S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   1417
 
                        2017-2018 Regular Sessions
 
                           I N  A S S E M B L Y
 
                             January 12, 2017
                                ___________
 
 Introduced  by M. of A. JENNE, SKARTADOS, PALMESANO, FITZPATRICK -- 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:
 
   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 43.
   §  2.  Subdivisions (a) and (b) of section 43 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
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
              

                                                            LBD06616-01-7

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 shall  be  applied  at  the  entity  level, so that the aggregate credit
 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. § 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.  § 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.
   §  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:
   § 187-c. Biofuel production credit. A  taxpayer  shall  be  allowed  a
 credit  to be computed as provided in section [twenty-eight] FORTY-THREE
 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

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 applicable minimum tax fixed by section one hundred eighty-three or  one
 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.
   §  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:
   § 187-c. Biofuel production credit. A  taxpayer  shall  be  allowed  a
 credit  to be computed as provided in section [twenty-eight] FORTY-THREE
 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.
   §  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-THREE 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.
   § 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:

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   (jj) Biofuel production credit. A taxpayer shall be allowed  a  credit
 to be computed as provided in section [twenty-eight] FORTY-THREE 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.
   § 7. This act shall take effect immediately.