HOUSE DOCKET, NO. 844        FILED ON: 1/13/2009

HOUSE  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  No. 2785

The Commonwealth of Massachusetts

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In the Year Two Thousand Nine

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An Act relative to a biofuel production tax credit..

Be it enacted by the Senate and House of Representatives in General Court assembled, and by the authority of the same, as follows:
 

SECTION 1. Chapter 63 of the General Laws, as most recently amended by chapter 312 of the Acts of 2008, is hereby amended by adding the following new section:-

Section 38AA.  (a)A taxpayer engaged in the production of eligible cellulosic biofuels in the commonwealth, as defined in section 1 of chapter 64A, shall be allowed a credit against the taxes imposed by this chapter on income derived during the taxable year from the production of eligible cellulosic biofuel for increases in annual production during the first 3 years of production.  For the purposes of this section, the production year is the period from July 1 of the current year to June 30 of the succeeding year.

(b) Except as provided in subsection (c), the credit allowed on each gallon of increased cellulosic biofuel production that replaces the use of petroleum or liquid fuels derived from other fossil carbon sources over the previous year, in accordance with paragraph (a), is 10 cents a gallon for each gallon of increased production.  In blends with petroleum or other non-cellulosic biofuels, the credit is allowed only on the portion of that blend that the cellulosic biofuel constitutes.

(c) The credit allowed in subsection (b) may be claimed for:      (1) the first year's total production;      (2) the production in the second year that exceeds production in the first year; and      (3) the production in the third year that exceeds production in the second year. (d)  The tax credit shall be taken against taxes imposed under this chapter and shall not be refundable.  Any amount of tax credit that exceeds the tax due for a taxable year may be carried forward by the taxpayer to any of the 5 subsequent taxable years.

(e) Cellulosic biofuels for which the credit is allowed must meet state and federal regulatory requirements applicable to the nature and intended use of the fuel produced, and shall be classified as “eligible cellulosic biofuels” in accordance with the provisions of section 1A of chapter 64A.

(f) The commissioner, in consultation with the secretary, shall promulgate regulations necessary for the administration of this subsection.