This bill has been amended

Bill S4563-2013

Includes the production of cellulosic ethanol, densified biofuel and renewable fuel oil within the biofuel production tax credit

Includes the production of cellulosic ethanol, densified biofuel and renewable fuel oil within the biofuel production tax credit; expands the cap for such credit to $10,000,000 a year and expands the term for which a taxpayer may take such credit to 10 years.

Details

Actions

  • Apr 29, 2014: REPORTED AND COMMITTED TO FINANCE
  • Jan 8, 2014: REFERRED TO ENERGY AND TELECOMMUNICATIONS
  • Apr 23, 2013: REPORTED AND COMMITTED TO FINANCE
  • Apr 10, 2013: REFERRED TO ENERGY AND TELECOMMUNICATIONS

Meetings

Votes

VOTE: COMMITTEE VOTE: - Energy and Telecommunications - Apr 23, 2013
Ayes (10): Maziarz, Carlucci, Fuschillo, Griffo, O'Mara, Ritchie, Robach, Parker, Kennedy, Dilan
Nays (1): Adams
VOTE: COMMITTEE VOTE: - Energy and Telecommunications - Apr 29, 2014
Ayes (7): Maziarz, Carlucci, Griffo, O'Mara, Ritchie, Robach, Flanagan
Ayes W/R (3): Kennedy, Dilan, Peralta
Nays (1): Parker

Memo

BILL NUMBER:S4563

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

PURPOSE OR GENERAL IDEA OF BILL:

To provide an additional tax credit for production of cellulosic ethanol, densified biofuel and renewable fuel oil.

SUMMARY OF SPECIFIC PROVISIONS:

Section 1 renumbers Section 28 of the tax law as Section 38 and amends the section to authorize a 25 cents per gallon tax credit for the production of cellulosic ethanol or renewable fuel oil after the the first forty thousand gallons per year presented to market. The section further provides a $15 dollar per bone dry ton tax credit for densified biofuel after the first 10 thousand tons per year. The tax credit is allowable for a maximum of ten million dollars per taxpayer per year for a maximum of ten consecutive years. Definitions are provided for "renewable fuel oil," "cellulosic ethanol," and "densified biofuel." The definition of "biofuel plant" is amended to include any commercial facility where cellulosic ethanol is one or more of the biofuels being produced at such facility, and, fox 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 biofuels 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.

New York has seen the commercialization of new technologies developed at SUNY ESF, Cornell and Clarkson universities for production of cellulosic ethanol using different feedstock, such as willow, northern hardwoods, and grasses. The proposed legislation builds on the incentives advanced for corn ethanol by extending a comparable production incentive to cellulosic ethanol, densified biofuels such as wood pellets, and renewable fuel oil from biomass.

Biofuels like cellulosic ethanol and densified biofuels (or pellets) have numerous benefits over. First, willows, grasses and northern hardwoods are well-suited to the climate of New York State. Therefore, New York State's native natural resources offer a diversity of feedstock to be used in the increased production of cellulosic ethanol, densified biofuels and renewable fuel oil.

Second, New York is an area particularly suited to not only the production, but also the use of densified biofuels and renewable fuel oil as heating fuels. This has potential to provide a local supply that could decrease transportation costs and offer economic growth to the areas growing and processing the feedstocks needed to make densified biofuels and renewable fuel oils.

Third, this incentive would provide a new market incentive for farmers and family forest owners to improve the quality of their soils and forests, by sequestering soil carbon, reducing nutrient losses, and providing much needed habitat for flora and fauna.

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. Even more compelling, densified biofuels and renewable fuel oil generated from New York's existing feedstock will help to decrease dependence on foreign oil while also offering economic stimulus to the regions most capable of producing the necessary feedstock.

LEGISLATIVE HISTORY:

New Bill.

FISCAL IMPLICATIONS:

To be determined.

EFFECTIVE DATE:

Immediately.


Text

STATE OF NEW YORK ________________________________________________________________________ 4563 2013-2014 Regular Sessions IN SENATE April 10, 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 Energy and Telecommunications 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, 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 LIQUID biofuel produced at a biofuel plant on or after January first, two thou- sand 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 part- nership 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] 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 NOT USED FOR FOOD PRODUCTION, INCLUDING BY-PRODUCTS 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 RESI- DUES, 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 PRESI- DENT 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. (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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