A provision in the health care bill passed by the House of Representatives over the past weekend (H.R. 3962) would cut the tax credits currently benefitting cellulosic ethanol and other biofuel tax producers.
Section 555 of the bill excludes from the cellulosic biofuel producer credit (under Section 40(b)(6) of the Internal Revenue Code) any fuel that (a) consists of more than 4% water and sediment or (b) consists of more than 1% ash.
In an attempt to generate revenues to pay for the costs of expanded health care, the House bill eliminated tax credit provisions that are expected to return $24 billion to the U.S. Treasury over the next 10 years. Members of the House from Midwestern and other farm states who voted in favor of the bill have already staked out positions in favor of eliminating the tax credit cut in the final version of the health care bill.