S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                  6615

                            I N  S E N A T E

                            February 1, 2016
                               ___________

Introduced  by Sens. RITCHIE, YOUNG, AKSHAR, BONACIC, O'MARA, VALESKY --
  (at request of the Legislative Commission on Rural Resources) --  read
  twice  and  ordered  printed,  and when printed to be committed to the
  Committee on Energy and Telecommunications

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:

  Section 1. Section 28 of the tax law, as added by section 1 of part  X
of chapter 62 of the laws of 2006, is renumbered section 42.
  S  2.  Subdivisions (a) and (b) of section 42 of the tax law, subdivi-
sion (a) as amended by section 1 of part K of chapter 59 of the laws  of
2012  and  subdivision (b) as added by section 1 of part X of chapter 62
of the laws of 2006, such section as renumbered by section one  of  this
act, are amended to read as follows:
  (a)  General.  A taxpayer subject to tax under article nine, nine-A or
twenty-two of this chapter shall be allowed a credit  against  such  tax
pursuant  to  the  provisions  referenced  in  subdivision  (d)  of this
section. The credit (or pro rata share of earned credit in the case of a
partnership) for each gallon of LIQUID biofuel  produced  at  a  biofuel
plant  on  or  after January first, two thousand six shall equal fifteen
cents per gallon, OR TWENTY-FIVE CENTS  PER  GALLON  FOR  PRODUCTION  OF
CELLULOSIC  ETHANOL  OR  RENEWABLE  FUEL OIL after the production of the
first forty thousand gallons per year presented to  market.  THE  CREDIT
FOR  EACH  BONE DRY TON OF DENSIFIED BIOFUEL PRODUCED AT A BIOFUEL PLANT
ON OR AFTER JANUARY FIRST, TWO THOUSAND SIX SHALL EQUAL FIFTEEN  DOLLARS
PER BONE DRY TON AFTER THE PRODUCTION OF THE FIRST TEN THOUSAND TONS PER
YEAR  PRESENTED TO MARKET. The credit under this section shall be capped
at [two and one-half] TEN million dollars per taxpayer per taxable  year
for  up to no more than [four] TEN consecutive taxable years per biofuel
plant. If the taxpayer is a partner in a partnership or shareholder of a
New York S corporation, then the cap imposed by the  preceding  sentence
shall  be  applied  at  the  entity  level, so that the aggregate credit

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
              

                                                           LBD07660-04-6

S. 6615                             2

allowed to all the partners or shareholders of each such entity  in  the
taxable year does not exceed [two and one-half] TEN million dollars. The
tax credit allowed pursuant to this section shall apply to taxable years
beginning before January first, two thousand twenty.
  (b)  Definitions. For the purpose of this section, the following terms
shall have the following meanings:
  (1) "Biofuel" means a fuel which includes  biodiesel  [and],  ethanol,
DENSIFIED  BIOFUEL  AND  RENEWABLE  FUEL OIL. The term "biodiesel" shall
mean a fuel comprised exclusively of mono-alkyl  esters  of  long  chain
fatty acids derived from vegetable oils or animal fats, designated B100,
which  meets the specifications of American Society of Testing and Mate-
rials designation D 6751-02. The term "ethanol" shall mean ethyl alcohol
manufactured in the United States and its territories and sold  (i)  for
fuel  use and which has been rendered unfit for beverage use in a manner
and which is produced at a facility approved by the  federal  bureau  of
alcohol, tobacco and firearms for the production of ethanol for fuel, or
(ii)  as  denatured ethanol used by blenders and refiners which has been
rendered unfit for beverage use.  The term "biofuel"  may  also  include
any  other  standard  approved by the New York state energy and research
development authority.  THE TERM "RENEWABLE FUEL OIL" SHALL MEAN A  FUEL
COMPRISED  OF ANY NON-FOOD BIOMASS BASED FEEDSTOCK THAT CAN BE USED AS A
FULL OR PARTIAL SUBSTITUTE FOR TRADITIONAL PETROLEUM FUELS.
  (2) "CELLULOSIC ETHANOL" MEANS THE PRODUCTION OF ETHANOL  FROM  LIGNO-
CELLULOSIC  BIOMASS FEEDSTOCKS, INCLUDING CELLULOSIC COMPONENTS OF SEPA-
RATED FOOD WASTE AS DEFINED IN TABLE 1 OF C.F.R. S 80.1426  AND  BY-PRO-
DUCTS  FROM  AGRICULTURAL  WASTE,  THAT  ARE  ALTERED THROUGH ACTIVITIES
REFERENCED IN SUBPARAGRAPH FIVE OF PARAGRAPH (B) OF SUBDIVISION  ONE  OF
SECTION  THIRTY-ONE  HUNDRED  TWO-E  OF THE PUBLIC AUTHORITIES LAW. SUCH
LIGNOCELLULOSIC BIOMASS FEEDSTOCKS MAY INCLUDE, BUT ARE NOT  NECESSARILY
LIMITED TO, SWITCHGRASSES OR WILLOWS, AGRICULTURAL AND FORESTRY RESIDUES
AS  DEFINED IN TABLE 1 OF C.F.R.  S 80.1426, CLEAN WOOD AND WOOD WASTES,
PULP AND PAPER MILL WASTES OR EXTRACTS, AND  NON-RECYCLABLE  PAPER.  ANY
QUESTION  AS TO WHETHER ANY FEEDSTOCK QUALIFIES UNDER THIS SECTION SHALL
BE DETERMINED BY THE PRESIDENT OF THE NEW YORK STATE ENERGY AND RESEARCH
DEVELOPMENT AUTHORITY.
  (3) "DENSIFIED BIOFUEL" MEANS A SOLID FUEL DERIVED BY  THE  MECHANICAL
DENSIFICATION AND REFINING OF BIOMASS SOURCED FROM WOODY OR AGRICULTURAL
FEEDSTOCKS.
  (4)  "Biofuel  plant"  means a commercial facility located in New York
state at which one or more biofuels are produced.  FOR THE  PURPOSES  OF
THIS  SECTION, ANY COMMERCIAL FACILITY WHERE CELLULOSIC ETHANOL, RENEWA-
BLE FUEL OIL OR DENSIFIED BIOFUEL IS  PRODUCED  SHALL  BE  CONSIDERED  A
SEPARATE BIOFUEL PLANT.
  S  3.  Section 187-c of the tax law, as amended by section 2 of part K
of chapter 59 of the laws of 2012, is amended to read as follows:
  S 187-c. Biofuel production credit. A  taxpayer  shall  be  allowed  a
credit to be computed as provided in section [twenty-eight] FORTY-TWO of
this  chapter,  [as  added by part X of chapter sixty-two of the laws of
two thousand six,] against the tax imposed by  this  article.  Provided,
however,  that the amount of such credit allowed against the tax imposed
by section one hundred eighty-four of this article shall be  the  excess
of  the  amount  of such credit over the amount of any credit allowed by
this section against the tax imposed by section one hundred eighty-three
of this article. In no event shall the  credit  under  this  section  be
allowed  in an amount which will reduce the tax payable to less than the
applicable minimum tax fixed by section one hundred eighty-three or  one

S. 6615                             3

hundred  eighty-five  of  this  article.  If, however, the amount of the
credit allowed under this section for any taxable year reduces  the  tax
to  such amount, 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, the provisions of
subsection  (c)  of  section  one  thousand eighty-eight of this chapter
notwithstanding, no interest shall  be  paid  thereon.  The  tax  credit
allowed  pursuant to this section shall apply to taxable years beginning
before January first, two thousand twenty.
  S 4. Section 187-c of the tax law, as amended by section 15 of part  S
of chapter 59 of the laws of 2014, is amended to read as follows:
  S  187-c.  Biofuel  production  credit.  A taxpayer shall be allowed a
credit to be computed as provided in section [twenty-eight] FORTY-TWO of
this chapter, [as added by part X of chapter sixty-two of  the  laws  of
two  thousand  six,]  against the tax imposed by this article. Provided,
however, that the amount of such credit allowed against the tax  imposed
by  section  one hundred eighty-four of this article shall be the excess
of the amount of such credit over the amount of any  credit  allowed  by
this section against the tax imposed by section one hundred eighty-three
of  this  article.  In  no  event shall the credit under this section be
allowed in an amount which will reduce the tax payable to less than  the
applicable minimum tax fixed by section one hundred eighty-three of this
article.  If,  however,  the  amount  of  the  credit allowed under this
section for any taxable year reduces the tax to such amount, 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, the provisions of subsection (c) of  section
one  thousand  eighty-eight of this chapter notwithstanding, no interest
shall be paid thereon. The tax credit allowed pursuant to  this  section
shall  apply  to taxable years beginning before January first, two thou-
sand twenty.
  S 5.  Subdivision 24 of section 210-b of the  tax  law,  as  added  by
section  17  of  part A of chapter 59 of the laws of 2014, is amended to
read as follows:
  24. Biofuel production credit. [(a)  General.]  A  taxpayer  shall  be
allowed  a  credit, to be computed as provided in section [twenty-eight]
FORTY-TWO of this chapter [added as part X of chapter sixty-two  of  the
laws  of two thousand six], against the tax imposed by this article. The
credit allowed under this subdivision for any  taxable  year  shall  not
reduce  the  tax due for such year to less than the fixed dollar minimum
amount prescribed in paragraph (d) of subdivision  one  of  section  two
hundred  ten  of this article.  However, if the amount of credit allowed
under this subdivision for any taxable year  reduces  the  tax  to  such
amount  or  if the taxpayer otherwise pays tax based on the fixed dollar
minimum amount, any amount of credit thus not deductible in such taxable
year shall be treated as  an  overpayment  of  tax  to  be  credited  or
refunded  in  accordance  with  the  provisions  of section one thousand
eighty-six  of  this  chapter.  Provided,  however,  the  provisions  of
subsection  (c)  of  section  one  thousand eighty-eight of this chapter
notwithstanding, no interest shall  be  paid  thereon.  The  tax  credit
allowed  pursuant to this section shall apply to taxable years beginning
before January first, two thousand twenty.
  S 6. Subsection (jj) of section 606 of the  tax  law,  as  amended  by
section  4  of  part  K of chapter 59 of the laws of 2012, is amended to
read as follows:

S. 6615                             4

  (jj) Biofuel production credit. A taxpayer shall be allowed  a  credit
to  be  computed as provided in section [twenty-eight] FORTY-TWO of this
chapter, [as added by part X of chapter sixty-two of  the  laws  of  two
thousand six,] against the tax imposed by this article. If the amount of
the  credit  allowed  under  this  subsection for any taxable year shall
exceed the taxpayer's tax for such year, 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. The tax credit allowed
pursuant to this section shall apply to taxable years  beginning  before
January first, two thousand twenty.
  S  7. This act shall take effect immediately, except that section four
of this act shall take effect on the same date and in the same manner as
section 15 of part S of chapter 59 of the laws of 2014 takes effect.