TAX CREDITS FOR BIOFUEL PRODUCERS PROPOSED

by State Rep. Mike Strain, District 74
Covington, LA
I have prefiled House Bill 551 to provide refundable tax credits from Louisiana income or corporation franchise taxes for manufacturers, producers, distributors, and retailers of certain biofeuels.
The purpose of the legislation is to encourage the development of the ethanol, biodiesel, and alternate renewable fuel industry and agricultural production in the state. As our agriculture community struggles to survive, we must explore all avenues to assist it. I believe this fuel industry will definitely have a positive impact on agriculture in our state and may well be exactly what is needed to stop the erosion of this vitally important segment of our economy. The products produced in our state are a natural fit for the alternate fuels industry.
Under the bill, the credit would be 20 cents per gallon for biodiesel, ethanol, and alternate renewable fuel, and 30 cents per gallon for ethanol produced from cellulose. All must be produced in a qualifying Louisiana biofuel facility.
The credit applies to the first 25 million gallons of ethanol produced from cellulose each taxable year, not to exceed $7.5 million of credit per facility per taxable year. The credit for biodiesel, ethanol, and alternate renewable fuel cannot exceed $5 million per facility per taxable. Credits for all fuels will apply until the 10th anniversary of the date production at the facility begins.
Further, the facilities must meet or exceed Federal Quality Standards for these fuels and ethanol produced from cellulose must meet Louisiana biofuel eligibility requirements and the tax credits shall not exceed 40 percent of costs incurred for tank cleaning, tank modifications, equipment, and capital improvements necessary to accommodate the sale of ethanol, biodiesel, and alternate renewable fuel not to exceed $10,000 per tank.
In order for a facility to qualify, Louisiana farmers must have at least a 20 percent ownership interest and must use at least 50 percent Louisiana-grown feedstocks to produce ethanol.
The bill has tentatively been referred to the House Ways & Means Committee.