Biodiesel, wind energy to benefit (briefly) from tax breaks
WASHINGTON – The wind and biofuel industries in Iowa will benefit modestly from a $41 billion package of tax breaks passed by the Senate late Tuesday, but only through the end of 2014.
President Barack Obama is expected to sign the package of nearly 50 tax breaks, which passed by a vote of 76-16. The legislation would reinstate production tax credits for wind power, cellulosic ethanol and a $1-a-gallon credit that helps the biodiesel industry for a year.
But the tax breaks, which are retroactive to when they expired at the beginning of the year, will be in place for only about two more weeks, providing little assistance to groups and producers in Iowa.
"While we greatly appreciate the retroactive extension of these tax credits that are vital to the production of cleaner-burning advanced biofuels for 2014, in only a matter of days they will lapse once again," said Monte Shaw, executive director of the Iowa Renewable Fuels Association. "We urge the next Congress to act swiftly to extend these important provisions for 2015."
The tax breaks are crucial to Iowa, the country's top producer of renewable fuels. The state potentially can produce more than 3.8 billion gallons of ethanol and nearly 315 million gallons of biodiesel annually. The Hawkeye State also generated more than 27 percent of its electricity from wind power in 2013, a larger share than any other state.
Ron Wyden, chairman of the Senate Finance Committee, acknowledged the extensions are of little use for wind, biofuel and other interests that made production decisions several months ago based on the tax breaks in place then. He said two weeks is not enough time to "catalyze growth" among businesses, start a clean energy project or hire new workers.
"I want … to end the cycle of stop-and-go policy that leaves taxpayers in the dark time and time again," said Wyden, an Oregon Democrat. "Retroactive tax bills like the one before the Senate tonight may satisfy Congress, but they leave workers, families and businesses wanting. It's time for Congress to do the hard work of tax reform."
Iowa Sens. Tom Harkin and Chuck Grassley, a member of the Senate Finance Committee, both voted for the tax-credit legislation Tuesday.
It's uncertain whether Congress will be able to move forward with a long-term tax break package next year, when Republicans will take over control of the Senate and expand their majority in the House. Many current and incoming GOP lawmakers, including Sen.-elect Joni Ernst, oppose subsidies and a government role in picking winners and losers.