Sec. 1. 36 MRSA §198, sub-§4, ¶¶N and O, as enacted by PL 1989, c. 508, §7, are amended to read:

N. Section 5219-A; and

O. Section 5219-B.; and

Sec. 2. 36 MRSA §198, sub-§4, ¶P is enacted to read:

P.__Section 5219-Q.

Sec. 3. 36 MRSA §5219-Q is enacted to read:

§5219-Q.__Value-added wood products tax credit

1.__Credit authorized.__A taxpayer engaged in the production of value-added wood products is entitled to a credit against the tax imposed by this Part for each taxable year equal to 5% of the value added to a wood product by the taxpayer.__For the purposes of this section, "value-added wood product" means Maine-grown trees that are processed or changed in this State into a wood product that has more value than the unprocessed resource.__For the purposes of this section, "value-added wood product" does not include firewood, logs, wood chips, wreath tips, Christmas trees, cut lumber, pulp or nonrecyclable paper.__"Value added to a wood product" means the difference between the gross receipts to the taxpayer from the sale of the wood product and the cost to the taxpayer of the unprocessed resource.

2.__Limitation; carry-over.__A credit may not be used to reduce taxes below zero in any tax year starting before January 1, 2000.__Any unused credit may be carried over to the following year or years for a period not to exceed 5 years.

3.__Affiliated groups.__If the taxpayer is a corporation that is part of an affiliated group of corporations eligible for the credit, the credit must be apportioned among the taxable corporations in the affiliated group in the same proportion that the tax liability of each taxable corporation in the affiliated group bears to the total tax liability of all the taxable corporations in the affiliated group.

Sec. 4. Application date. This Act applies to tax years beginning on or after January 1, 2000.