Michigan Senate Bill SB0447

Michigan 2023-2024 Regular Session

• Introduced: 6/28/23
• Introduced: 12/19/24
• Refer: 6/28/23
• Refer: 12/19/24
• Report Pass: 12/11/24
• Report Pass: 12/12/24
• Refer: 12/11/24
• Engrossed: 12/13/24
• Refer: 12/13/24

Caption

Corporate income tax: credits; credit for use of sustainable aviation fuel; provide for. Amends 1967 PA 281 (MCL 206.1 - 206.847) by adding sec. 677.

Impact

If enacted, SB0447 will have significant implications for the aviation industry and related sectors in Michigan. It seeks to boost local production of SAF, which in turn could enhance economic activity and job creation in the clean energy sector. The bill also aims to position Michigan as a leader in the sustainable energy transition within the aviation industry. By incentivizing the use of renewable resources for fuel production, it aligns with broader state goals of reducing carbon emissions and combatting climate change.

Summary

SB0447, also known as the Sustainable Aviation Fuel Credit Bill, aims to encourage the production and blending of sustainable aviation fuel (SAF) in Michigan through tax credits. Starting from 2025, qualified taxpayers are allowed to claim a credit of $1.50 per gallon of SAF produced within Michigan and sold for use in state-departing aircraft. The bill outlines specific conditions under which the credits can be applied, including the requirement that the SAF achieve at least a 50% reduction in life-cycle greenhouse gas emissions compared to traditional aviation fuels. Furthermore, it introduces provisions to increase the credit amount for SAF that achieves even greater emissions reductions.

Sentiment

The overall sentiment surrounding SB0447 has been cautiously optimistic, with proponents expressing strong support for the measures as necessary for environmental stewardship and economic opportunity. Industries related to renewable energy and aviation have voiced approval, anticipating a more robust market for SAF. However, some concerns have been raised regarding the feasibility of the emissions reduction targets, with critics arguing that such ambitious goals could be challenging to achieve in practice. Nevertheless, the bill has generally been well-received among legislative peers, signifying a growing bipartisan interest in sustainable fuel initiatives.

Contention

Debate regarding SB0447 has focused on the bill's details, particularly the definitions of 'qualified taxpayer' and 'sustainable aviation fuel,' which some stakeholders feel may require further clarification. Additionally, concerns have been raised about the cap placed on the amount of tax credits available per fiscal year, which some argue could limit the bill's potential effectiveness. Future discussions may revolve around refining the emissions reduction criteria and ensuring that local producers have the capacity to meet these requirements without imposing undue burdens.