY INCLUDE, 21 BUT ARE NOT NECESSARILY LIMITED TO, SWITCHGRASSES OR WILLOWS, AGRICUL- 22 TURAL AND FORESTRY RESIDUES, CLEAN WOOD AND WOOD WASTES, PULP AND PAPER 23 MILL WASTES OR EXTRACTS, AND NON-RECYCLABLE PAPER. ANY QUESTION AS TO 24 WHETHER ANY FEEDSTOCK QUALIFIES UNDER THIS PARAGRAPH SHALL BE DETERMINED 25 BY THE PRESIDENT OF THE NEW YORK STATE ENERGY AND RESEARCH DEVELOPMENT 26 AUTHORITY IN CONSULTATION WITH THE COMMISSIONER OF ENVIRONMENTAL CONSER- 27 VATION AND THE COMMISSIONER OF AGRICULTURE AND MARKETS. 28 (3) "Biofuel plant" means a commercial facility located in New York 29 state at which one or more biofuels are produced. FOR THE PURPOSES OF 30 THIS SECTION, ANY COMMERCIAL FACILITY WHERE CELLULOSIC ETHANOL IS 31 PRODUCED SHALL BE CONSIDERED A SEPARATE BIOFUEL PLANT. 32 (c) Reporting requirements. A taxpayer wishing to claim a credit under 33 this section shall annually certify to the commissioner (i) that biofuel 34 produced at the eligible biofuel plant meets all existing standards for 35 biofuel and (ii) the amount of biofuel produced at the eligible biofuel 36 plant during a taxable year. 37 (d) Cross-references. For application of the credit provided for in 38 this section, see the following provisions of this chapter: 39 (1) Article 9: Section 187-c. 40 (2) Article 9-A: Section 210, subdivision 38. 41 (3) Article 22: Section 606, subsections (i) and (jj). 42 S 2. Section 187-c of the tax law, as amended by section 2 of part K 43 of chapter 59 of the laws of 2012, is amended to read as follows: 44 S 187-c. Biofuel production credit. A taxpayer shall be allowed a 45 credit to be computed as provided in section [twenty-eight] THIRTY-EIGHT 46 of this chapter, [as added by part X of chapter sixty-two of the laws of 47 two thousand six,] against the tax imposed by this article. Provided, 48 however, that the amount of such credit allowed against the tax imposed 49 by section one hundred eighty-four of this article shall be the excess 50 of the amount of such credit over the amount of any credit allowed by 51 this section against the tax imposed by section one hundred eighty-three 52 of this article. In no event shall the credit under this section be 53 allowed in an amount which will reduce the tax payable to less than the 54 applicable minimum tax fixed by section one hundred eighty-three or one 55 hundred eighty-five of this article. If, however, the amount of the 56 credit allowed under this section for any taxable year reduces the tax S. 4335 3 1 to such amount, the excess shall be treated as an overpayment of tax to 2 be credited or refunded in accordance with the provisions of section six 3 hundred eighty-six of this chapter. Provided, however, the provisions of 4 subsection (c) of section one thousand eighty-eight of this chapter 5 notwithstanding, no interest shall be paid thereon. The tax credit 6 allowed pursuant to this section shall apply to taxable years beginning 7 before January first, two thousand twenty. 8 S 3. Subdivision 38 of section 210 of the tax law, as amended by 9 section 3 of part K of chapter 59 of the laws of 2012, is amended to 10 read as follows: 11 38. Biofuel production credit. A taxpayer shall be allowed a credit, 12 to be computed as provided in section [twenty-eight] THIRTY-EIGHT of 13 this chapter, [as added by part X of chapter sixty-two of the laws of 14 two thousand six,] against the tax imposed by this article. The credit 15 allowed under this subdivision for any taxable year shall not reduce the 16 tax due for such year to less than the higher of the amounts prescribed 17 in paragraphs (c) and (d) of subdivision one of this section. However, 18 if the amount of credit allowed under this subdivision for any taxable 19 year reduces the tax to such amount, any amount of credit thus not 20 deductible in such taxable year shall be treated as an overpayment of 21 tax to be credited or refunded in accordance with the provisions of 22 section one thousand eighty-six of this chapter. Provided, however, the 23 provisions of subsection (c) of section one thousand eighty-eight of 24 this chapter notwithstanding, no interest shall be paid thereon. The tax 25 credit allowed pursuant to this section shall apply to taxable years 26 beginning before January first, two thousand twenty. 27 S 4. Subsection (jj) of section 606 of the tax law, as amended by 28 section 4 of part K of chapter 59 of the laws of 2012, is amended to 29 read as follows: 30 (jj) Biofuel production credit. A taxpayer shall be allowed a credit 31 to be computed as provided in section [twenty-eight] THIRTY-EIGHT of 32 this chapter, [as added by part X of chapter sixty-two of the laws of 33 two thousand six,] against the tax imposed by this article. If the 34 amount of the credit allowed under this subsection for any taxable year 35 shall exceed the taxpayer's tax for such year, the excess shall be 36 treated as an overpayment of tax to be credited or refunded in accord- 37 ance with the provisions of section six hundred eighty-six of this arti- 38 cle, provided, however, that no interest shall be paid thereon. The tax 39 credit allowed pursuant to this section shall apply to taxable years 40 beginning before January first, two thousand twenty. 41 S 5. This act shall take effect immediately.