Senate Bill 3111

(COMMITTEE SUBSTITUTE)

AN ACT TO AUTHORIZE AN INCOME TAX CREDIT FOR TAXPAYERS IN THE BUSINESS OF DISTRIBUTING MOTOR FUEL IN THE AMOUNT OF 25% OF THE COST OF NONMOVABLE EQUIPMENT FOR THE DISTRIBUTION OF BIODIESEL AND THE COST OF INSTALLATION OF SUCH EQUIPMENT; TO REQUIRE THAT THE CREDIT MAY NOT BE CLAIMED UNTIL THE NONMOVABLE EQUIPMENT HAS BEEN UTILIZED EXCLUSIVELY FOR THE DISTRIBUTION OF BIODIESEL FOR NOT LESS THAN 12 CONSECUTIVE MONTHS; TO PROVIDE THAT ANY TAX CREDIT CLAIMED UNDER THIS ACT BUT NOT USED MAY BE CARRIED FORWARD FOR FIVE CONSECUTIVE TAXABLE YEARS; TO PROVIDE THAT THE CREDIT UTILIZED IN ANY YEAR SHALL BE LIMITED TO AN AMOUNT NOT GREATER THAN THE TOTAL STATE INCOME TAX LIABILITY OF THE TAXPAYER; AND FOR RELATED PURPOSES.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:

SECTION 1. (1) A taxpayer in the business of distributing motor fuel shall be allowed a credit against the taxes imposed by this chapter in the amount of twenty-five percent (25%) of the expenses that he incurred for the cost of nonmovable equipment that he purchased for the distribution of biodiesel and for the cost of installation of such equipment. The credit may not be claimed until the nonmovable equipment has been utilized exclusively for the distribution of biodiesel for not less than twelve (12) consecutive months. The credit may be claimed for the taxable year in which the twelfth consecutive month of use of the equipment for the distribution of biodiesel occurs.

(2) Any tax credit claimed under this section but not used in any taxable year may be carried forward for five (5) consecutive years from the close of the tax year in which the credits were earned. The credit that may be utilized each year shall be limited to an amount not greater than the total state income tax liability of the taxpayer.

(3) As used in this section:

(a) "Biodiesel" means:

(i) A fuel composed of mono-alkyl esters of long-chain fatty acids generally derived from vegetable oils, animal fats or biomass designated B100, and meeting the requirements of American Society of Testing Materials (ASTM) designation D-6751; or

(ii) A fuel which meets the registration requirements for fuels and fuel additives established under 40 CFR part 79, is not a mono-alkyl ester, is intended for use in engines that are designed to run on conventional petroleum derived diesel fuel and is derived or refined in a unit that normally processes gasoline or diesel from crude oil from nonpetroleum renewable resources, including, but not limited to, biomass, animal wastes, including poultry fats and poultry wastes, and other waste materials, or municipal solid waste and sludges and oils derived from wastewater and the treatment of wastewater.

(b) "Biomass" means:

(i) Any organic material grown for the purpose of being converted to energy;

(ii) Any organic byproduct of agriculture (including wastes from food production and processing) that can be converted into energy; or

(iii) Any waste material that can be converted to energy, is segregated from other waste materials and is derived from:

1. Any of the following forest-related resources: mill residues, precommercial or commercial thinnings, slash, brush, or otherwise nonmerchantable or merchantable material; or

2. Wood waste materials, including waste pallets, crates, dunnage, manufacturing and construction wood wastes (other than pressure-treated, chemically treated, or painted wood wastes), and landscape or right-of-way tree trimmings, but not including municipal solid waste, gas derived from the biodegradation of municipal solid waste or paper that is commonly recycled.

SECTION 2. The provisions of Section 1 of this act shall be codified in Chapter 7, Title 27, Mississippi Code of 1972.

SECTION 3. This act shall take effect and be in force from and after July 1, 2007.