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HOUSE BILL NO. 1230
AMENDMENT IN THE NATURE OF A SUBSTITUTE
(Proposed by the House Committee on Finance
on ________________)
(Patron Prior to Substitute--Delegate Sewell)
A BILL to amend the Code of Virginia by adding in Article 13 of Chapter 3 of Title 58.1 a section numbered
58.1-439.12:13
, relating to income tax; sustainable aviation fuel production tax credit.
Be it enacted by the General Assembly of Virginia:
1. That the Code of Virginia is amended by adding in Article 13 of Chapter 3 of Title 58.1 a section numbered
58.1-439.12:13
as follows:
§
58.1-439.12:13
.
S
ustainable aviation
fuel production
t
ax
c
redit
.
A. For
purposes of this section:
"
Eligible p
roducer" means
a taxpayer
that manufactures
sustainable aviation fuel
or blends of such sustainable aviation fuel
in the Commonwealth
from feedstock
or biomass
, at least 10 percent of which is
grown or produced
with
in
the Commonwealth.
"Sustainable aviation fuel" means
liquid fuel that
:
1.
a.
M
eets the criteria set forth in
§ 40B of the Internal Revenue Code; or
b.
Consists of synthesized hydrocarbons and meets the
requirements of (i)
ASTM International
standard D7566 or (ii) the Fischer
-Tropsch provisions of ASTM Internation
al standard D1655, Annex A1;
2
. Is derived from biomass
as defined in § 10.1
-1308.1
, renewable energy sources, or gaseous carbon oxides;
3
. Is not derived from palm fatty acid distillates
or from pyrolysis oil or similar
substances
manufactured from plasti
c or municipal solid waste
;
and
4
. Achieves at least a 50 percent lifecycle greenhouse gas emissions reduction in comparison with petroleum-based jet fuel, as determined by a test that shows
:
a.
T
he fuel production pathway
achieves at least a 50 percent reduction of the aggregate attributional core lifecycle emissions and the positive induced land use change values under the lifecycle methodology for sustainable aviation fuels adopted by the International Civil Aviation Organization with the agreement of the United States
; or
b. The fuel production pathway achieve
s at least a 50 percent reduction of the aggregate attributional core lifecycle greenhouse gas emissions values utilizing the most recent version of
Argonne National Laboratory's GREET model, inclusive of agricultural practices and carbon capture and sequestration.
B. For taxable years beginning on and after January 1, 202
7
,
but before January 1, 203
2
,
a
n eligible
producer
shall be allowed a nonref
undable credit against the tax levied pursuant to §
58.1-320
or
58.1-400
in an amount equal to
the lesser of (i)
$0.75
per gallon of sustainable aviation fuel produced
in
the taxable year
or (ii) $
5 million
.
The aggregate amount of credits allowable under this
subdivision
shall not exceed $
2
0
million per taxable year. Credits shall be allocated by the Department on a first-come, first-served basis.
C. The amount of the credit claimed shall not exceed the total amount of tax imposed pursuant to §
58.1-320
or
58.1-400
upon the taxpayer for the taxable year. Any credit not usable for the taxable year for which the credit was first allowed may be carried over for credit against the income taxes of the taxpayer in the next five succeeding taxable years or until the total amount of the tax credit has been taken, whichever is sooner.
D
. Credits granted to a partnership, limited liability company, or electing small business corporation (S corporation) shall be allocated to the individual partners, members, or shareholders, respectively, in proportion to their ownership or interest in such business entities.
E
. The Tax Commissioner shall develop guidelines for claiming the credit provided by this section. Such guidelines shall be exempt from the provisions of the Administrative Process Act (§
2.2-4000
et seq.).