{"data":{"id":"us-ky/krs-141.417","jurisdiction":"us-ky","citation":"KRS 141.417","heading":"Alternative jet fuel tax credit -- Definitions for section -- Rates -- Limits --","body":"Administrative regulations -- Reports -- Application and certification.\n(1) As used in this section:\n(a) \"Agriculturally based alternative jet fuel\" means an alterna tive jet fuel\nproduced from agricultural biomass, including crops and agricultural\nbyproducts derived from agricultural or livestock production, such as corn,\nsoybeans, wheat, canola, animal fats, and biomass residues from trees, wood,\nand grasses;\n(b) \"Alternative jet fuel\" means a liquid fuel that can be used in an aircraft\nwithout the need to modify the aircraft engines or existing fuel distribution\ninfrastructure, and that:\n1. Consists of synthesized hydrocarbons and meets the requirements of:\na. The Am erican Society for Testing and Materials International\nStandard D7566; or\nb. The American Society for Testing and Materials International\nStandard D1655;\n2. Is derived from eligible feedstocks;\n3. Is not derived from palm fatty acid distillates; and\n4. Achieves at least a fifty percent (50%) lifecycle greenhouse gas\nemissions reduction in comparison with petroleum -based jet fuel, as\ndetermined by a test that shows the fuel production pathway achieves at\nleast a fifty percent (50%) reduction of the aggreg ate attributional care\nlifecycle by measuring either:\na. Emissions under the lifecycle methodology for alternative jet fuels\nadopted by the International Civil Aviation Organization with the\nagreement of the United States; or\nb. Greenhouse gas emissions va lues utilizing the most recent version\nof Argonne National Laboratory's GREET model;\n(c) \"Alternative jet fuel producer\" means an entity in this state that:\n1. Produces alternative jet fuel; or\n2. Blends SBC with conventional aviation gasoline or jet fuel;\n(d) \"Eligible feedstock\" means any feedstock that qualifies as an eligible\nfeedstock for purposes of Section 45Z of the Internal Revenue Code;\n(e) \"Eligible taxpayer\" means an alternative jet fuel producer or feedstock\nprovider that is located in the Commonwealth;\n(f) \"Feedstock provider\" means an entity that manufactures an eligible feedstock,\nincluding SBC, used in the process of making alternative jet fuel; and\n(g) \"Synthetic blending component\" or \"SBC\" means synthesized hydrocarbons\nthat meet the requ irements in any one (1) of the annexes of the American\nSociety for Testing and Materials International Standard D7566, which may\nthen be used as a component in the manufacture of alternative jet fuel.\n(2) (a) There shall be allowed a nonrefundable, nontran sferable alternative jet fuel\ncredit allowed against the taxes imposed in KRS 141.020 or 141.040 and\n141.0401 for alternative jet fuel producers in an amount certified by the\ndepartment under this section, with the ordering of the credits as provided in\nKRS 141.0205.\n(b) For taxable years beginning on or after January 1, 2029, but before January 1,\n2035, an eligible taxpayer may claim a credit at a rate of:\n1. Fifty cents ($0.50) per gallon to a feedstock provider supplying either\neligible feedstocks or SBC to an alternative jet fuel producer;\n2. One dollar and fifty cents ($1.50) per gallon to an alternative jet fuel\nproducer that processes eligible feedstocks or blends SBC with\nconventional jet fuel to produce alternative jet fuel;\n3. Two dollars ($2) per gallon to an alternative jet fuel producer that\nprocesses eligible feedstocks or blends SBC with conventional jet fuel to\nproduce agriculturally based alternative jet fuel; or\n4. Two dollars and fifty cents ($2.50) per gallon to an alternative jet fuel\nproducer that processes eligible feedstocks or blends SBC with\nconventional jet fuel to produce an agriculturally based alternative jet\nfuel using an eligible feedstock that was produced in the\nCommonwealth.\n(3) (a) The credit allowed in subsection (2) of thi s section shall not be carried\nforward to other taxable years.\n(b) The total credit allowed in subsection (2)(b)1. and 2. of this section shall not\nexceed two million dollars ($2,000,000) per eligible taxpayer per taxable year.\n(c) The credits allowed in s ubsection (2) of this section may stack if the\nalternative jet fuel producer is the same as the feedstock provider and shall not\nexceed three dollars ($3) per gallon per entity.\n(d) The aggregate total credit certified in a calendar year shall not exceed t wenty\nmillion dollars ($20,000,000). If the aggregate total of credits certified\nexceeds twenty million dollars ($20,000,000), the department shall apportion\ncredits pro rata among eligible taxpayers up to the twenty million dollar\n($20,000,000) limit.\n(4) The department, in conjunction with the Kentucky Department of Agriculture and\nthe Energy and Environment Cabinet, shall promulgate emergency and ordinary\nadministrative regulations in accordance with KRS Chapter 13A to adopt:\n(a) Forms and procedures nec essary for implementation, calculation, reporting,\nand certification of the credit no later than October 1, 2028;\n(b) Verification standards and processes to ensure the fuel meets the requirements\nto be alternative jet fuel or agriculturally based alternative jet fuel; and\n(c) Verification standards and processes to ensure each alternative jet fuel\nproducer and feedstock provider meets the criteria established in subsection\n(1)(c) and (f) of this section.\n(5) The department, Kentucky Department of Agricultu re, and Energy and\nEnvironment Cabinet shall report to the Interim Joint Committee on Appropriations\nand Revenue when administrative regulations have been promulgated under\nsubsection (4) of this section, and the credit provided in this section shall not b e\napproved prior to the report.\n(6) (a) An eligible taxpayer seeking approval for the credit under this section shall:\n1. Submit an application to the department, on a form as prescribed by the\ndepartment, by January 15, 2030, following the close of the calendar\nyear, and each January 15 thereafter as long as the credit is available;\nand\n2. Provide the:\na. Taxpayer's identification number; and\nb. Description and amount or volume of alternative jet fuel, eligible\nfeedstock, or SBC:\ni. Produced, including anticipated production amounts, for the\ncalendar year; or\nii. Blended, including anticipated production amounts, for the\ncalendar year.\n(b) The department shall:\n1. Review all applications submitted by eligible taxpayers by February 15,\n2030, and each February 15 thereafter as long as the credit is available;\n2. Determine the qualifying volumes of alternative jet fuel, eligible\nfeedstock, or SBC per eligible taxpayer; and\n3. Issue a certification by March 1, 2030, and each March 1 thereafter as\nlong as the credit is available, of the credit amount approved for each\neligible taxpayer.\n(7) (a) In order for the General Assembly to evaluate the alternative jet fuel producer\ncredit, by November 1, 2030, and each November 1 thereafter, as long as the\ntax credit is claimed on any tax return filed, the department shall report the\nfollowing to the Legislative Research Commission for refer ral to the Interim\nJoint Committee on Appropriations and Revenue and the Department of\nAgriculture:\n1. The number of tax returns, by the tax type of return filed, claiming the\ncredit for each taxable year;\n2. The total amount of credit claimed on returns filed for each taxable year;\n3. The total number of gallons claimed per return filed of:\na. Eligible feedstock or SBC provided;\nb. Eligible feedstock processed or SBC blended with conventional jet\nfuel to produce alternative jet fuel;\nc. Agriculturally based alternative jet fuel produced; and\nd. Agriculturally based alternative jet fuel produced using an eligible\nfeedstock that was produced in the Commonwealth;\n4. The cumulative number of credits claimed by county, as identified by\nthe mailing address on the return filed for each taxable year; and\n5. a. In the case of taxpayers other than corporations, based on ranges\nof adjusted gross income of no larger than five thousand dollars\n($5,000), the total amount of credits claimed for each adjusted\ngross income range for each taxable year.\nb. In the case of corporations, based on ranges of net income of no\nlarger than fifty thousand dollars ($50,000), the total amount of\ncredit claimed for each net income range for each taxable year.\n(b) The information required t o be reported under this subsection shall not be\nconsidered confidential taxpayer information and shall not be subject to KRS\nChapter 131 or any other provisions of the Kentucky Revised Statutes\nprohibiting disclosure or reporting information.","path":["KRS Chapter 141"],"source_url":"https://apps.legislature.ky.gov/law/statutes/statute.aspx?id=57149","current_through":"Includes enactments through the 2026 Regular Session","vintage":"09/05/2026","retrieved_at":"2026-09-05T20:50:35Z","sha256":"a57c4f30f0843a1c22b37ffeb46347b6449dccd7058f7daf7b6ce1618b804d5c","source_id":"us-ky","stale":false,"prev":"us-ky/krs-141.416","next":"us-ky/krs-141.418"},"notice":"GroundRules: Original legal text. Not legal advice."}