Tax Incentive Update from the National Biodiesel Board

Given the recent flurry of legislative activity in Washington, DC, the National Biodiesel Board has provided the biodiesel industry and its supporters with an update on the status of legislation pending before Congress to extend the biodiesel tax incentive.

March 19, 2010

The U.S. House of Representatives currently remains focused on health care reform, and the Obama Administration and House Speaker Nancy Pelosi’s Leadership team continue working to secure the votes necessary to approve health care reform legislation. Extension of the biodiesel tax incentive has never been and is not currently being considered as part of this package.

On March 17, the U.S. Senate approved H.R. 2847, the Hiring Incentives to Restore Employment (HIRE) Act, by a 68-29 vote. This legislation, which represents the first jobs bill considered by Congress this year, provides hiring credits, highway funding, extension of higher small business expensing thresholds, and a Build America Bonds (BAB) provision. Senate Majority Leader Reid made a decision in February to place a higher level of priority on passing these items, and thus, the extension of expiring tax provisions, including the biodiesel tax incentive, was not considered as part of this legislation. H.R. 2847 was signed into law by the President March 18.

On December 9, 2009, the U.S. House of Representatives approved H.R. 4213, the Tax Extenders Act of 2009 by a 241-181 margin. This legislation, among its provisions, provides a one year extension of the biodiesel tax incentive. Overall, H.R. 4213 extended 49 of the 73 tax provisions that expired on December 31, 2009.

On March 10, 2010, the U.S. Senate voted to approve its version of H.R. 4213, the American Workers, State, and Business Relief Act of 2010, by a 62-36 margin. Like the version of H.R. 4213 approved by the U.S. House, the U.S. Senate legislation provides a one year retroactive extension of the biodiesel tax incentive.

There are, however, differences between the respective versions of H.R. 4213 approved by the U.S. House and the U.S. Senate, and these differences will have to be reconciled and both chambers will have to approve an identical bill before it can be presented to the President for his signature. U.S. Representative Sander Levin (D-MI), the new Chairman of the U.S. House Committee on Ways and Means, has signaled his desire to begin working with the U.S. Senate to reconcile these differences and craft a final product. However, it appears increasingly unlikely that this process will conclude prior to March 26, 2010 when Congress is scheduled to adjourn for two weeks for the Easter Holiday.

It is absolutely vital that Members of Congress hear from you about the time sensitive nature of this issue and the negative impact the continued lapse of the biodiesel tax incentive is having on the U.S. biodiesel industry. Accordingly, biodiesel stakeholders are strongly encouraged to contact their federal elected officials, in particular their U.S. House Representative, and convey to them the need to retroactively extend the biodiesel tax incentive in a timely fashion. NBB’s Washington, DC office will continue to push Congress to act on this issue and will provide you with updates as events warrant.

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