Tax committee tables transferability bill; sponsor to draft refundable-credit amendment

The committee opened a work session on LD 2044, a bill that would allow transfer of the existing biofuel production credit (currently 5¢ per gallon) and the renewable chemicals credit (currently 8¢ per pound). An analyst distributed a written bill analysis and outlined major provisions, including that the proposed bill would allow transferees who are not producers to receive credits and that the bill does not limit the number of transfers or specify whether the 10-year carryover period begins at generation or at transfer.

The analyst said the bill "allows for the transfer of a credit to any individual or entity" and warned the transferee "is not required to meet any qualifying criteria"; the analyst also flagged that the current statute and MRS rule 8.18 require third-party testing and documentation for renewable chemicals eligibility. The analyst summarized Maine Revenue Services' written concerns: transferable credits depart from Maine's historical use of refundable credits, transferable credits would require new tracking and verification processes, and MRS suggested a grant program or a Minnesota-style incentive as an alternative.

Sean Norton, director of income tax at Maine Revenue Services, testified that administering additional credit-transfer mechanics would increase program complexity and administrative burden, saying, "I think our preference is a grant program." Sen. Perce, sponsor of the bill, told the committee stakeholders were comfortable with refundability as an alternative and said she would work with agencies and draft amendment language to convert transferability into a refundable-credit mechanism with a time-limited approach.

Sen. Bruce Bickford moved to table the item; the motion was seconded and the chair recorded a majority in favor, tabling the bill. The sponsor agreed to return with a draft amendment (a refundable-credit alternative with a proposed timeline and reporting back to the committee).

Why it matters: The bill aims to incentivize in-state production of biofuels and renewable chemicals. The committee's request for a refundable alternative reflects concerns about administrative costs, limited take-up of existing credits, and whether transferability would produce the intended incentive without creating additional complexity.

Next steps: The sponsor will draft and circulate proposed amendment language converting transferability to a refundable-credit option (including timeline options such as a 5- or 10-year refundable window or company-specific 10-year eligibility) and return to the committee for further consideration.