House Bill 1660

AN ACT TO PROVIDE AN INCOME TAX CREDIT FOR CERTAIN BIODIESEL PRODUCTION FACILITIES IN THE STATE OF MISSISSIPPI; TO DEFINE CERTAIN TERMS USED IN THE ACT; TO LIMIT THE AMOUNT OF THE CREDIT THAT MAY BE CLAIMED IN A TAXABLE YEAR; TO PROVIDE THAT ANY UNUSED PORTION OF THE CREDIT MAY BE CARRIED FORWARD FOR THE SUCCEEDING FIVE TAX YEARS; AND FOR RELATED PURPOSES.

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

SECTION 1. (1) As used in this section, the following words and phrases have the meanings ascribed in this subsection unless the context clearly indicates otherwise:

(a) "Biodiesel facility" means a plant or facility located within the State of Mississippi which primarily is engaged in the production of biodiesel derived from animal fats, grain components, coproducts or by-products.

(b) "Name plate design capacity" means the original designed capacity of a biodiesel facility, which capacity may be specified as gallons of biodiesel produced per year.

(2) For tax years beginning after December 31, 2011, and before January 1, 2020, there shall be allowed a credit against the tax imposed by this chapter for any biodiesel facility that is in production at the rate of at least twenty five percent (25%) of its name plate design capacity for the production of biodiesel on or before December 31, 2015. The completion of the construction of such facilities must be after July 1, 2012. The credit shall be in the amount of Twenty Cents (20¢) per gallon of biodiesel produced and shall be allowed for sixty (60) months beginning with the first month for which the facility is eligible to receive the credit and ending not later than December 31, 2019. The credit may be claimed only if the biodiesel facility maintains an average production rate of at least twenty five percent (25%) of its name plate design capacity for at least six (6) months after the first month for which it is eligible to receive the credit.

(3) Any biodiesel facility eligible for a tax credit under subsection (2) of this section also shall receive a credit against the tax imposed by this chapter in the amount of Twenty Cents (20¢) per gallon of biodiesel produced in excess of the original name plate design capacity which results from expansion of the facility completed on or after July 1, 2012, and before December 31, 2015. The tax credit shall be allowed for sixty (60) months beginning with the first month for which production from the expanded facility is eligible to receive the tax credit and ending not later than December 31, 2019.

(4) (a) For purposes of this subsection, the term "new production" means production that results from a new facility, a facility that has not received credits before January 1, 2020, or the expansion of the capacity of an existing facility by at least two million (2,000,000) gallons first placed into service after January 1, 2020, as certified by the design engineer of the facility to the Department of Revenue.

(b) Beginning January 1, 2020, a biodiesel facility shall receive a credit against the tax imposed by this chapter in the amount of Seven and One-half Cents (7-1/2¢) per gallon of biodiesel for new production for a period not to exceed thirty six (36) consecutive months.

(c) For expansion of the capacity of an existing facility, the term "new production" means annual production in excess of twelve (12) times the monthly average of the highest three (3) months of biodiesel production at a biodiesel facility during the twenty four month period immediately preceding certification of the facility by the design engineer.

(d) No credits shall be allowed under this subsection for expansion of the capacity of an existing facility until production is in excess of twelve (12) times the three month average amount determined under this subsection during any twelve consecutive month period beginning no sooner than January 1, 2020.

(e) The amount of a credit granted pursuant to this subsection based on new production shall be approved by the department based on such biodiesel production records as may be necessary to reasonably determine the level of new production.

(5) (a) The credits described in this section shall be given only for biodiesel produced at a plant in this state at which all biodiesel esterification takes place.

(b) Not more than twenty five million (25,000,000) gallons of biodiesel produced annually at a biodiesel facility shall be eligible for the credits in subsections (2) and (3) of this section, and the credits may be claimed only by a producer for the periods specified in subsections (2) and (3) of this section.

(c) Not more than ten million (10,000,000) gallons of biodiesel produced during any twelve consecutive month period at a biodiesel facility shall be eligible for the credit described in subsection (4) of this section, and the credit may be claimed only by a producer for the periods specified in subsection (4) of this section.

(d) Not more than one hundred twenty-five million (125,000,000) gallons of biodiesel produced at a biodiesel facility by the end of the sixty month period set forth in subsection (2) or (3) of this section shall be eligible for the credit under such subsection. A biodiesel facility which receives a credit for biodiesel produced under subsection (2) or (3) of this section shall not receive a credit under subsection (4) of this section until its eligibility to receive a credit under subsection (2) or (3) of this section has been completed.

(6) The Department of Revenue shall prescribe an application form and promulgate rules for claiming credits under this section.

(7) For purposes of ascertaining the correctness of any application for claiming a credit provided in this section, the department may examine or cause to have examined, by any agent or representative designated for that purpose, any books, papers, records or memoranda bearing upon such matters.

(8) If the credit allowed pursuant to this section exceeds the amount of income taxes due or if there are no state income taxes due on the income of the taxpayer, the amount of the credit allowed but not used in any tax year may be carried forward as a credit against subsequent income tax liability for a period not exceeding five (5) years.

SECTION 2. Section 1 of this act shall be codified as a new section in Chapter 7, Title 27, Mississippi Code of 1972.

SECTION 3. Nothing in this act shall affect or defeat any claim, assessment, appeal, suit, right or cause of action for taxes due or accrued under the income tax laws before the date on which this act becomes effective, whether such claims, assessments, appeals, suits or actions have been begun before the date on which this act becomes effective or are begun thereafter; and the provisions of the income tax laws are expressly continued in full force, effect and operation for the purpose of the assessment, collection and enrollment of liens for any taxes due or accrued and the execution of any warrant under such laws before the date on which this act becomes effective, and for the imposition of any penalties, forfeitures or claims for failure to comply with such laws.

SECTION 4. This act shall take effect and be in force from and after July 1, 2012.