Senate Finance Committee Chairman Max Baucus, D-Mont., and Ranking Member Chuck Grassley, R-Iowa, last week released a draft of their Hiring Incentives to Restore Employment (HIRE) Act.
The bill contains a number of provisions intended to spark new hiring, including a social security tax holiday for workers hired during 2010.
Of interest to the renewable energy industry is the bill’s provision to extend the alternative fuel mixture credit for another year. The AFM credit, which expired December 31, 2009, was omitted from other tax extender bills submitted earlier, but under the HIRE Act would be extended through 2010.
The HIRE Act would also revise the definition of “liquid fuel derived from biomass” under 6426(d)(2)(G) to exclude black liquor. This Senate Finance draft version of this jobs bill differs from House legislation. The House Ways and Means extenders bill allowed the 6426(d)(2)(G) “liquid fuel derived from biomass” provision to expire as of 12/31/09. Both versions would also extend the cellulosic biofuel credit under Section 40 of the Internal Revenue Code and would likewise exclude black liquor from its definition.
The lapse of the alternative fuel mixture credit has created substantial problems for the biofuels industry and many plants were shuttered at the end of the year. New financings have come to a halt as project developers are waiting to see whether the tax credit program will be extended. Extending the excise tax credit program should re-start many of those plans.