It’s been a good month for those of us who appreciate renewable energy. With my work and support from both sides of the aisle, the committee of jurisdiction approved renewing tax incentives for wind energy, biodiesel and cellulosic ethanol. The bill contains a change to the biodiesel tax credit for the period extended to make it even easier to use and more supportive of the domestic industry over foreign-made biodiesel.
Renewable energy supports thousands of jobs in Iowa, 7,100 jobs in biodiesel alone. These energy sources are appealing to consumers, whether they’re Internet businesses that locate data centers in Iowa in part to take advantage of our abundant wind energy or drivers who want a clean, domestic fuel for their tractors, trucks and cars with diesel engines.
The ongoing turmoil in the Middle East underscores the importance of building energy independence at home. Using biodiesel from domestic sources such as recycled cooking oil, soybean and other plant oils, and animal fats is preferable to getting petroleum products from countries subject to instability or hostile to the United States.
The proposed change in the biodiesel provision would create a tax credit for those who produce the fuel instead of those who blend it (with an exception for major blenders that have invested in infrastructure). A credit for domestic production also would ensure that our tax policy incentivizes a domestic industry instead of subsidizing imported biofuels. It’s projected that imports from Argentina, Singapore, the European Union and South Korea could exceed one billion gallons in 2016 and 2017. The United States should not provide a U.S. taxpayer benefit to imported biofuels. By restricting the credit to domestic production, we would save taxpayer money and reduce the cost of the extension by $90 million.
In addition to the energy provisions, the tax bill out of the Finance Committee includes other priorities of mine: an above-the-line deduction for higher education expenses (such as tuition) and a deduction for elementary and secondary school teachers who buy classroom supplies out of their own pockets. The bill also includes deductions for equipment purchases that are important to businesses and farmers who invest in equipment for their operations, which create and sustain jobs.
The timing of the committee consideration is earlier than usual for these provisions. Under past leadership, Congress has waited until the last minute, causing problems for the individuals and business owners who can’t plan expansions or investments around uncertain tax policy. I’ll continue to do everything I can to encourage early consideration of and final approval of the tax incentives that are meaningful in Iowa and nationwide.