HF3619

Purpose

• To require an environmental review of sustainable aviation fuel (SAF) and to pause certain financial incentives and grants for SAF production and blending until that review is completed. The bill also establishes a specific tax credit for SAF, with conditions tied to the environmental review process.

Main Provisions

• Tax credit for SAF (Minnesota §41A.30, subdivision 2, amended)
  • Eligible taxpayers may claim a tax credit of $1.50 per gallon for SAF produced in Minnesota or blended with aviation gasoline or jet fuel in Minnesota and sold in Minnesota for use in an aircraft departing from a Minnesota airport.
  • The taxpayer must apply to the commissioner for certification and allocation of the credit. The credit can be claimed only after the commissioner approves and certifies it, and after the Environmental Quality Board (EQB) completes a generic environmental impact statement (GEIS) on SAF.
  • If SAF is blended with aviation gasoline or jet fuel, the credit is allowed only for the portion of SAF included in the blended fuel.
  • If the credit amount exceeds the tax liability, the excess must be refunded by the commissioner of revenue.
  • A taxpayer may claim the credit only after GEIS completion and after certification by the commissioner; it is limited to the amount stated on the credit certificate issued under the referenced subdivision.
• Temporary moratorium on grants (Sec. 2)
  • The commissioner of agriculture may not award any grants to SAF producers or blenders until the GEIS on SAF is completed.
• Generic Environmental Impact Statement (Sec. 3)
  • The EQB must order a GEIS to review the environmental impact of the production and use of SAF as defined by Minnesota Statutes 41A.30, subdivision 1, paragraph g.

Significant Changes to Existing Law

• Adds a mandatory, state-level GEIS process for SAF, to be ordered by the Environmental Quality Board, creating a formal environmental review before large-scale SAF activity proceeds.
• Ties the SAF tax credit to completion and certification following the GEIS, effectively delaying the incentive until environmental review is finished.
• Imposes a temporary ban on state grants to SAF producers and blender projects until the GEIS is completed.
• Specifies blending rules for the tax credit, ensuring credit applies only to the SAF portion in blended fuels.

How Implementation Would Work

• Environmental review process
  • EQB orders a GEIS to assess SAF environmental impacts, using SAF as defined by the statute.
• Certification and credit process
  • SAF producers or blenders apply to the commissioner for credit certification/allocation.
  • The commissioner may certify the amount, which must align with the GEIS outcome; the credit can be claimed only after GEIS completion.
  • The credit is claimed against the tax due under chapter 290; if the credit exceeds the taxpayer’s tax liability, the remaining amount is refunded.
• Grants pause
  • NO SAF-related grants from the Department of Agriculture until the GEIS is completed.

Potential Implications

• Environmental review may slow SAF projects and related financial incentives.
• Clear link between environmental analysis and state financial incentives could influence investment decisions in SAF production and blending.
• Blending rules ensure the credit targets the SAF portion specifically, not entire blended fuels.

Terminology and Concepts to Note

• Sustainable aviation fuel (SAF)
• Environmental Quality Board (EQB)
• Generic environmental impact statement (GEIS)
• Minnesota Statutes 2024 section 41A.30 subdivision 2
• Tax credit against the tax due under chapter 290
• Commissioner of Revenue
• Commissioner of Agriculture
• Credit certificate (subdivision 3 reference)
• Blending with aviation gasoline or jet fuel
• Certification and allocation of a tax credit
• Grant moratorium

Relevant Terms - sustainable aviation fuel - Environmental Quality Board - generic environmental impact statement - SAF - tax credit - Minnesota Statutes 2024 41A.30 - commissioner of revenue - commissioner of agriculture - blending - aviation gasoline - jet fuel - credit certificate - GEIS completion