Description

The Biodiesel Incentive Act, enacted in April 2003, created a production incentive for qualified biodiesel producers and a tax credit for biodiesel suppliers in Arkansas. The Alternative Fuels Commission, created by HB 1306 (2003), awards biodiesel producers $0.10 per gallon for each gallon of pure biodiesel, with a maximum award of $500,000 per tax year. This incentive applies to tax years beginning on or after January 1, 2003.

The biodiesel production incentive is funded by the Alternative Fuels Fund, also created by HB 1306 (2003). Under this legislation, an electric or natural gas utility may elect to contribute to the Arkansas Alternative Fuels Fund and the Arkansas Weatherization Assistance Fund. Each participating utility will be assessed $0.001 (one-tenth of one cent) per kilowatt-hour for power sold to residential customers, with a maximum assessment of $1.00 per person per month. The Alternative Fuels Fund will receive 30% of the total sum; the Weatherization Assistance Fund will receive 70%.