CHAPTER 755
H.P. 1817 - L.D. 2551
An Act to Implement the Recommendations of the Committee on Sawmill Biomass
Be it enacted by the People of the State of Maine as follows:
Sec. 1. 36 MRSA §5219-S is enacted to read:
§5219-S. Credit for consumption of wood processing residue
1. Definitions. As used in this section, unless the context otherwise indicates, the following terms have the following meanings.
A. "Affiliated" means a common ownership greater than 10% between one entity and another by means of financial interest or legal control whether directly or indirectly through one or more intermediaries or common owners.
B. "Authorized consumption" means use of wood processing residue for:(1) Combustion to generate electricity, industrial heat or steam;
(2) Mulch for landscaping and soil amendment but not for landfill;
(3) Composting of sewer sludge;
(4) Creation of medium density fiberboard, resin adhesives or other building products; or
(5) Conversion to ethanol or other forms of fuel derived from the residue.
"Authorized consumption" does not include a landfill deposit and does not include conversion to electricity, industrial heat or steam for a taxpayer's own use or for use by an affiliated entity.
C. "Facility" means a business that is regularly engaged in the authorized consumption of wood processing residue that is transported to the business. "Facility" may include a generator of electric power or steam, a distributor of landscaping mulch, a sewerage treatment plant, a manufacturer of building products derived from wood processing residue, an ethanol producer or a plant that produces residue-derived fuel.
D. "Taxpayer" means a business that produces merchantable lumber or secondary wood products.
E. "Wood processing residue" means bark and woody material generated in this State by a taxpayer as a by-product from the taxpayer's ordinary production of merchantable lumber or secondary wood products. "Wood processing residue" may include bark, sawdust, shavings and wood chips. "Wood processing residue" does not include limbs, tops and other slash material from logging operations, wood chips harvested directly from whole trees or material with an average moisture content greater than 55%.
2. Credit allowed. A taxpayer is allowed a credit against the tax imposed in this Part to be computed as provided in this subsection. For each ton of wood processing residue transported and delivered to a facility for authorized consumption, the credit equals the credit cap less the amount received from the facility for the wood processing residue delivered. The credit cap equals:
Distance from the point of generation to the facility |
Dollars per ton of allowable credit |
Under 30 miles |
$3 |
At least 30 miles but less than 50 miles |
$4 |
At least 50 miles but less than 70 miles |
$5 |
At least 70 miles |
$6 |
A taxpayer that includes a facility or that owns or is affiliated with a facility may not claim a credit under this section. The maximum credit allowed is $6 per ton. The credit authorized by this section may not reduce the tax below zero. The aggregate amount of credits authorized under this section may not exceed $500,000.
3. Period of application. The credit allowed by this section applies to wood processing residue that is transported and delivered during the period from July 1, 2000 to June 30, 2001 to a facility for authorized consumption. The credit must be taken during the tax year in which the transport and delivery occurs.
4. Rule-making authority. The Commissioner of Conservation, in consultation with the state economist, shall monitor, on a quarterly basis, the effectiveness of this section and, if necessary, adopt rules to ensure fair market interactions between taxpayers and facilities. The rules may contain provisions for suspension of the credit if the commissioner finds the existence of anticompetitive market conditions. Rules adopted pursuant to this subsection are routine technical rules as defined in Title 5, chapter 375, subchapter II-A.
Effective August 11, 2000, unless otherwise indicated.
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