US Senate Finance Committee advances four key biofuels tax provisions

In Washington, Senate Finance Committee Chairman, Ron Wyden, released his “Chairman’s Mark” of the “Expiring Provisions Improvement Reform and Efficiency Act of 2014” (EXPIRE Act).

The Chairman’s Mark extends all expired advanced biofuels tax provisions 2 years through December 31, 2015.

Proposed extensions are for the Second Generation Biofuel Producer Tax Credit, Special Depreciation Allowance for Second Generation Biofuel Plant Property, Biodiesel and Renewable Diesel Fuels Credit, and the Alternative Fuel and Alternative Fuel Mixture Excise Tax Credit.

In a statement, BIO noted that “This puts us on the strongest possible footing headed into the Finance Committee markup scheduled for Thursday.”

Extension of second generation biofuel producer credit

(sec. 40(b)(6) of the Code)
Description of Proposal: The proposal extends the credit for two years, through December 31, 2015.
Effective Date: The proposal is effective for fuel sold or used after December 31, 2013.

Special depreciation allowance for second generation biofuel plant property

(sec. 168(l) of the Code)
Description of Proposal: The proposal extends the present law special depreciation allowance for two years, to qualified second generation biofuel plant property placed in service prior to January 1, 2016.
Effective Date: The proposal applies to property placed in service after December 31, 2013.

Incentives for biodiesel and renewable diesel

(secs. 40A, 6426 and 6427(e) of the Code)
Description of Proposal: The proposal extends the income tax credit, excise tax credit and payment provisions for biodiesel and renewable diesel for two years (through December 31, 2015).
Effective Date: The proposal is effective for sales and uses after December 31, 2013.

Alternative fuel and alternative fuel mixtures

(including hydrogen) (sec. 6426 and 6427(e) of the Code)
Description of Proposal: The proposal extends the alternative fuel and alternative fuel mixture tax incentives through December 31, 2015 (including those related to hydrogen).
Effective Date: The proposal is generally effective for fuel sold or used after December 31, 2013. As it relates to hydrogen, the proposal is effective for fuels sold or used after September 30, 2014.

Reaction from the Hill

“We applaud Chairman Wyden for including renewal of essential advanced biofuels tax incentives in the extenders legislation he unveiled today”,” said ABFA President Mike McAdams. “These credits are vital to the ongoing development of the advanced biofuels industry, and our members appreciate the certainty of a two-year extension.  In conjunction with a robust Renewable Fuel Standard, this legislation will help keep people in their jobs and clean gallons of renewable fuel flowing.  Manufacturers of advanced and cellulosic biofuels urge swift passage by both the House and Senate to send markets a strong signal of continued Congressional support for our emerging industry.”

The Chairman’s Mark of the EXPIRE Act can be downloaded here.