A08072 Summary:

BILL NOA08072
 
SAME ASNo Same As
 
SPONSORWalker
 
COSPNSRSepulveda
 
MLTSPNSR
 
Ren S28 to be S38-a, amd SS38-a, 187-c, 606 & 210-B, Tax L
 
Relates to biofuel production credit for production of biomethane, a biodiesel fuel.
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A08072 Actions:

BILL NOA08072
 
06/05/2015referred to ways and means
01/06/2016referred to ways and means
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A08072 Memo:

NEW YORK STATE ASSEMBLY
MEMORANDUM IN SUPPORT OF LEGISLATION
submitted in accordance with Assembly Rule III, Sec 1(f)
 
BILL NUMBER: A8072
 
SPONSOR: Walker
  TITLE OF BILL: An act to amend the tax law, in relation to biofuel production credit for production of biomethane   PURPOSE OR GENERAL IDEA OF BILL: Relates to production credit for production of biomethane   SUMMARY OF PROVISION: Section 1 renumbers section 38-a to Section 28 of the tax law, as added by section 1 of part X of chapter 62 of the laws of 2006 that estab- lishes a new credit of twenty-five cents per gallon for production of biomethane after the production of the first forty thousand gallons per year presented to market Section 2 defines the term "biomethane" Section 3 amends Section 187-c of the tax law, as amended by section 2 of part K of chapter 59 of the laws of 2012, with regards to the biofuel production credit Section 4 also amends Section 187-c of the tax law, as amended by section 15 of part S of chapter 59 of the laws of 2014, with regards to the biofuel production credit Section 5 amends 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, with regards to the biofuel production credit Section 6 amends subdivision (jj) of section 606 of the tax law, as amended by section 4 of part K of chapter 59 of the laws of 2012, with regards to the biofuel production credit Section 7 amends 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, with regards to the biofuel production credit Section 8 provides that this act shall take effect immediately.   JUSTIFICATION: Renewable Natural Gas, also known as RNG or biomethane, is chemically identical to fossil natural gas but much cleaner, and the first commer- cially viable, sustainable transportation fuel that can greatly reduce consumption of diesel fuel. RNG is made from biogases that emit as organic waste that break down in environments with no air. It is produced from many biomass and biogas sources including municipal waste- water, landfill gas, and solid waste. It is a renewable fuel that can be used from light-duty vehicles to heavy-duty freight trucks. Buses and trucks make up just 4% of all vehicles but they use 23% of all highway fuel that is almost all high-carbon diesel produced from foreign sources of oil. With today's technologies, organic wastes thrown away daily in cities and towns in New York State could be turned into fuel. National estimates are that organic wastes could displace 16% of all diesel fuel consumed in the United States. RNG slashes carbon emissions to near zero. This biomethane production tax credit will help improve the environment by making better use of waste and conserving natural resources. New York State's municipal waste stream could be reduced by nearly 30% through greater production of RNG.   PRIOR LEGISLATIVE HISTORY: 2013-14: S.7452 (Gipson) - Referred to Investigations and Government Operations   FISCAL IMPLICATIONS: None to the State   EFFECTIVE DATE: Immediate
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A08072 Text:



 
                STATE OF NEW YORK
        ________________________________________________________________________
 
                                          8072
 
                               2015-2016 Regular Sessions
 
                   IN ASSEMBLY
 
                                      June 5, 2015
                                       ___________
 
        Introduced by M. of A. WALKER -- read once and referred to the Committee
          on Ways and Means
 
        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:
 
     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, is renumbered section 38-a.
     3    § 2. Subdivisions (a) and (b) of section 38-a of the tax law, subdivi-
     4  sion (a) as amended by section 1 of part K of chapter 59 of the laws  of
     5  2012,  subdivision  (b) as added by section 1 of part X of chapter 62 of
     6  the laws of 2006, such section as renumbered by section one of this act,
     7  are amended to read as follows:
     8    (a) General. A taxpayer subject to tax under article nine,  nine-A  or
     9  twenty-two  of  this  chapter shall be allowed a credit against such tax
    10  pursuant to  the  provisions  referenced  in  subdivision  (d)  of  this
    11  section. The credit (or pro rata share of earned credit in the case of a
    12  partnership)  for  each gallon of biofuel produced at a biofuel plant on
    13  or after January first, two thousand six shall equal fifteen  cents  per
    14  gallon  or  twenty-five  cents  per  gallon for production of biomethane
    15  after the production of  the  first  forty  thousand  gallons  per  year
    16  presented  to  market.  The credit under this section shall be capped at
    17  two and one-half million dollars per taxpayer per taxable year for up to
    18  no more than four consecutive taxable years per biofuel  plant.  If  the
    19  taxpayer  is  a  partner in a partnership or shareholder of a New York S
    20  corporation, then the cap imposed by the  preceding  sentence  shall  be
    21  applied at the entity level, so that the aggregate credit allowed to all
    22  the  partners  or  shareholders  of each such entity in the taxable year
    23  does not exceed two and one-half million dollars. The tax credit allowed
    24  pursuant to this section shall apply to taxable years  beginning  before
    25  January first, two thousand twenty.
 
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD06529-01-5

        A. 8072                             2
 
     1    (b)  Definitions. For the purpose of this section, the following terms
     2  shall have the following meanings:
     3    (1)  "Biofuel" means a fuel which includes biodiesel [and], ethanol or
     4  biomethane.
     5    (2) The term "biodiesel" shall mean a fuel  comprised  exclusively  of
     6  mono-alkyl  esters of long chain fatty acids derived from vegetable oils
     7  or animal fats, designated B100, which meets the specifications of Amer-
     8  ican Society of Testing and Materials designation D 6751-02.
     9    (3) The term "ethanol" shall mean ethyl alcohol  manufactured  in  the
    10  United  States  and  its territories and sold (i) for fuel use and which
    11  has been rendered unfit for beverage  use  in  a  manner  and  which  is
    12  produced at a facility approved by the federal bureau of alcohol, tobac-
    13  co and firearms for the production of ethanol for fuel, or (ii) as dena-
    14  tured  ethanol  used  by  blenders  and refiners which has been rendered
    15  unfit for beverage use.  The term "biofuel" may also include  any  other
    16  standard  approved by the New York state energy and research development
    17  authority.
    18    [(2)] (4) The term "biomethane" shall mean biogases that  are  emitted
    19  as organic wastes that break down in airless environments. Biomethane is
    20  produced  from  a  variety  of  biomass and/or biogas sources, including
    21  landfill gas, solid waste, municipal wastewater and agricultural  manure
    22  via  airless  tanks  called anaerobic digesters. It can also be produced
    23  from other sources such as forestry and agricultural waste  through  the
    24  process of thermal gasification and methanation, although these technol-
    25  ogies  are  not  yet widely used. Biomethane is a renewable fuel, easily
    26  distributed through existing infrastructure and is suitable for applica-
    27  tions from light-duty vehicles to heavy-duty freight trucks.
    28    (5) "Biofuel plant" means a commercial facility located  in  New  York
    29  state  at  which one or more biofuels are produced.  For the purposes of
    30  this section, any commercial facility where biomethane is produced shall
    31  be considered a separate biofuel plant.
    32    § 3. Section 187-c of the tax law, as amended by section 2 of  part  K
    33  of chapter 59 of the laws of 2012, is amended to read as follows:
    34    §  187-c.  Biofuel  production  credit.  A taxpayer shall be allowed a
    35  credit to be computed as  provided  in  section  [twenty-eight]  thirty-
    36  eight-a of this chapter, [as added by part X of chapter sixty-two of the
    37  laws  of  two  thousand  six,]  against the tax imposed by this article.
    38  Provided, however, that the amount of such credit  allowed  against  the
    39  tax  imposed by section one hundred eighty-four of this article shall be
    40  the excess of the amount of such credit over the amount  of  any  credit
    41  allowed  by  this section against the tax imposed by section one hundred
    42  eighty-three of this article. In no event shall the  credit  under  this
    43  section  be  allowed  in  an amount which will reduce the tax payable to
    44  less than the applicable minimum tax fixed by section one hundred eight-
    45  y-three or one hundred eighty-five of this  article.  If,  however,  the
    46  amount  of  the  credit  allowed under this section for any taxable year
    47  reduces the tax to such amount, the excess shall be treated as an  over-
    48  payment  of  tax  to  be  credited  or  refunded  in accordance with the
    49  provisions of section six hundred eighty-six of this chapter.  Provided,
    50  however, the provisions of subsection (c) of section one thousand eight-
    51  y-eight of this chapter notwithstanding, no interest shall be paid ther-
    52  eon.  The  tax  credit  allowed  pursuant to this section shall apply to
    53  taxable years beginning before January first, two thousand twenty.
    54    § 4. Section 187-c of the tax law, as amended by section 15 of part  S
    55  of chapter 59 of the laws of 2014, is amended to read as follows:

        A. 8072                             3
 
     1    §  187-c.  Biofuel  production  credit.  A taxpayer shall be allowed a
     2  credit to be computed as  provided  in  section  [twenty-eight]  thirty-
     3  eight-a of this chapter, [as added by part X of chapter sixty-two of the
     4  laws  of  two  thousand  six,]  against the tax imposed by this article.
     5  Provided,  however,  that  the amount of such credit allowed against the
     6  tax imposed by section one hundred eighty-four of this article shall  be
     7  the  excess  of  the amount of such credit over the amount of any credit
     8  allowed by this section against the tax imposed by section  one  hundred
     9  eighty-three  of  this  article. In no event shall the credit under this
    10  section be allowed in an amount which will reduce  the  tax  payable  to
    11  less than the applicable minimum tax fixed by section one hundred eight-
    12  y-three  of  this article. If, however, the amount of the credit allowed
    13  under this section for any taxable year reduces the tax to such  amount,
    14  the  excess  shall be treated as an overpayment of tax to be credited or
    15  refunded in accordance with the provisions of section six hundred eight-
    16  y-six of this chapter. Provided, however, the provisions  of  subsection
    17  (c)  of  section one thousand eighty-eight of this chapter notwithstand-
    18  ing, no interest shall be paid thereon. The tax credit allowed  pursuant
    19  to  this  section  shall apply to taxable years beginning before January
    20  first, two thousand twenty.
    21    § 5. Subsection (jj) of section 606 of the  tax  law,  as  amended  by
    22  section  4  of  part  K of chapter 59 of the laws of 2012, is amended to
    23  read as follows:
    24    (jj) Biofuel production credit. A taxpayer shall be allowed  a  credit
    25  to  be  computed as provided in section [twenty-eight] thirty-eight-a of
    26  this chapter, [as added by part X of chapter sixty-two of  the  laws  of
    27  two  thousand  six,]  against  the  tax  imposed by this article. If the
    28  amount of the credit allowed under this subsection for any taxable  year
    29  shall  exceed  the  taxpayer's  tax  for  such year, the excess shall be
    30  treated as an overpayment of tax to be credited or refunded  in  accord-
    31  ance with the provisions of section six hundred eighty-six of this arti-
    32  cle,  provided, however, that no interest shall be paid thereon. The tax
    33  credit allowed pursuant to this section shall  apply  to  taxable  years
    34  beginning before January first, two thousand twenty.
    35    §  6.  Subdivision  24  of  section  210-B of the tax law, as added by
    36  section 17 of part A of chapter 59 of the laws of 2014,  is  amended  to
    37  read as follows:
    38    24.  Biofuel  production  credit.  (a)  General.  A  taxpayer shall be
    39  allowed a credit, to be computed as provided in  section  [twenty-eight]
    40  thirty-eight-a  of this chapter [added as part X of chapter sixty-two of
    41  the laws of two thousand six,] against the tax imposed by this  article.
    42  The credit allowed under this subdivision for any taxable year shall not
    43  reduce  the  tax due for such year to less than the fixed dollar minimum
    44  amount prescribed in paragraph (d) of subdivision  one  of  section  two
    45  hundred  ten  of  this article. However, if the amount of credit allowed
    46  under this subdivision for any taxable year  reduces  the  tax  to  such
    47  amount  or  if the taxpayer otherwise pays tax based on the fixed dollar
    48  minimum amount, any amount of credit thus not deductible in such taxable
    49  year shall be treated as  an  overpayment  of  tax  to  be  credited  or
    50  refunded  in  accordance  with  the  provisions  of section one thousand
    51  eighty-six  of  this  chapter.  Provided,  however,  the  provisions  of
    52  subsection  (c)  of  section  one  thousand eighty-eight of this chapter
    53  notwithstanding, no interest shall  be  paid  thereon.  The  tax  credit
    54  allowed  pursuant to this section shall apply to taxable years beginning
    55  before January first, two thousand twenty.

        A. 8072                             4
 
     1    § 7. This act shall take effect immediately; provided however that the
     2  amendments to section 187-c of the tax law made by section four of  this
     3  act  shall take effect on the same date as section 15 of part S of chap-
     4  ter 59 of the laws of 2014 takes  effect;  provided,  further  that  the
     5  amendment  to  subdivision  24  of  section 210-B of the tax law made by
     6  section six of this act shall take effect on  the  same  date  and  same
     7  manner  as section 17 of part A of chapter 59 of the laws of 2014, takes
     8  effect.
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