Committee adopts amendment to expand Minnesota SAF tax allocation; supporters tout jobs and decarbonization, critics warn on corn and water impacts

The House Taxes Committee on March 6 approved the H.1669 DE1 amendment to House File 1669, a bill to modify Minnesota's sustainable aviation fuel (SAF) tax credit. The amendment increases the allocation available for SAF credits in early years, clarifies the credit rollover mechanism and extends the sunset date for the existing credit, and the committee laid the bill over for possible inclusion in the omnibus tax bill.

House Research and revenue staff summarized the amendment's fiscal effect: "The amendment does increase the allocations available for the SAF fuel credit. The fiscal impact to the general fund is $10,600,000 in fiscal 2027 and $2,100,000 in fiscal 2028-29," a staff member told the committee.

Supporters said the state'level credit (enacted in 2023) and the proposed expansion are central to creating a Minnesota SAF hub that could attract billions in private investment and thousands of jobs. Department of Revenue Commissioner Paul Marquart testified the governor supports the bill and said it will help build sustainable aviation-fuel production capacity and jobs; he referenced a $5 billion DG Fuels manufacturing facility announcement in Moorhead that could produce about 193 million gallons of SAF annually if realized.

Airlines and the airport commission urged passage. Jeff Davidman of Delta Airlines said SAF is a "must-have solution" to decarbonize aviation and that Minnesota has feedstocks—including used cooking oil, corn, soy, camelina, municipal solid waste and forestry waste—suitable for SAF production. Julia Silvis, managing director for research at Greater MSP and managing director of the Minnesota SAF Hub, said a hypothetical set of three refineries could generate roughly 55,000 construction job-years and an estimated 40,000 operational jobs in the first 10 years, with substantial carbon reductions.

Agricultural and biofuels groups supported the bill and emphasized feedstock diversity. Testimony came from the Minnesota Corn Growers Association, Minnesota Farm Bureau, Minnesota Soybean Growers Association, Minnesota Biofuels Association, the University of Minnesota Forever Green Initiative and others who highlighted winter camelina, pennycress and ethanol-to-jet pathways.

Industry and labor witnesses described local economic benefits and workforce demand, while Minnesota Forest Industries urged inclusion of woody feedstocks and said wood-derived jet fuel can show very low carbon-intensity scores.

Environmental groups raised concerns. Sierra Club North Star chapter testified that subsidizing fuels from corn has produced negative environmental outcomes and urged exclusion of corn-based pathways as a guardrail. The testifier urged prioritizing investments that reduce emissions for homes and surface transportation before providing more public subsidy to aviation fuels.

The House Research staff explained the allocation is a capped tax-credit pool; in committee Q&A staff confirmed none of the 2023 credits had been claimed to date and that first claims were expected in late 2025. Committee members asked about delivery and blending logistics at Minneapolis'Saint Paul International Airport; Metropolitan Airports Commission Chair Rick King explained fuel is delivered into the airport fuel farm and SAF can be blended into the Jet A stream and distributed through existing infrastructure.

The DE1 amendment was moved and adopted by the committee by voice vote; Representative Davids moved the bill, as amended, be laid over for possible inclusion in the omnibus tax bill.

Ending: The committee approved the DE1 amendment and laid House File 1669 over for possible inclusion in the omnibus tax bill; no roll-call vote was recorded and the item will proceed to omnibus negotiations.