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A03281 Summary:

BILL NOA03281
 
SAME ASNo Same As
 
SPONSORBarrett
 
COSPNSRRosenthal, Titone, Ortiz, Rivera, Gunther, Lifton, Glick, Magee, Skoufis, Lupardo, Peoples-Stokes, Seawright, Gottfried, Jaffee, Colton, Blake, D'Urso, Crespo, Fahy, Lavine
 
MLTSPNSRCook, Jones, Mosley, Simon, Thiele
 
Amd 150 & 16, Ag & Mkts L; amd 210-B & 606, Tax L; amd 3-0301 & 19-0309, En Con L
 
Establishes a tax credit for farmers who maximize carbon sequestration potential through a "carbon farming" land management strategy; directs DEC to develop regulations related to certifying the amount of carbon sequestered or emissions reduced.
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A03281 Memo:

NEW YORK STATE ASSEMBLY
MEMORANDUM IN SUPPORT OF LEGISLATION
submitted in accordance with Assembly Rule III, Sec 1(f)
 
BILL NUMBER: A3281
 
SPONSOR: Barrett
  TITLE OF BILL: An act to amend the agriculture and markets law, the environmental conservation law and the tax law, in relation to enacting the carbon farming act   PURPOSE: The purpose of this bill is to create a new financial incentive to farm- ers for land management practices which help improve soil health and reduce greenhouse gas emissions, making New York a leader in promoting new agricultural strategies that combat climate change.   SUMMARY OF PROVISIONS: This bill shall be known and cited as the "carbon farming act". A new subdivision 5 is added to section 150 of the agriculture and markets law to define "carbon farming" as the implementation of land management practices which reduce and mitigate greenhouse gas emissions on land used in support of farm operations and the further quantifica- tion of those benefits using existing state and federal tools for meas- uring carbon storage in soil and the reduction of carbon dioxide (CO2) emissions. A new subdivision 52 is added to section 210-B of the tax law to create a carbon farming credit allowance to those tax paying agricultural busi- nesses, which produce farm products, for their practice of carbon farm- ing. The economic value of the carbon farming credit would be determined by the commissioner of environmental conservation, in consultation with the commissioner of agriculture and markets, using existing methods for measuring air pollution, pursuant to paragraph ccc of subdivision two of section 3-0301 of the environmental conservation law. The amount credited to the taxpayer for carbon sequestration and green- house gas emissions reduction would be based upon a certificate of eligibility issued by the commissioner of environmental conservation, pursuant to section 19-0309 of the environmental conservation law. In the event a tax credit allowance exceeded the taxpayer's total tax for a given year, the credit could be carried over to the following three years. A new subsection hhh is added to section 606 of the tax law to make conforming changes related to definitions of carbon farming credit and its application and carryover. A new paragraph ccc is added to subdivision 2 of section 3-0301 of the environmental conservation law to create an educational program to encourage and educate farmers about the benefits of carbon farming prac- tices, develop and promote the application and certification procedure for verification of emission reductions credited to applicants, and to codify a metric to quantify the storage of carbon using the USDA's COMET -Planner, COMET-Farm, and other quantification tools. The department is given authority to make rules and regulations necessary to complete this. Subdivision 1 of section 19-0309 of the environmental conservation law, as amended by chapter 817 of the laws of 1987, is amended to grant the commissioner authority to issue certificates of compliance for carbon farming among other air pollution facilities and process facilities. A new subdivision 49 is added to section 16 of the agriculture and markets law to direct the commissioner to work with the department of environmental conservation to develop educational and promotional mate- rials on carbon farming practices.   JUSTIFICATION: Climate-smart land management practices improve soil resilience and increase productivity for our state's farmers while simultaneously addressing the state's climate change goals. The aim of a statewide carbon farming initiative is twofold: as a land stewardship program it would improve soil health and productivity by holding nutrients in place; as a climate-smart initiative it would mitigate carbon's release into the atmosphere as carbon dioxide (CO2). Carbon dioxide contributes to climate change as a greenhouse gas by trapping heat in the atmos- phere. A tax credit for farmers who practice land management strategies which store, or sequester, carbon in the soil is a new model for combatting climate change. Reductions in net CO2 emissions can be quantified by existing methods for measuring air pollution, especially the USDA's COMET-Planner software which was developed following the enactment of the 2014 federal Farm Bill. New York would be the first state to offer this type of tax credit, specifically for carbon farming, to all taxpay- ers who make farm products and not only the largest agricultural busi- nesses. By using no-till systems, planting cover crops, trees and perennial forages, and managing compost application, farmers can see improvements in water holding capacity, nutrient storage, and reduced erosion. All of these farming practices have the collateral benefit of sequestering carbon in the soil, thereby reducing its release into the atmosphere as CO2. The carbon farming program outlined would incentivize farmers who are currently using these strategies to continue them and would encour- age others to undertake the prescribed soil health methods now widely accepted as beneficial not only to productivity but for the reduction in greenhouse gases.   LEGISLATIVE HISTORY: New bill   FISCAL IMPLICATIONS: Undetermined   EFFECTIVE DATE: 90 days after enactment
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A03281 Text:



 
                STATE OF NEW YORK
        ________________________________________________________________________
 
                                          3281
 
                               2017-2018 Regular Sessions
 
                   IN ASSEMBLY
 
                                    January 27, 2017
                                       ___________
 
        Introduced  by M. of A. BARRETT -- read once and referred to the Commit-
          tee on Agriculture
 
        AN ACT to amend the  agriculture  and  markets  law,  the  environmental
          conservation  law  and the tax law, in relation to enacting the carbon
          farming act
 
          The People of the State of New York, represented in Senate and  Assem-
        bly, do enact as follows:
 
     1    Section  1.  This  act  shall be known and may be cited as the "carbon
     2  farming act".
     3    § 2. Legislative intent. The legislature  hereby  finds  and  declares
     4  that  soil  and vegetation management can significantly enhance soil and
     5  carbon sequestration, resulting in a wide  range  of  environmental  and
     6  agricultural  benefits  to  New  York  farmers and residents, including:
     7  increased yields; soil health; improved water quality; and reductions in
     8  greenhouse gases. The legislature further declares that enhancing carbon
     9  sequestration, the long term storage of carbon in plants, soils, geolog-
    10  ic formations and the ocean, through farming is in the best interest  of
    11  New  Yorkers.  It  is  therefore  the  intent of the legislature and the
    12  purpose of this act to encourage farmers to further sequester and  miti-
    13  gate  carbon  in this state by establishing carbon farming tax credit to
    14  reward and incentivize farmers to maintain or adopt practices that  help
    15  maximize New York's carbon sequestration potential.
    16    §  3.  Section  150  of  the agriculture and markets law is amended by
    17  adding a new subdivision 5 to read as follows:
    18    5. "Carbon farming" means the  implementation  of  a  land  management
    19  strategy  for  the  purposes  of  reducing, sequestering, and mitigating
    20  greenhouse gas emissions on land used in support of a farm operation and
    21  quantifying those  greenhouse  gas  benefits  using  the  United  States
    22  Department of Agriculture's COMET-Planner, COMET-Farm, and other quanti-
    23  fication tools.
 
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD07578-04-7

        A. 3281                             2
 
     1    §  4. Section 210-B of the tax law is amended by adding a new subdivi-
     2  sion 52 to read as follows:
     3    52. Carbon farming credit. (a) Allowance of credit. A taxpayer that is
     4  an  agricultural business that produces farm products shall be allowed a
     5  credit against the tax imposed by  this  article  for  the  practice  of
     6  carbon farming.
     7    (b)  Definitions.  For  purposes  of  this section the following terms
     8  shall have the following meanings:
     9    (i) "carbon farming" shall have the  same  meaning  as  set  forth  in
    10  subdivision  five  of  section  one hundred fifty of the agriculture and
    11  markets law;
    12    (ii) "farm products" shall have the  same  meaning  as  set  forth  in
    13  subdivision five of section two of the agriculture and markets law; and
    14    (iii)  "carbon  sequestration"  shall  mean  the  long term storage of
    15  carbon in plants and soils.
    16    (c) Such credit shall be calculated based on  the  economic  value  of
    17  carbon  farming  as  determined  by  the  commissioner  of environmental
    18  conservation, in consultation with the commissioner of  agriculture  and
    19  markets  and  the  commissioner pursuant to paragraph ccc of subdivision
    20  two of section 3-0301 of the environmental conservation law.
    21    (d) The taxpayer shall attach to its tax return its final  certificate
    22  of  eligibility issued by the commissioner of environmental conservation
    23  pursuant to section 19-0309 of the environmental conservation law. In no
    24  event shall the taxpayer be allowed a credit greater than the amount  of
    25  the  credit  listed  on  the  final  certificate verifying the emissions
    26  reductions to be credited to the taxpayer.
    27    (e) If the amount of the credit allowable under this  subdivision  for
    28  any  taxable  year  shall  exceed  the taxpayer's tax for such year, any
    29  amount of credit not deductible in such taxable year may be carried over
    30  to the following three years, and may be deducted for the  taxpayer  for
    31  such year.
    32    §  5. Section 606 of the tax law is amended by adding a new subsection
    33  (hhh) to read as follows:
    34    (hhh) Carbon farming credit. (1) Allowance of credit. A  taxpayer  who
    35  provides farm products and who practices carbon farming shall be allowed
    36  a credit against the tax imposed by this article.
    37    (2)  Definitions.  For  the purposes of this subsection, the following
    38  definitions shall apply:
    39    (A) "Farm products" shall have the same meaning as set forth in subdi-
    40  vision five of section two of the agriculture and markets law.
    41    (B) "Carbon farming" shall have the  same  meaning  as  set  forth  in
    42  subdivision  five  of  section  one hundred fifty of the agriculture and
    43  markets law.
    44    (3) Application of credit. Such credit shall be  calculated  based  on
    45  the  economic  value of carbon farming as determined by the commissioner
    46  of environmental conservation, in consultation with the commissioner  of
    47  agriculture  and markets pursuant to paragraph ccc of subdivision two of
    48  section 3-0301 of the environmental conservation law.
    49    (4) Certification required. The  taxpayer  shall  attach  to  its  tax
    50  return  its  final certificate of eligibility issued by the commissioner
    51  of environmental conservation pursuant to section 19-0309 of  the  envi-
    52  ronmental  conservation law. In no event shall the taxpayer be allowed a
    53  credit greater than the amount of the credit listed on the final certif-
    54  icate verifying the emissions reductions to be credited to the taxpayer.
    55    (5) Carryover of credit. If the amount of the credit  allowable  under
    56  this subsection for any taxable year shall exceed the taxpayer's tax for

        A. 3281                             3
 
     1  such  year, any amount of credit not deductible in such taxable year may
     2  be carried over to the following three years, and may  be  deducted  for
     3  the taxpayer for such year.
     4    § 6. Subdivision 2 of section 3-0301 of the environmental conservation
     5  law is amended by adding a new paragraph ccc to read as follows:
     6    ccc.  Cooperate  with  the  department  of  agriculture and markets to
     7  develop educational materials to promote and encourage  carbon  farming.
     8  Such  materials  shall promote farming practices which reduce, sequester
     9  and mitigate greenhouse gas  emissions  through  the  implementation  of
    10  carbon  farming  strategies and on land used in support of a farm opera-
    11  tion; and develop and codify a metric to quantify the storage of  carbon
    12  using  the  United  States  Department  of  Agriculture's COMET-Planner,
    13  COMET-Farm, and other quantification tools. The department shall develop
    14  and distribute an application and certification procedure which verifies
    15  the carbon stored to be  credited  to  each  farm.  The  department  may
    16  promulgate rules and regulations necessary to implement this section.
    17    §  7.  Subdivision 1 of section 19-0309 of the environmental conserva-
    18  tion law, as amended by chapter 817 of the laws of 1987, is  amended  to
    19  read as follows:
    20    1.  For the purposes of sections 208, 210, 606 and 612 of the Tax Law,
    21  the commissioner or his designated representative is  hereby  authorized
    22  to  issue  certificates  of  compliance concerning air pollution control
    23  facilities [and], air pollution controlled process facilities and carbon
    24  farming as defined in such law. No  such  certificate  shall  be  issued
    25  unless  the  facility  to  which  it is applicable is in compliance with
    26  applicable provisions of titles 1 to 11,  inclusive,  and  title  19  of
    27  article  17,  article  19, and title 1 of article 27 of this chapter; of
    28  the Public Health Law; of the state sanitary code and of  codes,  rules,
    29  regulations, permits or orders issued pursuant thereto.
    30    §  8.  Section  16  of  the  agriculture and markets law is amended by
    31  adding a new subdivision 49 to read as follow:
    32    49. Cooperate with the department  of  environmental  conservation  to
    33  develop    educational  materials to encourage carbon farming and how to
    34  use the United States Department of Agriculture's COMET-Planner,  COMET-
    35  Farm,  and other carbon quantification tools.  The program shall promote
    36  farming practices which reduce, sequester and  mitigate  greenhouse  gas
    37  emissions  on  land used in support of a farm operation.  The department
    38  shall promote the carbon farming tax credit  provided  in  sections  two
    39  hundred ten-b and six hundred six of the tax law.
    40    §  9.  This  act shall take effect on the ninetieth day after it shall
    41  have become a law; provided, however, that  effective  immediately,  the
    42  addition,  amendment,  and/or repeal of any rule or regulation necessary
    43  for the implementation of this act on its effective date are  authorized
    44  and directed to be made and completed on or before such effective date.
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