S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   2584
 
                        2023-2024 Regular Sessions
 
                             I N  S E N A T E
 
                             January 23, 2023
                                ___________
 
 Introduced  by  Sen.  PARKER -- read twice and ordered printed, and when
   printed to be committed to the Committee on  Energy  and  Telecommuni-
   cations
 
 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

  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD05582-01-3
 S. 2584                             2
              

 
 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  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 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] 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.
 S. 2584                             3
 
   § 4. 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.
   § 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]
 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.
   § 6. This act shall take effect immediately.