|SAME AS||SAME AS S07255|
|Ren §28 to be §28-a, amd §§28-a, 187-c, 210-B & 606, Tax L|
|Includes the production of cellulosic ethanol within the biofuel production tax credit.|
|01/09/2017||referred to ways and means|
|01/03/2018||referred to ways and means|
|01/12/2018||amend and recommit to ways and means|
|01/12/2018||print number 389a|
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NEW YORK STATE ASSEMBLY
MEMORANDUM IN SUPPORT OF LEGISLATION
submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A389A SPONSOR: Gunther
TITLE OF BILL: An act to amend the tax law, in relation to biofuel production credit for production of cellulosic ethanol   PURPOSE: 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 PROVISIONS: Section one amends section 28 of the tax law, which is renumbered to section 28-a, to provide a tax credit of 25 cents per gallon for 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. Section two though four of the bill amend sections 187-c, 210-B and 606 of the tax law to make provisions for the biofuel production credit. Section five provides for the effective date.   JUSTIFICATION: Chapter 62 of the laws of 2006 established a biofuel production credit in New York State, equal to 15 cents per gallon after the production of the first forty thousand gallons of biofuels. This legislation demon- strated New York State's commitment to mass production of biofuels such as ethanol made from corn. The legislation was intended to support commercialization of new technologies developed at universities includ- ing SUNY ESF, Cornell and Clarkson, for production of cellulosic ethanol using different feedstocks, such as willow, northern hardwoods, and grasses. Cellulosic ethanol has numerous benefits that ethanol produced from corn or sorghum lack. First, willows and northern hardwoods are better suited to the climate of New York State. New York State's existing natural resources are uniquely positioned to contribute to increased production of cellulosic ethanol. In addition, 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 biom- ass each year, which would displace at least 30 percent of current petroleum consumption in the United States. Also, 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 in biofuel refineries, as well as 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 has the 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, and 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 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 opportu- nities afforded by the development of biofuels, it is imperative that New York State generate additional incentives for the production of cellulosic ethanol.   LEGISLATIVE HISTORY: 2015-16: A1830 referred to Ways & Means 2014: A9389 Referred to Ways & Means 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 COMMIT- TEE; A.3840 Assembly Ways and Means Committee 2007-08: S.5389 PASSED SENATE; A.7570-A Assembly Ways and Means Commit- tee.   FISCAL IMPLICATIONS: To be determined.   EFFECTIVE DATE: Immediately.
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STATE OF NEW YORK ________________________________________________________________________ 389--A 2017-2018 Regular Sessions IN ASSEMBLY January 9, 2017 ___________ Introduced by M. of A. GUNTHER -- read once and referred to the Commit- tee on Ways and Means -- recommitted to the Committee on Ways and Means in accordance with Assembly Rule 3, sec. 2 -- committee discharged, bill amended, ordered reprinted as amended and recommitted to said committee 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: 1 Section 1. Section 28 of the tax law, as added by section 1 of part X 2 of chapter 62 of the laws of 2006, subdivision (a) as amended by section 3 1 of part K of chapter 59 of the laws of 2012, subdivision (d) as 4 amended by section 46 of part A of chapter 59 of the laws of 2014, is 5 renumbered section 28-a and amended to read as follows: 6 § 28-a. Biofuel production credit. (a) General. A taxpayer subject to 7 tax under article nine, nine-A or twenty-two of this chapter shall be 8 allowed a credit against such tax pursuant to the provisions referenced 9 in subdivision (d) of this section. The credit (or pro rata share of 10 earned credit in the case of a partnership) for each gallon of biofuel 11 produced at a biofuel plant on or after January first, two thousand six 12 shall equal fifteen cents per gallon or twenty-five cents per gallon for 13 production of cellulosic ethanol after the production of the first forty 14 thousand gallons per year presented to market. The credit under this 15 section shall be capped at two and one-half million dollars per taxpayer 16 per taxable year for up to no more than four consecutive taxable years 17 per biofuel plant. If the taxpayer is a partner in a partnership or 18 shareholder of a New York S corporation, then the cap imposed by the 19 preceding sentence shall be applied at the entity level, so that the 20 aggregate credit allowed to all the partners or shareholders of each 21 such entity in the taxable year does not exceed two and one-half million EXPLANATION--Matter in italics (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD06053-02-8A. 389--A 2 1 dollars. The tax credit allowed pursuant to this section shall apply to 2 taxable years beginning before January first, two thousand twenty. 3 (b) Definitions. For the purpose of this section, the following terms 4 shall have the following meanings: 5 (1) "Biofuel" means a fuel which includes biodiesel and ethanol. The 6 term "biodiesel" shall mean a fuel comprised exclusively of mono-alkyl 7 esters of long chain fatty acids derived from vegetable oils or animal 8 fats, designated B100, which meets the specifications of American Socie- 9 ty of Testing and Materials designation D 6751-02. The term "ethanol" 10 shall mean ethyl alcohol manufactured in the United States and its 11 territories and sold (i) for fuel use and which has been rendered unfit 12 for beverage use in a manner and which is produced at a facility 13 approved by the federal bureau of alcohol, tobacco and firearms for the 14 production of ethanol for fuel, or (ii) as denatured ethanol used by 15 blenders and refiners which has been rendered unfit for beverage use. 16 The term "biofuel" may also include any other standard approved by the 17 New York state energy and research development authority. 18 (2) "Cellulosic ethanol" means the production of ethanol from ligno- 19 cellulosic biomass feedstocks not used for food production that are 20 altered through activities referenced in subparagraph five of paragraph 21 (b) of subdivision one of section thirty-one hundred two-e of the public 22 authorities law. Such lignocellulosic biomass feedstocks may include, 23 but are not necessarily limited to, switchgrasses or willows, agricul- 24 tural and forestry residues, clean wood and wood wastes, pulp and paper 25 mill wastes or extracts, and non-recyclable paper. Any question as to 26 whether any feedstock qualifies under this paragraph shall be determined 27 by the president of the New York state energy and research development 28 authority in consultation with the commissioner of environmental conser- 29 vation and the commissioner of agriculture and markets. 30 (3) "Biofuel plant" means a commercial facility located in New York 31 state at which one or more biofuels are produced. For the purposes of 32 this section, any commercial facility where cellulosic ethanol is 33 produced shall be considered a separate biofuel plant. 34 (c) Reporting requirements. A taxpayer wishing to claim a credit under 35 this section shall annually certify to the commissioner (i) that biofuel 36 produced at the eligible biofuel plant meets all existing standards for 37 biofuel and (ii) the amount of biofuel produced at the eligible biofuel 38 plant during a taxable year. 39 (d) Cross-references. For application of the credit provided for in 40 this section, see the following provisions of this chapter: 41 (1) Article 9: Section 187-c. 42 (2) Article 9-A: Section 210-B, subdivision 24. 43 (3) Article 22: Section 606, subsections (i) and (jj). 44 § 2. Section 187-c of the tax law, as amended by section 15 of part S 45 of chapter 59 of the laws of 2014, is amended to read as follows: 46 § 187-c. Biofuel production credit. A taxpayer shall be allowed a 47 credit to be computed as provided in section [ twenty-eight] twenty- 48 eight-a of this chapter, [ as added by part X of chapter sixty-two of the49 laws of two thousand six,] against the tax imposed by this article. 50 Provided, however, that the amount of such credit allowed against the 51 tax imposed by section one hundred eighty-four of this article shall be 52 the excess of the amount of such credit over the amount of any credit 53 allowed by this section against the tax imposed by section one hundred 54 eighty-three of this article. In no event shall the credit under this 55 section be allowed in an amount which will reduce the tax payable to 56 less than the applicable minimum tax fixed by section one hundred eight-A. 389--A 3 1 y-three of this article. If, however, the amount of the credit allowed 2 under this section for any taxable year reduces the tax to such amount, 3 the excess shall be treated as an overpayment of tax to be credited or 4 refunded in accordance with the provisions of section six hundred eight- 5 y-six of this chapter. Provided, however, the provisions of subsection 6 (c) of section one thousand eighty-eight of this chapter notwithstand- 7 ing, no interest shall be paid thereon. The tax credit allowed pursuant 8 to this section shall apply to taxable years beginning before January 9 first, two thousand twenty. 10 § 3. Subdivision 24 of section 210-B of the tax law, as added by 11 section 17 of part A of chapter 59 of the laws of 2014, is amended to 12 read as follows: 13 24. Biofuel production credit. (a) General. A taxpayer shall be 14 allowed a credit, to be computed as provided in section [ twenty-eight] 15 twenty-eight-a of this chapter [ added as part X of chapter sixty-two of16 the laws of two thousand six], against the tax imposed by this article. 17 The credit allowed under this subdivision for any taxable year shall not 18 reduce the tax due for such year to less than the fixed dollar minimum 19 amount prescribed in paragraph (d) of subdivision one of section two 20 hundred ten of this article. However, if the amount of credit allowed 21 under this subdivision for any taxable year reduces the tax to such 22 amount or if the taxpayer otherwise pays tax based on the fixed dollar 23 minimum amount, any amount of credit thus not deductible in such taxable 24 year shall be treated as an overpayment of tax to be credited or 25 refunded in accordance with the provisions of section one thousand 26 eighty-six of this chapter. Provided, however, the provisions of 27 subsection (c) of section one thousand eighty-eight of this chapter 28 notwithstanding, no interest shall be paid thereon. The tax credit 29 allowed pursuant to this section shall apply to taxable years beginning 30 before January first, two thousand twenty. 31 § 4. Subsection (jj) of section 606 of the tax law, as amended by 32 section 4 of part K of chapter 59 of the laws of 2012, is amended to 33 read as follows: 34 (jj) Biofuel production credit. A taxpayer shall be allowed a credit 35 to be computed as provided in section [ twenty-eight] twenty-eight-a of 36 this chapter, [ as added by part X of chapter sixty-two of the laws of37 two thousand six,] against the tax imposed by this article. If the 38 amount of the credit allowed under this subsection for any taxable year 39 shall exceed the taxpayer's tax for such year, the excess shall be 40 treated as an overpayment of tax to be credited or refunded in accord- 41 ance with the provisions of section six hundred eighty-six of this arti- 42 cle, provided, however, that no interest shall be paid thereon. The tax 43 credit allowed pursuant to this section shall apply to taxable years 44 beginning before January first, two thousand twenty. 45 § 5. This act shall take effect immediately.