A tax credit for aviation biofuel manufacturing, authorizing the state to contract public debt for an aviation biofuel project grant, and making an appropriation. (FE)

Under the bill, WEDC may certify businesses to claim income and franchise tax credits if the business engages in an aviation biofuel project in an aviation biofuel manufacturing zone. If the amount of the credit for which the business is eligible exceeds its tax liability, the bill allows the business to carry forward the unused amount to offset tax liability in future tax years, until the business is able to use the entire amount. The total amount of all tax credits WEDC may certify under the bill is $60,000,000. WEDC may, no later than five years after a year in which WEDC certifies a business for tax credits, seek repayment of tax credits for failure to comply with an agreement entered into with WEDC. WEDC must revoke a certification to claim tax credits if a certified business does any of the following:

1. Supplies false or misleading information to obtain tax credits.

2. Leaves an aviation biofuel manufacturing zone to conduct substantially the same business outside of the aviation biofuel manufacturing zone.

3. Ceases operations in an aviation biofuel manufacturing zone and does not renew operation of the business or a similar business in the aviation biofuel manufacturing zone within 12 months of the cessation of operations.

A business certified for tax credits under the bill must submit quarterly reports to WEDC and the legislature that include information about the business’s workforce impact.

Aviation biofuel grant Under the bill, the legislature finds and determines that the manufacturing of aviation biofuels in this state is essential to maintain and grow the forest products industry in this state and to create jobs; that supporting the growth of the aviation biofuels industry is a statewide responsibility of statewide dimension; and that it is in the public interest, and it is the public policy of this state, to assist with the construction of an aviation biofuel manufacturing project in this state.

The bill requires the state to contract public debt in the amount of $150,000,000 for the purpose of awarding a grant in fiscal year 2025-26, subject to certain conditions, to fund the aviation biofuel project in the aviation biofuel manufacturing zone. The conditions on the grant are that the grantee agrees to use the facility constructed with the grant only for the purpose of manufacturing aviation biofuels until the latest maturity date of the bonds issued to contract public debt for the grant; the grantee agrees that, of the biomass it uses to produce aviation biofuels at any facility constructed with the grant, 80 percent, as measured by aggregate volume over a 5-year period, will be sourced in this state; and the grantee agrees to make an investment of not less than $1,500,000,000 in economic activities related to manufacturing aviation biofuel in this state within five years. If the grantee violates any of these conditions, the bill requires the grantee to pay DNR the amount of the grant awarded. Under the bill, any such amounts paid to DNR accrue to the conservation fund and are appropriated, along with moneys from the forestry account of the conservation fund, to repay the principal and interest incurred in financing the grant.

Under the bill, the requirement to use a grant-funded facility for aviation biofuel manufacturing is not violated if the grantee uses the facility to manufacture biofuels other than aviation biofuel as long as a majority of the biofuel manufactured at all of the facilities constructed with the grant is aviation biofuel.