WASHINGTON – A new bipartisan bill aimed at reinstating a tax incentive for the production of domestic biodiesel has been introduced in the Senate by Sens. Maria Cantwell of Washington and Chuck Grassley of Iowa. They say the incentive will help spur job creation and boost the nation?s supply of cleaner alternatives to imported fossil fuels.
The Biodiesel Tax Incentive Reform and Extension Act of 2014 would reform and extend the $1.00-per-gallon tax credit for biodiesel producers through 2017. Congress has allowed it to expire three times since the end of 2009, most recently at the end of 2013. A statement from both Senators alleges biodiesel industry growth stopped after Congress let the credit expire in 2012, and that production remained flat at just under 1.1 billion gallons. But when the credit was reinstated in 2013, the Senators says the U.S. biodiesel industry produced 1.8 billion gallons.
Specifically, the legislation would provide a $1.00-per-gallon tax credit for the production of biodiesel, renewable diesel and aviation jet fuel which complies with fuel standards and Clean Air Act requirements. The Cantwell-Grassley bill would also increase the credit from $1.00 to $1.10 for the first 15 million gallons of biodiesel produced by small producers whose annual output capacity is less than 60 million gallons. The measure is also aimed at eliminating abuses and simplifying how the tax is administered, by restricting the credit to fuel producers and excluding fuel blenders from eligibility. Cantwell-Grassley would simplify the definition of biodiesel to encourage production from any biomass-based feedstock, or recycled oils and fats and would tighten compliance and reduce administrative burdens on taxpayers by simplifying the coordination between the income tax credit and the excise tax liability.
If passed the measure would extend the tax credit for three years.
