The Senate Finance Committee last week passed a tax extenders package with a two-year extension of a wide variety of tax credit extensions, including a two-year extension of the renewable production tax credit. The credit can be claimed as a 2.3 cent per kWh tax credit for renewable electricity, or an alternative 30 percent investment tax credit. The credits, which expired at the end of last year, would be extended through the close of 2016.
The bill extends tax credits for biodiesel and renewable diesel for two years, through 2016. The extension would apply to the $1-per-gallon credit for biodiesel and renewable diesel, and the 10-cent-per-gallon small agri-biodiesel producers’ credit. And it contains a provision extending the $1.01 per gallon production tax credit for cellulosic biofuels, which expired at the end of last year, through 2016.
During the hearing to address the extenders package, the committee accepted an amendment offered by Sen. Chuck Grassley, R-Iowa, to change the biodiesel fuels tax credit from a mixture credit to a production credit. During the hearing, Grassley explained that the amendment would help ensure the credit benefits only domestic biodiesel production and doesn’t subsidize imported biofuels. Grassley said, “By restricting the credit to domestic production, we’ll save tax payers money and reduce the cost of the extension by $90 million.”
In addition, the package includes a two-year extension of the special depreciation allowance for second-generation biofuel plant property and the alternative fuel mixture excise tax credit.
Despite all the Congressional activity, its uncertain if any of the three bills can become law. As is often the case with Congressional efforts, amendments to the bills on various issues can jeopardize the broad support, and leadership has not yet established plans to move the bills to a final vote.