Maine E85 Laws and Incentives
State Incentives
Biofuels Production Tax Credit
A certified producer of ethanol, biodiesel, or methanol derived from biomass is allowed an income tax credit of $0.05 per gallon for the commercial production of biofuels for use in motor vehicles or otherwise used as a substitute for liquid fuels. A taxpayer claiming this credit must receive a letter from the Commissioner of Environmental Protection that certifies the biofuels produced during the taxable year are eligible for the tax credit. For biofuels blended with petroleum or other non-biofuels, the credit is allowed only on the biofuels portion of that blend. Any portion of unused credits may be carried over for the succeeding 10 taxable years. (Reference Maine Revised Statutes Title 36, Section 5219-X)
Alternative Fueling Infrastructure Tax Credit
A tax credit is available for up to 25% of expenditures incurred for the construction, installation of, or improvements to any fueling or charging station for the purposes of providing clean fuels to the general public for use in motor vehicles. Clean fuels include compressed natural gas, liquefied natural gas, liquefied petroleum gas, hydrogen, alcohol fuels containing at least 85% alcohol by volume, and electricity. This tax credit is available for tax years ending on or before December 31, 2008. Any portion of unused credits may be carried over into subsequent years as needed. (Reference Maine Revised Statutes Title 36, Section 5219-P)
State Laws and Regulations
Policy Recommendations for Biofuels Promotion
The Maine Office of Energy Independence and Security issued a report for the state legislature that recommended specific policy options aimed toward the promotion of biofuels. The recommendations included the following: a) combine existing, unfunded, alternative fuels funds into one Clean Fuel Fund; b) study sustainability measures for biofuels; c) improve implementation of existing policies related to alternative fuels; d) support research and development; e) exempt alternative fuels from exclusivity contracts; f) revise and reinstate an excise tax cut for biofuels; g) institute a biodiesel purchasing requirement for the Maine Department of Transportation; and h) pursue a regional renewable fuels standard and/or low carbon fuel standard. The report includes suggestions for initial implementation actions and next steps. (Reference Legislative Document 1159, 1284, and 1347, 2007)
Alternative Fuel and Alternative Fuel Vehicle (AFV) Promotion
A responsibility of the Energy Resources Council is, in coordination with the Department of Environmental Protection, to evaluate the costs and benefits of state government actions to stimulate an increase in the use and production of alternative fuels, including biofuels, and the use of AFVs in the state. (Reference Maine Revised Statutes Title 5, Section 3327; Title 35-A, Section 3211-A; and Executive Order 11, 2004)
Alternative Fuel Tax Rates
The state highway tax for each special fuel used in transportation is based on each fuel's energy content as compared to gasoline. Until June 30, 2008, the tax rates are as follows: E85 is taxed at a rate of $0.196 per gallon; propane (LPG) at $0.201 per gallon; and compressed natural gas (CNG) at $0.239 per 100 standard cubic feet. Gasoline is taxed at a rate of $0.276 per gallon and diesel is $0.288 per gallon. For more information, including fuel tax rates effective July 1, 2008, see the Maine Revenue Services Web site. (Reference Maine Revised Statutes Title 36, Section 3203)
Alternative Fuel Vehicle (AFV) and Fueling Infrastructure Loans
The Clean Fuel Vehicle Fund is a non-lapsing revolving loan fund managed by the Finance Authority of Maine and may be used for direct loans to finance all or part of any clean fuel vehicle project. The Finance Authority of Maine may also insure up to 100% of mortgage payments with respect to mortgage loans for clean fuel vehicle projects. (Reference Maine Revised Statutes Title 10, Sections 1023-K and 1026-A)
Biofuels Production Incentive
The Agriculturally Derived Fuel Fund was developed to provide direct loans and subsidies to a business or cooperative for the design and construction of a facility that produces agriculturally derived fuel, specifically methanol and ethanol. It is a non-lapsing fund controlled by the Finance Authority of Maine. (Reference Maine Revised Statutes Title 10, Section 997-A)
Provision for Establishment of Clean Fuel Vehicle Insurance Incentives
An insurer may credit or refund any portion of the premium charged for an insurance policy on a clean fuel vehicle in order to encourage its policyholders to use clean fuel vehicles, if insurance premiums on other vehicles are not increased to fund these credits or refunds. (Reference Maine Revised Statutes Title 24-A, Section 2303-B)
