S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   6249
 
                        2017-2018 Regular Sessions
 
                           I N  A S S E M B L Y
 
                               March 1, 2017
                                ___________
 
 Introduced by M. of A. WALKER -- read once and referred to the Committee
   on Ways and Means
 
 AN  ACT  to  amend the tax law, in relation to biofuel production credit
   for production of biomethane
 
   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 38-a.
   § 2. Subdivisions (a) and (b) of section 38-a of the tax law, subdivi-
 sion (a) as amended by section 1 of part K of chapter 59 of the laws  of
 2012,  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 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 BIOMETHANE
 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.
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
              

                                                            LBD06185-01-7

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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 OR
 BIOMETHANE.
   (2) 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 Amer-
 ican Society of Testing and Materials designation D 6751-02.
   (3) 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, tobac-
 co and firearms for the production of ethanol for fuel, or (ii) as dena-
 tured  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)] (4) THE TERM "BIOMETHANE" SHALL MEAN BIOGASES THAT  ARE  EMITTED
 AS ORGANIC WASTES THAT BREAK DOWN IN AIRLESS ENVIRONMENTS. BIOMETHANE IS
 PRODUCED  FROM  A  VARIETY  OF  BIOMASS AND/OR BIOGAS SOURCES, INCLUDING
 LANDFILL GAS, SOLID WASTE, MUNICIPAL WASTEWATER AND AGRICULTURAL  MANURE
 VIA  AIRLESS  TANKS  CALLED ANAEROBIC DIGESTERS. IT CAN ALSO BE PRODUCED
 FROM OTHER SOURCES SUCH AS FORESTRY AND AGRICULTURAL WASTE  THROUGH  THE
 PROCESS OF THERMAL GASIFICATION AND METHANATION, ALTHOUGH THESE TECHNOL-
 OGIES  ARE  NOT  YET WIDELY USED. BIOMETHANE IS A RENEWABLE FUEL, EASILY
 DISTRIBUTED THROUGH EXISTING INFRASTRUCTURE AND IS SUITABLE FOR APPLICA-
 TIONS FROM LIGHT-DUTY VEHICLES TO HEAVY-DUTY FREIGHT TRUCKS.
   (5) "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 BIOMETHANE 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]  THIRTY-
 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
 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.
   § 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:

 A. 6249                             3
 
   §  187-c.  Biofuel  production  credit.  A taxpayer shall be allowed a
 credit to be computed as  provided  in  section  [twenty-eight]  THIRTY-
 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.
   § 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] THIRTY-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. 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.
   §  6.  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]
 THIRTY-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.

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   § 7. This act shall take effect immediately; provided however that the
 amendments to section 187-c of the tax law made by section four of  this
 act  shall take effect on the same date as section 15 of part S of chap-
 ter 59 of the laws of 2014 takes effect.