As Congress works to conclude business before adjourning for the year, reinstatement of the biodiesel tax credit is still pending and the American Soybean Association (ASA) is asking growers to contact your House and Senate offices to reiterate soybean industry support.

ASA continues to work for enactment of a tax extenders package that includes a multi-year extension of the biodiesel tax credit and we will continue to update you on developments.

Last week updated stand-alone, marker legislation was introduced in the House and Senate to reinstate the biodiesel tax credit and reform it to a producer’s credit beginning in 2016. The House bill was introduced by Rep. Kristi Noem (R-SD) and Rep. Bill Pascrell (D-NJ), while the Senate version was introduced by Sen. Charles Grassley (R-IA) and Sen. Maria Cantwell (D-WA) as an update to their earlier legislation that passed the Senate Finance Committee in July.

In addition to restructuring it from a blender’s to a producer’s tax credit to further bolster the domestic biodiesel industry and reduce costs, the bills also include an important technical update ensuring that biodiesel used on-farm, as Bioheat, or other off-road applications will not incur excise tax at any point and avoids the need for a refund process for those applications.

Senators and Representatives are urged to sign-on to the Grassley-Cantwell and/or Noem-Pascrell marker bills to demonstrate support for the biodiesel tax credit as Congress negotiates the parameters of a tax extenders package.

The biodiesel tax credit expired again on Dec. 31, 2014. Extension of the tax incentive is critical to the industry’s existence and growth.  In July, the Senate Finance Committee passed a tax extenders package that includes a two year extension of the biodiesel credit retroactive for 2015 and through Dec. 31, 2016.  It would remain a blender’s credit for 2015 but shift to a producer’s credit for 2016.

ASA, along with our partners at the National Biodiesel Board (NBB), support a restructuring of the tax credit from a blender’s credit to a production tax credit

Shifting from a blender’s credit to a producer’s credit would restrict the ability of foreign subsidized biodiesel – often coming from countries that do not allow reciprocal access to their markets for U.S. biodiesel - to displace domestically produced biodiesel in our own market. Shifting to a production credit would also reduce the score for the cost of the biodiesel tax credit.

This change will further support domestic biodiesel production versus imported biodiesel, improve administration of the incentive, eliminate potential abuses and improve tax compliance. Shifting to a production credit would also reduce the score for the cost of the biodiesel tax credit.

Visit the Soy Action Center, for an email with background and talking points for your use in communicating with congressional offices.

If you have any questions, please contact Tom Hance in the ASA Washington office at: thance@gordley.com or 202-969-7040.