BIOMASS HUB

Last Friday, the US House of Representatives voted to pass legislation extending biodiesel tax credits for 2010.  The Senate will take up the bill in early June despite Sen. Grassley’s attempts to accelerate vote on the bill.

Watching the biodiesel tax credit drama unfold is a little like watching Forrest Gump practice ping pong.  But in this case, the lone wolf is Senator Grassley (R-IA), who has remained resolute in his support for reinstating a biodiesel tax credit since late 2009.

As a reminder of what his effort looks like:

But it appears he may not be playing solo anymore.  As the biodiesel industry has contracted in the wake of the credit’s expiration, a biodiesel tax credit extension package (in one form another) has gone back and forth between the House and Senate in 2010.

In December 2009, the House made the first move by passing The Tax Extenders Act of 2009 (H.R. 4213), which extended a $1 tax credit to biodiesel producers through December 2010.  As the Health care debate consumed Washington in the early part of 2010, the Senate was delayed in voting on the bill.  Then in February, as the snows melted after a historic snowstorm shut down Capital Hill, Senatars Baucus (D-MT) and Grassley (R-IA) introduced a bill that included a biodiesel tax break extension.  But the bill was stillborn and rewritted shortly after by Senate Majority Leader Reid (D-NV), who complained that the bill passed by the powerful Senate Finance Committee gave too many concessions to Republicans.  And in the middle part of last week, Grassley introduced a new biodiesel tax credit extension bill (S.3440), which was referred to the Senate Committee on Finance.

Meanwhile, last Friday, the House passed legislation by a 215 to 204 margin to extend tax credits for biodiesel and renewable diesel for a year up to December 2010, retroactive to January 2010.

Finally, the bill may now proceed to a conference committee of senators and representatives to work out differences in the versions of the bill each chamber approved.   The bill then goes to the President before becoming law.

The US Senate will take up the American Jobs and Closing Tax Loopholes Act of 2010 until after the Memorial Day recess.

Grassley attempted to secure a hearing for the legislation in the Senate on Friday, but was rebuffed.  He insisted to his Senate colleagues that it was a “simple and non-controversial” tax extension, that would reinstate more than 20,000 jobs nationwide.

Below, is an excerpt from his floor statement:

As the majority struggles in an attempt to jam another massive deficit spending bill through Congress, biodiesel plants in Iowa and throughout the country continue to lay off workers because the Democratically-controlled Congress has not extended the biodiesel tax credit.  This is a simple and non-controversial tax extension that will likely reinstate more than 20,000 jobs nationwide, and about 2,000 jobs in Iowa alone.

These jobs have fallen victim to a tactic used by the Democratic leadership to hold this popular and noncontroversial tax provision hostage to out-of-control deficit spending by Washington. This past February, I worked out a bipartisan compromise with Chairman Baucus to extend the expired tax provisions, including the biodiesel tax credit.  However, the Senate Democratic Leadership decided to put partisanship ahead of job security for thousands of workers, and that compromise did not move ahead.

So I am here again to try to put thousands of Americans back to work producing clean, renewable fuel.  Therefore, I ask unanimous consent to call up H.R. 4853, that my substitute, which contains a one-year extension of the biodiesel and renewable diesel tax credits for all of 2010, be agreed to and the bill as amended be read a third time and passed.

After his bid failed, Grassley commented:

I’ll continue to push to extend the biodiesel tax credit as soon as possible when the Senate is back in session, and I’ll keep trying until this tax credit is reinstated.

The National Biodiesel Board (NBB), which represents biodiesel producers in the US, said in a statement on Friday:

The biodiesel tax incentive has helped achieve the desired goal of increasing the domestic production and use of biodiesel, and in turn has helped the U.S. realize the energy security, economic and environmental benefits associated with displacing petroleum with domestically produced renewable fuels.  These benefits, however, will be lost if Congress does not act in a timely manner to address the immediate issue facing the industry and retroactively extend the biodiesel tax incentive.

More on the biodiesel tax extension bill.

Image: Flickr/rrelam