Senate Finance Committee member Sen. Maria Cantwell (D-WA) and ranking Republican Charles Grassley (R-IA) yesterday introduced a bill that would modify and extend the existing tax credit program for biodiesel.
• Change the incentive from a blender credit to a production tax credit. Producers of biodiesel would qualify for the entire $1/gallon credit without the need to blend their fuels with taxable (petroleum) fuels.
• Provide the $1 per gallon tax credit for the production of biodiesel, renewable diesel and aviation jet fuel that complies with fuel standards and Clean Air Act requirements that define qualified fuels under current law.
• For small producers, those with an annual production capacity of less than 60 million gallons, the credit increases from $1 to $1.10 for the first 15 million gallons of biodiesel produced.
• Simplify the definition of “biodiesel” to encourage production from any biomass-based feedstock or recycled oils and fats.
• Simplify the coordination between the income tax credit and the excise tax liability to tighten compliance and reduce administrative burdens on taxpayers.
• Extend this tax credit for five years, eliminating the uncertainty from the pending expiration at the end of 2009.
The bill is not yet available for download from Thomas but a pre-publication copy is available here.