Senate taxes panel advances bill extending Minnesota sustainable aviation fuel tax credit

The Minnesota Senate Taxes Committee on Feb. 20 recommended passage of Senate File 1312, a bill that would extend and expand the state's sustainable aviation fuel (SAF) tax credit and update statutory definitions for eligible feedstocks.

The committee, chaired by Senator Jennifer Rest, voted by voice to move the bill to the Senate floor after adopting an author's A2 amendment and after Senator Ron Dibble offered and then withdrew an A3 amendment for further work. Senator Gary Putnam moved the motion to recommend passage; the motion prevailed by voice vote.

The bill would extend the existing $1.50-per-gallon refundable SAF tax credit first enacted in 2023 and, as described to the committee, would push expiration of the program to 2035 and increase annual allocations in the program language. The text presented to the committee also adds new eligible feedstocks and clarifies the statutory definition of biomass to allow "gaseous carbon oxides" (captured CO2) as a feedstock pathway for SAF production.

"Sustainable aviation fuel can potentially reduce jet emissions by 50%," said Senator Mark Kupak, a co-author, explaining why Minnesota should maintain and expand the tax credit. Co-author Senator Joe Jasinski described a range of feedstocks and the state's capacity to produce SAF from crops, forestry residues and other materials found in Minnesota.

State officials and industry representatives…