WASHINGTON – Sen. Chuck Grassley of Iowa secured renewal of expired wind energy tax provisions in a tax measure passed out of a key committee today. The tax package also includes a reinstatement of a tax incentive for domestic biodiesel, another long-time Grassley priority.
“Renewable energy supports thousands of jobs and generates billions of dollars in investment across the country,” Grassley said. “Public policy continues to help renewable energy develop and generate electricity and fuel from natural resources. It’s good news for the economy and for energy diversity to restore these provisions.”
The Finance Committee approved the wind energy and biodiesel provisions as part of a package reinstating tax provisions that expired in January. The Finance Committee chairman and ranking member included the biodiesel provision in their initial proposed bipartisan package. However, they excluded the wind energy provisions. Grassley then filed a bipartisan amendment to add the wind provisions. After hearing from Grassley, joined by other supporters, the committee chairman, Sen. Ron Wyden, accepted the Grassley amendment in a modified package that the committee approved today.
The Grassley provision approved in committee today reflects the law before it lapsed and extends the wind provisions for two years. As the law provided, the amendment allows qualified parties to take the production tax credit or the investment tax credit instead of the production credit. The provision is extended through Dec. 31, 2015.
The tax bill extends for two years, through 2015, the $1.00 per gallon tax credit for biodiesel, as well as the small agri-biodiesel producer credit of 10 cents per gallon. The bill also extends through 2015 the $1.00 per gallon tax credit for diesel fuel created from biomass.
Under current law, facilities producing cellulosic biofuel can claim a $1.01 per gallon production tax credit on fuel produced before the end of 2013. The bill extends this production tax credit for two additional years, for cellulosic biofuel produced through 2015.
Grassley said he hopes for full Senate consideration of the bill as soon as possible.
Grassley is a senior member and former chairman and ranking member of the committee. He is the father of the wind energy tax credit, having sponsored the first-ever provision enacted, and has sponsored and secured numerous extensions of the wind energy incentive since its creation.
An op-ed from Grassley, Sen. Mark Udall of Colorado, and Reps. Steve King and Dave Loebsack of Iowa on wind energy is available here.
More detail on the biodiesel production tax incentive is available here.
Grassley’s statement at the Finance Committee today follows.
Statement of Senator Chuck Grassley
Markup of the EXPIRE Act
April 3, 20014
Mr. Chairman, I want to thank you and Ranking Member Hatch for you and your staff’s hard work in putting this markup together. I am glad we are considering a two-year extension of expired tax provisions. I am hopeful this will provide a small window of certainty to taxpayers while allowing us to continue our work towards tax reform.
The annual stop and start nature of tax extenders creates uncertainty for taxpayers of all stripes. It often results in complications come filing season when tax forms are not ready and refunds are delayed.
It causes headaches for teachers purchasing school supplies, college students paying for higher education, and seniors making charitable donations from their IRAs. It further creates uncertainty for businesses, which harms investment and business growth.
The uncertainty it creates for the renewable industry has slowed growth in this sector. This serves only to hamper the strides made toward a viable self-sustainable renewable energy and fuel sector.
A strong vibrant renewable energy sector is good for jobs and economic growth. It is also vital for American security to foster the growth of homegrown fuels and energy. The recent take-over of Crimea by Russia is a prime example of why this is so important. We do not want to have our hands tied in foreign affairs as many in Europe have found themselves to be, due to their reliance on foreign sources of energy.
Due to both economic and security reasons, I am pleased the Chairman included the biodiesel credit in his original mark and has accepted my amendment to extend the wind production tax credit to the modified mark.
Renewable and alternative energy is not an answer on its own. There are four critical elements to a comprehensive energy policy. They are: drilling for domestic oil and gas, promoting renewable and alternative energy, supporting conservation, and nuclear energy. I support a real, all-of-the-above approach to energy security.
The Chairman has expressed his determination that this be the last extenders bill prior to comprehensive tax reform. It is in tax reform where we should consider the relative merits of alternative and renewable incentives, along with all other energy provisions.
Targeting certain energy provisions for elimination now makes little sense for those of us who want to reduce tax rates as much as possible. Tax reform provides an opportunity to use a realistic baseline that will allow the revenue generated from cutting back provisions to be used to pay for reductions in individual and corporate tax rates.
I look forward to working with the Chairman and Ranking Member to enact tax reform and put an end to the headaches and uncertainty created by the regular expiration of tax provisions. Right now our focus should be on extending current expired or expiring provisions to give us room to work toward that goal.
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