AN ACT TO PROVIDE TAX CREDITS FOR DISPENSING AND PROCESSING RENEWABLE FUELS.

The General Assembly of North Carolina enacts:

SECTION 1.  G.S. 105‑129.15 is amended by adding a new subdivision to read:
"(8)	Renewable fuel. – Either of the following:
a.	Biodiesel, as defined in G.S. 105‑449.60.
b.	Ethanol either unmixed or in mixtures with gasoline that are seventy percent (70%) or more ethanol by volume."
SECTION 2.  Article 3B of Chapter 105 of the General Statutes is amended by adding the following new section to read:
"§ 105‑129.16D.  Credit for constructing renewable fuel facilities.
(a)	Dispensing Credit. – A taxpayer that constructs and installs and places in service in this State a qualified commercial facility for dispensing renewable fuel is allowed a credit equal to fifteen percent (15%) of the cost to the taxpayer of constructing and installing the part of the dispensing facility, including pumps, storage tanks, and related equipment, that is directly and exclusively used for dispensing or storing renewable fuel. A facility is qualified if the equipment used to store or dispense renewable fuel is labeled for this purpose and clearly identified as associated with renewable fuel.
The entire credit may not be taken for the taxable year in which the facility is placed in service but must be taken in three equal annual installments beginning with the taxable year in which the facility is placed in service. If, in one of the years in which the installment of a credit accrues, the portion of the facility directly and exclusively used for dispensing or storing renewable fuel is disposed of or taken out of service, the credit expires and the taxpayer may not take any remaining installment of the credit. The taxpayer may, however, take the portion of an installment that accrued in a previous year and was carried forward to the extent permitted under G.S. 105‑129.17.
(b)	Production Credit. – A taxpayer that constructs and places in service in this State a commercial facility for processing renewable fuel is allowed a credit equal to twenty‑five percent (25%) of the cost to the taxpayer of constructing and equipping the facility. The entire credit may not be taken for the taxable year in which the facility is placed in service but must be taken in seven equal annual installments beginning with the taxable year in which the facility is placed in service. If, in one of the years in which the installment of a credit accrues, the facility with respect to which the credit was claimed is disposed of or taken out of service, the credit expires and the taxpayer may not take any remaining installment of the credit. The taxpayer may, however, take the portion of an installment that accrued in a previous year and was carried forward to the extent permitted under G.S. 105‑129.17.
(c)	No Double Credit. – A taxpayer that claims any other credit allowed under this Chapter with respect to the costs of constructing and installing a facility may not take the credit allowed in this section with respect to the same costs.
(d)	Sunset. – This section is repealed effective for facilities placed in service on or after January 1, 2008."
SECTION 3.  This act becomes effective for taxable years beginning on or after January 1, 2005.
In the General Assembly read three times and ratified this the 17th day of July, 2004.

	s/	 Beverly E. Perdue
	 President of the Senate

	s/	 James B. Black
	 Speaker of the House of Representatives

	s/	 Michael F. Easley
	 Governor

Approved 4:32 p.m. this 2nd day of August, 2004