An Act To Create Jobs and Slow Climate Change by Promoting the Production of Natural Resources Bioproducts
Maine Legislature, Session 129, LD 1698
Committee: Taxation
Sponsors: FECTEAU, JACKSON, BICKFORD, MADIGAN, STANLEY, STEWART, TERRY, DILL, KEIM, POULIOT
Amends: 36 MRSA §5219-X, 36 MRSA §5219-V

Legislative Document
No. 1698
H.P. 1213
House of Representatives, May 8, 2019
An Act To Create Jobs and Slow Climate Change by Promoting the 
Production of Natural Resources Bioproducts
Reference to the Committee on Taxation suggested and ordered printed.
ROBERT B. HUNT
Clerk
Presented by Representative FECTEAU of Biddeford.
Cosponsored by President JACKSON of Aroostook and
Representatives: BICKFORD of Auburn, MADIGAN of Waterville, STANLEY of Medway, 
STEWART of Presque Isle, TERRY of Gorham, Senators: DILL of Penobscot, KEIM of 
Oxford, POULIOT of Kennebec.
Be it enacted by the People of the State of Maine as follows:
Sec. 1.  36 MRSA §5219-X, sub-§5, as amended by PL 2015, c. 267, Pt. DD, 
§32, is further amended to read:
5.  Application.  This section applies to tax years beginning on or after January 1, 
2004.  Except for the credit allowed with respect to the carry-over of unused credit 
amounts pursuant to subsection 3, the tax credit allowed under this section does not apply 
to tax years beginning on or after January 1, 2016 and before January 1, 2020.
Sec. 2.  36 MRSA §5219-VV is enacted to read:
§5219-VV.  Renewable chemicals tax credit
1.  Definitions.  As used in this section, unless the context otherwise indicates, the 
following terms have the following meanings.
A.  "Biobased content" means the total mass of organic carbon derived from 
renewable biomass, expressed as a percentage, determined by testing representative 
samples using the ASTM International D6866 standard test methods.
B.  "Renewable biomass" has the same meaning as in 7 United States Code, Section 
8101(13).
C.  "Renewable chemical" means a substance, compound or mixture that:
(1)  Is the product of, or reliant upon, biological conversion, thermal conversion 
or a combination of biological and thermal conversion of renewable biomass;
(2)  Is sold or used:
(a)  For the production of chemical products, polymers, plastics or formulated 
products; or
(b)  As a chemical, polymer, plastic or formulated product;
(3)  Is not less than 95% biobased content; and
(4)  Is not sold or used for production of any food, feed or fuel, except that 
"renewable chemical" may include:
(a)  Cellulosic sugars used to produce aquaculture feed;
(b)  A food additive, supplement, vitamin, nutraceutical or pharmaceutical 
that does not provide caloric value and is not considered food or feed; and
(c) Cellulosic ethanol, levulinic acid or similar chemicals when sold for use 
or for production of fuel additives in blends with gasoline or residential 
heating oil.
2.  Credit allowed.  A taxpayer engaged in the production of renewable chemicals in 
the State is allowed a credit against the tax imposed by this Part on income derived during 
the taxable year from the production of renewable chemicals in the amount of 7¢ per 
pound of renewable chemical.
3.  Credit allowed specific to forest-derived renewable biomass.  If a taxpayer 
engaged in the production of renewable chemicals in the State qualifies for the credit 
allowed in subsection 2 and the renewable biomass used is derived from forest products, 
the taxpayer may apply for one of the following credits instead of the credit in subsection 
when the following criteria are met:
A.  The credit is 9¢ per pound of renewable chemical if the taxpayer demonstrates to 
the satisfaction of the Department of Economic and Community Development that 
the contractors hired or retained to harvest renewable biomass used in production of 
the renewable chemical are 3rd-party certified by a northeast master logger program 
or successor program and at least 50% of the contractors' employees are residents of 
the United States at the time of the application for the credit; or
B.  The credit is 12¢ per pound of renewable chemical if the taxpayer demonstrates to 
the satisfaction of the Department of Economic and Community Development that 
the contractors hired or retained to harvest renewable biomass used in production of 
the renewable chemical are 3rd-party certified by a northeast master logger program 
or successor program and at least 75% of the contractors' employees are residents of 
the United States at the time of the application for the credit.
If the taxpayer does not contract directly with those hired or retained to harvest the 
renewable biomass, the taxpayer may obtain the necessary documentation under this 
subsection from the landowner or other entity that contracts directly.
4.  Reporting.  A taxpayer allowed a credit under either subsection 2 or 3 shall report 
to the Department of Economic and Community Development, for each tax credit 
awarded, the dollar amount of the tax credit, the number of direct manufacturing jobs 
created, the number of related indirect jobs created and the dollar amount of capital 
investment in manufacturing.  Indirect jobs include but are not limited to jobs in logging 
and support services.
5.  Limitation.  A person entitled to a tax credit under this section for any taxable 
year may carry over and apply the portion of any unused credits to the tax liability on 
income derived from the production of renewable chemicals for any one or more of the 
next succeeding 10 taxable years. The credit allowed, including carryovers, may not 
reduce the tax otherwise due under this Part to less than zero.
This section applies to tax years beginning on or after January 1, 2020.
Sec. 3.  Report.  By February 1, 2024, the Department of Economic and 
Community Development shall submit a report relating to the usage of the renewable 
chemicals tax credit under the Maine Revised Statutes, Title 36, section 5219-VV to the 
joint standing committees of the Legislature having jurisdiction over taxation and 
innovation, development, economic advancement and business matters.  The report must 
include:
1.  For each tax credit awarded:
A.  The dollar amount of the tax credit;
B.  The number of direct manufacturing jobs created and the number of related 
indirect jobs created; and
C.  The dollar amount of capital investment in manufacturing; and
2.  The amount in pounds of renewable chemical produced for which the credit was 
claimed.
SUMMARY
This bill provides a tax credit for the production of renewable chemicals by the 
conversion of renewable biomass from the forest, farms, the sea or solid waste.  The 
credit is equal to 7¢ per pound of renewable chemical produced in the State, 9¢ per pound 
of renewable chemical produced in the State if the taxpayer demonstrates to the 
satisfaction of the Department of Economic and Community Development that the 
contractors hired or retained by a landowner to harvest renewable biomass used in 
production of the renewable chemicals are 3rd-party certified by the Northeast Master 
Logger program or successor program and at least 50% of the contractors' employees are 
residents of the United States or 12¢ per pound of renewable chemical produced in the 
State if the taxpayer demonstrates to the satisfaction of the Department of Economic and 
Community Development that the contractors hired or retained by a landowner to harvest 
renewable biomass used in such production are 3rd-party certified by the Northeast 
Master Logger program and at least 75% of the contractors' employees are residents of 
the United States.  Renewable chemicals are defined to include chemicals, polymers, 
plastics and formulated products, and to exclude substances used for food, feed or fuel, 
with limited exceptions.  The bill also reinstates the tax credit for commercial production 
and use of biofuels.