S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                    389
 
                        2017-2018 Regular Sessions
 
                           I N  A S S E M B L Y
 
                              January 9, 2017
                                ___________
 
 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:

   Section 1. Section 28 of the tax law, as added by section 1 of part  X
 of chapter 62 of the laws of 2006, subdivision (a) as amended by section
 1  of  part  K  of  chapter  59  of the laws of 2012, subdivision (d) as
 amended by section 46 of part A of chapter 59 of the laws  of  2014,  is
 renumbered section 28-a and amended to read as follows:
   § 28-a. Biofuel production credit.  (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  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 after the production of the first forty
 thousand gallons per year presented to market.  The  credit  under  this
 section shall be capped at two and one-half million dollars per taxpayer
 per  taxable  year for up to no more than four 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  allowed  to  all the partners or shareholders of each
 such entity in the taxable year does not exceed two and one-half million
 dollars. The tax credit allowed pursuant to this section shall apply  to
 taxable  years  beginning  before  January  first, two thousand [twenty]
 TWENTY-THREE.

  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD06053-01-7
              

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   (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. 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 Socie-
 ty of Testing and Materials 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.
   (2) "CELLULOSIC ETHANOL" MEANS THE PRODUCTION OF ETHANOL  FROM  LIGNO-
 CELLULOSIC  BIOMASS  FEEDSTOCKS  NOT  USED  FOR FOOD PRODUCTION 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,  AGRICUL-
 TURAL  AND FORESTRY RESIDUES, 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 PARAGRAPH SHALL BE DETERMINED
 BY  THE  PRESIDENT OF THE NEW YORK STATE ENERGY AND RESEARCH DEVELOPMENT
 AUTHORITY IN CONSULTATION WITH THE COMMISSIONER OF ENVIRONMENTAL CONSER-
 VATION AND THE COMMISSIONER OF AGRICULTURE AND MARKETS.
   (3) "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  IS
 PRODUCED SHALL BE CONSIDERED A SEPARATE BIOFUEL PLANT.
   (c) Reporting requirements. A taxpayer wishing to claim a credit under
 this section shall annually certify to the commissioner (i) that biofuel
 produced  at the eligible biofuel plant meets all existing standards for
 biofuel and (ii) the amount of biofuel produced at the eligible  biofuel
 plant during a taxable year.
   (d)  Cross-references.  For  application of the credit provided for in
 this section, see the following provisions of this chapter:
   (1) Article 9: Section 187-c.
   (2) Article 9-A: Section 210-B, subdivision 24.
   (3) Article 22: Section 606, subsections (i) and (jj).
   § 2. 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]  TWENTY-
 EIGHT-A 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 eight-
 y-three or one hundred eighty-five of this  article.  If,  however,  the
 amount  of  the  credit  allowed under this section for any taxable year

 A. 389                              3
 
 reduces the tax to such amount, the excess shall be treated as an  over-
 payment  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 eight-
 y-eight of this chapter notwithstanding, no interest shall be paid ther-
 eon.  The  tax  credit  allowed  pursuant to this section shall apply to
 taxable years beginning before  January  first,  two  thousand  [twenty]
 TWENTY-THREE.
   §  3. 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] TWENTY-
 EIGHT-A 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 eight-
 y-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 eight-
 y-six of this chapter. Provided, however, the provisions  of  subsection
 (c)  of  section one thousand eighty-eight of this chapter notwithstand-
 ing, 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] TWENTY-THREE.
   § 4. 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]
 TWENTY-EIGHT-A 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] TWENTY-THREE.
   §  5.  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:
   (jj)  Biofuel  production credit. A taxpayer shall be allowed a credit
 to be computed as provided in section [twenty-eight]  TWENTY-EIGHT-A  of

 A. 389                              4
 
 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  accord-
 ance with the provisions of section six hundred eighty-six of this arti-
 cle,  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] TWENTY-THREE.
   §  6.  This act shall take effect immediately; provided, however, that
 the amendments made to section 187-c of the  tax  law  made  by  section
 three  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.