Bill S4335-2013

Includes the production of cellulosic ethanol within the biofuel production tax credit

Includes the production of cellulosic ethanol within the biofuel production tax credit.

Details

Actions

  • May 13, 2014: REPORTED AND COMMITTED TO FINANCE
  • Jan 8, 2014: REFERRED TO INVESTIGATIONS AND GOVERNMENT OPERATIONS
  • Jan 8, 2014: returned to senate
  • Jan 8, 2014: died in assembly
  • Jun 11, 2013: referred to ways and means
  • Jun 11, 2013: DELIVERED TO ASSEMBLY
  • Jun 11, 2013: PASSED SENATE
  • Jun 10, 2013: ORDERED TO THIRD READING CAL.1194
  • Jun 10, 2013: COMMITTEE DISCHARGED AND COMMITTED TO RULES
  • Mar 21, 2013: REFERRED TO INVESTIGATIONS AND GOVERNMENT OPERATIONS

Meetings

Calendars

Votes

VOTE: COMMITTEE VOTE: - Investigations and Government Operations - May 13, 2014
Ayes (9): Marcellino, Carlucci, Golden, Nozzolio, O'Mara, Zeldin, Hoylman, Diaz, Squadron

Memo

BILL NUMBER:S4335              REVISED 6/11/13

TITLE OF BILL: An act to amend the tax law, in relation to biofuel production credit for production of cellulosic ethanol

PURPOSE OR GENERAL IDEA OF BILL: To provide an additional tax credit for production of cellulosic ethanol in the amount of 25 cents per gallon after the production of the first 40,000 gallons.

SUMMARY OF SPECIFIC PROVISIONS:

Section 1 renumbers Section 28 of the tax law as Section 38 and amends the section to provide a tax credit of 25 cents per gallon fox the production of cellulosic ethanol after the production of the first forty thousand gallons per year presented to market. The section further defines "cellulosic ethanol," and amends the definition of "biofuel plant" to include any commercial facility where cellulosic ethanol is one or more of the biofuels being produced at such facility, and, for purposes of applying the tax credit, the facility shall be considered a separate biofuel plant.

JUSTIFICATION: In Chapter 62 of the laws of 2006, New York State established a biofuel production credit equal to 15 cents per gallon after the production of the first forty thousand gallons of biofuels. This legislation demonstrated New York State's commitment to mass production of biofuels such as ethanol made from corn. The legislation was also intended to support commercialization of new technologies developed at SUNY ESF, Cornell and Clarkson universities for production of cellulosic ethanol using different feedstocks, such as willow, northern hardwoods, and grasses.

Cellulosic ethanol has numerous benefits over ethanol produced from corn or sorghum. First, willows and northern hardwoods are well-suited to the climate of New York State. Therefore, New York State's existing natural resources are uniquely positioned to contribute to increased production of cellulosic ethanol. Second, the U.S. Department of Energy and U.S. Department of Agriculture reported in April 2005 that the United States has the capacity to sustainably produce 1.3 billion tons of biomass each year, which would displace at least 30 percent of current petroleum consumption in the United States. Furthermore, cellulosic ethanol produces fewer greenhouse gas emissions than other types of ethanol.

From an economic standpoint, the development of the biofuel industry in New York has the potential to create jobs, not only in biofuel refineries, but also in the areas of production, ore-processing, and transportation. A 2010 Renewable Fuels Roadmap developed by the New York State Energy and Development Authority (NYSERDA), determined that the biofuel industry offers potential for robust job growth.

Depending on the price paid for ethanol in the year 2020, NYSERDA estimates between 3,891 and 14,604 jobs can be created by direct and induced biofuel refinery growth, statewide. They further estimate that labor income, wages and salaries paid across the state, will fall between $172.6 million and $608.3 million. Overall, NYSERDA projects the gross domestic product of the industry to be between $0.46 billion and $1.7 billion.

Rural communities across New York, in particular, stand to benefit from the development of the biofuel industry as it provides an opportunity to diversify, add value to traditional products, and return abandoned farmland to the commercial sector.

In order to capitalize on both the environmental and economic opportunities afforded by the development of biofuels, New York State should generate additional incentives fox the production of cellulosic ethanol.

LEGISLATIVE HISTORY: 2012: S.7147 PASSED SENATE; A.9997 Referred to Assembly Ways and Means 2011: S.3345 SENATE INVESTIGATIONS AND GOVERNMENT OPERATIONS COMMITTEE 2009-10: S.3375 SENATE INVESTIGATIONS AND GOVERNMENT OPERATIONS COMMITTEE; A.3840 Assembly Ways and Means Committee. 2007-08: S.5389 PASSED SENATE; A.7570-A Assembly Ways and Means Committee.

FISCAL IMPLICATIONS: To be determined.

EFFECTIVE DATE: Immediately.


Text

STATE OF NEW YORK ________________________________________________________________________ 4335 2013-2014 Regular Sessions IN SENATE March 21, 2013 ___________
Introduced by Sen. YOUNG -- (at request of the Legislative Commission on Rural Resources) -- read twice and ordered printed, and when printed to be committed to the Committee on Investigations and Government Operations 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, is renumbered section 38 and amended to read as follows: S 38. 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.
(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, subdivision 38. (3) Article 22: Section 606, subsections (i) and (jj). S 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: S 187-c. Biofuel production credit. A taxpayer shall be allowed a credit to be computed as provided in section [twenty-eight] THIRTY-EIGHT 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 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 3. Subdivision 38 of section 210 of the tax law, as amended by section 3 of part K of chapter 59 of the laws of 2012, is amended to read as follows: 38. Biofuel production credit. A taxpayer shall be allowed a credit, to be computed as provided in section [twenty-eight] THIRTY-EIGHT 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. The credit allowed under this subdivision for any taxable year shall not reduce the tax due for such year to less than the higher of the amounts prescribed in paragraphs (c) and (d) of subdivision one of this section. However, if the amount of credit allowed under this subdivision for any taxable year reduces the tax to such 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 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 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. S 5. This act shall take effect immediately.

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