Citing its unknown effect on the state’s budget, Montana Gov. Brian Schweitzer vetoed a biodiesel tax incentive bill Tuesday, May 8. The bill (HB 822) didn’t pass with a two-thirds majority and it’s not likely that Schweitzer’s veto will be overridden.

According to Schweitzer, his reason for vetoing the bill was that the Montana Legislature has yet to pass a state budget for 2008-2009 and that the bill’s estimated $3 million price tag would have an undetermined impact on the state’s bottom line.

HB 822 would give an annual tax credit of up to $500 to consumers who purchase biodiesel from producers, distributors or retailers from 2008 through 2013. For individuals, the tax credit could be used toward individual income tax. Businesses with fewer than 16 employees could use the credit in conjunction with deductions for fuel used by the business while corporations could apply the credit toward corporate license tax liability.

Another biodiesel bill (SB 432) failed to make it to Schweitzer’s desk after passing the Senate by a vote of 35-15, but failing to make it to the House floor after being stopped in the House Transportation Committee. That bill would have mandated biodiesel use in the state, beginning with a B2 requirement and evolving to B5 as biodiesel refining production in the state allows.

Schweitzer plans to hold a special legislative session to give the state’s governing body to pass a budget and resolve issues resulting from the budget.