Purpose

This bill changes how Minnesota handles the tax credit for sustainable aviation fuel (SAF). It increases the total amount the state can allocate each year for this credit and sets rules about carrying over unspent funds and when the program ends.

Main provisions

• Legislative change: Amends Minnesota Statutes 2024, section 41A.30, subdivision 5, to update how much credit can be issued and when.
• Annual allocation limits (for credit certificates issued under subdivision 2):
  • Fiscal year 2025: up to $7,400,000.
  • Fiscal year 2026: up to $21,000,000.
  • Fiscal years 2027 through 2029: up to $10,000,000 each year.
• Carryover of unspent funds: If the full annual allocation isn’t used in a given year (2025, 2026, 2027–2029), any remaining amount can be carried forward and allocated in later years through fiscal year 2030, until the total allocation is used.
• Sunset and cancellation:
  • The state will not issue new SAF tax credit certificates for fiscal years beginning after June 30, 2030.
  • Any unallocated amounts remaining after that date will be canceled.

Significance and changes to existing law

• The bill increases and clarifies the funding available for the SAF tax credit compared to prior law, with specific dollar caps by year.
• It introduces a carryover mechanism, allowing unused credits to be allocated later (up to 2030).
• It sets a hard end date (sunset) for the program, canceling any remaining unallocated funds after June 30, 2030.

Effect on taxpayers and industry

• Taxpayers and SAF projects may have a clearer, potentially larger window and amount for qualifying credits in 2025–2029.
• Projects can plan with the possibility of receiving credits in later years if the full annual cap isn’t used right away.
• After June 30, 2030, no new SAF tax credits would be issued, and the program would end, reducing long-term expectations for SAF-related incentives.

Impact on state administration

• The Department (commissioner) must monitor annual caps, manage carryover amounts into 2030, and ensure no credits are issued after the sunset date.
• Any unallocated funds remaining after June 30, 2030, must be canceled.

Relevant Terms - sustainable aviation fuel (SAF) - tax credit certificates - allocation limits - fiscal year - carryover - sunset - Minnesota Statutes 2024 section 41A.30 subdivision 5 - subdivision 2 (refers to the portion of law creating the credit)