Major 'biodiesel impact' bills of 2003

A report circulated by the National Biodiesel Board has identified 18 states that, collectively, passed 25 biodiesel impact bills in 2003. Below, Biodiesel Magazine has compiled an abridged state legislation list, providing summaries of bills that most directly affect production.
By | January 28, 2004
Referred to as the "Biodiesel Incentive Act," Arkansas recently passed legislation that provides an income tax credit to biodiesel suppliers equal to 5 percent of the cost of facilities and equipment used for wholesale or retail distribution of biodiesel or biodiesel-blended fuel. Suppliers of biodiesel derived from both plant oil and/or animal oil qualify for the tax break. The legislation also provides a 10-cent-per-gallon grant to qualified producers. Grants are limited to the first five million gallons of biodiesel produced, not to exceed five years. Biodiesel is defined by the ASTM specification.
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The state's renewable fuels tax incentive trims the 6.25-percent per gallon diesel fuel tax to 5 percent on blends of B1 to B10. For biodiesel blends over B10, the sales tax is totally removed. Another piece of legislation offers grants to alternative fuel producers (both ethanol and biodiesel) for plant construction or modification. However, it requires the facility to have at least a 30-mmgy capacity.
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Indiana has income tax credits for producers, blenders or retailers of biodiesel. The legislation is capped at $1 million per incentive over two years (2004-2005). The producer credit is equal to $1 per gallon of biodiesel produced in Indiana and used to make blended biodiesel (B2-B99). The blender credit (above B2) is 2-cents per gallon, if using Indiana biodiesel. The retailer credit is 1-cent-per-gallon. There is no restriction on state production.
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Recent Kansas legislation restricts claims of biodiesel to blends of B2 or higher. Also, all of the state's diesel-powered vehicles and equipment must use B2, but only if it costs no more than 10-cents per gallon more than No. 2 diesel fuel.
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MaineRecent legislation defines biodiesel by EPA registration and ASTM specification. The law states: "Biodiesel fuel" means renewable fuel composed of mono-alkyl esters of long chain fatty acids derived from vegetable oils or animal fats that is registered with the United States Environmental Protection Agency as a fuel and a fuel additive under the federal Clean Air Act and as otherwise specified in the American Society for Testing and Materials (specification).
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Recent legislation in Mississippi has added biodiesel to "cash payment law" for producers of ethanol, wet alcohol and others. However, biodiesel is undefined and there is no implementation language. Biodiesel supporters hope to see that clarified in the state's next legislative session but question whether it will happen.
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Michigan recently legislated a tax abatement for biodiesel production plants. Plant rehabilitation and industrial development districts may be established to provide property tax abatements for up to 12 years. "Industrial property" would include the creation or synthesis of biodiesel fuel. Additionally, until 2007, an electric generating plant fueled by biomass would qualify.
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North Dakota
North Dakota has a 10-percent tax credit on equipment for biodiesel producers and/or blenders. The legislation also includes a 1.05-cent excise reduction on B2 after eight million gallons of annual capacity is established in the state. The excise language was already law, but was scheduled to sunset June 2003.
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Nevada lawmakers added biodiesel to the definition of alternative fuel, but only B5 to B20. The language says fuels that meet ASTM specifications are eligible.
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South Dakota
Recent legislation in South Dakota outlined the definition of biodiesel under ASTM specifications and put the definition into law.
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Texas now provides a net grant of 16.4-cents-per-gallon to producers for a period of 10 years. The grant is capped at $3.6 million per plant.
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The state of Washington provides tax incentives for biodiesel and alcohol fuel production. The legislation provides a tax incentive for investments associated with distribution and retail sale of biodiesel. There are no taxes on equipment and ingredients until 2009, granted the equipment is used for at least 75 percent biodiesel distribution. Additional legislation encourages state agencies to use B20 and creates a state agency mandate to use B2 starting in 2006. Furthermore, lawmakers created a biodiesel-ultra low sulfur diesel pilot project for school transportation.
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