Committee hears bill to allow transfer of biofuel and renewable‑chemical tax credits
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Summary
The Joint Standing Committee on Taxation held a public hearing on LD 2044, a proposal to let certified biofuel and renewable‑chemical producers transfer or sell tax credits to entities with tax liability. Supporters said transferability would make early‑stage biorefineries bankable; state officials warned of administrative and fiscal trade‑offs.
The Joint Standing Committee on Taxation heard testimony on LD 2044, a bill to allow transferability of Maine’s biofuel production and renewable‑chemical tax credits.
Sponsor Senator Theresa Perce, who serves as Senate majority leader, said the bill aims to “provide flexibility that creates tools to help businesses get up off the ground and provide a runway for them to take off.” She framed the measure as part of a broader push to leverage Maine’s forest resources, preserve legacy industries and spur rural economic development.
Industry backers described the measure as essential to financing capital‑intensive biorefineries. Mike Casada, chief development officer of BioFine Developments Northeast, said the Lincoln facility his company is developing would struggle to raise private capital without a way to realize the tax‑credit value in the early years. “Without this language, BioFine and other biobased product manufacturers will not be able to put the biobased tax credit to work,” Casada said, describing transferability as the tool financiers expect to create a reliable early revenue stream.
Forest industry consultant Eric Kingsley told the committee the technology planned for a Millinocket project would use “in the neighborhood of 300,000 green tons a year” of tops and branches and directly employ dozens of workers while supporting the supply chain. Krista West of the Maine Forest Products Council noted the state’s $8.3 billion forest industry and urged the committee to adapt an existing, underused incentive to new market realities.
State administrative officials raised implementation concerns. Anya Trundy, deputy commissioner at the Department of Administrative and Financial Services, described transferability as “a significant departure from Maine’s current approach” and said Maine Revenue Services would need new tracking and verification processes to administer sales of credits. Trundy suggested refundable credits or a grant program as alternatives that could deliver public benefit without the private sale infrastructure.
Committee members and witnesses discussed technical details of the existing credits: the biofuel credit is tied to production volume (the department said the biofuel credit is 5¢ per gallon) and the renewable‑chemical credit is quantified differently (identified in testimony as 8¢ per pound for the renewable chemical credit). Witnesses also noted the existing tax credits have a 10‑year carryforward but argued carryforward alone may not prevent early‑stage projects from failing before tax liabilities materialize.
The committee closed the public hearing after receiving written and oral testimony and indicated it would consider the bill further at work sessions. No vote was taken at the hearing stage.