S T A T E   O F   N E W   Y O R K
       ________________________________________________________________________
                                         9389
                                 I N  A S S E M B L Y
                                    April 24, 2014
                                      ___________
       Introduced  by M. of A. GUNTHER -- read once and referred to the Commit-
         tee on Ways and Means
       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
    4  38-a and amended to read as follows:
    5    S 38-a. 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.
   23    (b) Definitions. For the purpose of this section, the following  terms
   24  shall have the following meanings:
   25    (1)  "Biofuel"  means a fuel which includes biodiesel and ethanol. The
   26  term "biodiesel" shall mean a fuel comprised exclusively  of  mono-alkyl
   27  esters  of  long chain fatty acids derived from vegetable oils or animal
   28  fats, designated B100, which meets the specifications of American Socie-
        EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                             [ ] is old law to be omitted.
                                                                  LBD07137-02-4
       A. 9389                             2
    1  ty of Testing and Materials designation D 6751-02.  The  term  "ethanol"
    2  shall  mean  ethyl  alcohol  manufactured  in  the United States and its
    3  territories and sold (i) for fuel use and which has been rendered  unfit
    4  for  beverage  use  in  a  manner  and  which  is produced at a facility
    5  approved by the federal bureau of alcohol, tobacco and firearms for  the
    6  production  of  ethanol  for  fuel, or (ii) as denatured ethanol used by
    7  blenders and refiners which has been rendered unfit  for  beverage  use.
    8  The  term  "biofuel" may also include any other standard approved by the
    9  New York state energy and research development authority.
   10    (2) "CELLULOSIC ETHANOL" MEANS THE PRODUCTION OF ETHANOL  FROM  LIGNO-
   11  CELLULOSIC  BIOMASS  FEEDSTOCKS  NOT  USED  FOR FOOD PRODUCTION THAT ARE
   12  ALTERED THROUGH ACTIVITIES REFERENCED IN SUBPARAGRAPH FIVE OF  PARAGRAPH
   13  (B) OF SUBDIVISION ONE OF SECTION THIRTY-ONE HUNDRED TWO-E OF THE PUBLIC
   14  AUTHORITIES  LAW.  SUCH  LIGNOCELLULOSIC BIOMASS FEEDSTOCKS MAY INCLUDE,
   15  BUT ARE NOT NECESSARILY LIMITED TO, SWITCHGRASSES OR  WILLOWS,  AGRICUL-
   16  TURAL  AND FORESTRY RESIDUES, CLEAN WOOD AND WOOD WASTES, PULP AND PAPER
   17  MILL WASTES OR EXTRACTS, AND NON-RECYCLABLE PAPER. ANY  QUESTION  AS  TO
   18  WHETHER ANY FEEDSTOCK QUALIFIES UNDER THIS PARAGRAPH SHALL BE DETERMINED
   19  BY  THE  PRESIDENT OF THE NEW YORK STATE ENERGY AND RESEARCH DEVELOPMENT
   20  AUTHORITY IN CONSULTATION WITH THE COMMISSIONER OF ENVIRONMENTAL CONSER-
   21  VATION AND THE COMMISSIONER OF AGRICULTURE AND MARKETS.
   22    (3) "Biofuel plant" means a commercial facility located  in  New  York
   23  state  at  which one or more biofuels are produced.  FOR THE PURPOSES OF
   24  THIS SECTION,  ANY  COMMERCIAL  FACILITY  WHERE  CELLULOSIC  ETHANOL  IS
   25  PRODUCED SHALL BE CONSIDERED A SEPARATE BIOFUEL PLANT.
   26    (c) Reporting requirements. A taxpayer wishing to claim a credit under
   27  this section shall annually certify to the commissioner (i) that biofuel
   28  produced  at the eligible biofuel plant meets all existing standards for
   29  biofuel and (ii) the amount of biofuel produced at the eligible  biofuel
   30  plant during a taxable year.
   31    (d)  Cross-references.  For  application of the credit provided for in
   32  this section, see the following provisions of this chapter:
   33    (1) Article 9: Section 187-c.
   34    (2) Article 9-A: Section 210, subdivision 38.
   35    (3) Article 22: Section 606, subsections (i) and (jj).
   36    S 2. Section 187-c of the tax law, as amended by section 2 of  part  K
   37  of chapter 59 of the laws of 2012, is amended to read as follows:
   38    S  187-c.  Biofuel  production  credit.  A taxpayer shall be allowed a
   39  credit  to  be  computed   as   provided   in   section   [twenty-eight]
   40  THIRTY-EIGHT-A of this chapter, [as added by part X of chapter sixty-two
   41  of  the laws of two thousand six,] against the tax imposed by this arti-
   42  cle. Provided, however, that the amount of such credit  allowed  against
   43  the tax imposed by section one hundred eighty-four of this article shall
   44  be the excess of the amount of such credit over the amount of any credit
   45  allowed  by  this section against the tax imposed by section one hundred
   46  eighty-three of this article. In no event shall the  credit  under  this
   47  section  be  allowed  in  an amount which will reduce the tax payable to
   48  less than the applicable minimum tax fixed by section one hundred eight-
   49  y-three or one hundred eighty-five of this  article.  If,  however,  the
   50  amount  of  the  credit  allowed under this section for any taxable year
   51  reduces the tax to such amount, the excess shall be treated as an  over-
   52  payment  of  tax  to  be  credited  or  refunded  in accordance with the
   53  provisions of section six hundred eighty-six of this chapter.  Provided,
   54  however, the provisions of subsection (c) of section one thousand eight-
   55  y-eight of this chapter notwithstanding, no interest shall be paid ther-
       A. 9389                             3
    1  eon.  The  tax  credit  allowed  pursuant to this section shall apply to
    2  taxable years beginning before January first, two thousand twenty.
    3    S  3.  Subdivision  38  of  section  210 of the tax law, as amended by
    4  section 3 of part K of chapter 59 of the laws of  2012,  is  amended  to
    5  read as follows:
    6    38.  Biofuel  production credit. A taxpayer shall be allowed a credit,
    7  to be computed as provided in section [twenty-eight]  THIRTY-EIGHT-A  of
    8  this  chapter,  [as  added by part X of chapter sixty-two of the laws of
    9  two thousand six,] against the tax imposed by this article.  The  credit
   10  allowed under this subdivision for any taxable year shall not reduce the
   11  tax  due for such year to less than the higher of the amounts prescribed
   12  in paragraphs (c) and (d) of subdivision one of this  section.  However,
   13  if  the  amount of credit allowed under this subdivision for any taxable
   14  year reduces the tax to such amount,  any  amount  of  credit  thus  not
   15  deductible  in  such  taxable year shall be treated as an overpayment of
   16  tax to be credited or refunded in  accordance  with  the  provisions  of
   17  section  one thousand eighty-six of this chapter. Provided, however, the
   18  provisions of subsection (c) of section  one  thousand  eighty-eight  of
   19  this chapter notwithstanding, no interest shall be paid thereon. The tax
   20  credit  allowed  pursuant  to  this section shall apply to taxable years
   21  beginning before January first, two thousand twenty.
   22    S 4. Subsection (jj) of section 606 of the  tax  law,  as  amended  by
   23  section  4  of  part  K of chapter 59 of the laws of 2012, is amended to
   24  read as follows:
   25    (jj) Biofuel production credit. A taxpayer shall be allowed  a  credit
   26  to  be  computed as provided in section [twenty-eight] THIRTY-EIGHT-A of
   27  this chapter, [as added by part X of chapter sixty-two of  the  laws  of
   28  two  thousand  six,]  against  the  tax  imposed by this article. If the
   29  amount of the credit allowed under this subsection for any taxable  year
   30  shall  exceed  the  taxpayer's  tax  for  such year, the excess shall be
   31  treated as an overpayment of tax to be credited or refunded  in  accord-
   32  ance with the provisions of section six hundred eighty-six of this arti-
   33  cle,  provided, however, that 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 5. This act shall take effect immediately.