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Iowa’s three Democratic representatives in the U.S. House have penned a letter to the chamber’s leadership requesting that a 2010 renewal of the biodiesel tax credit be made a priority. If members of the U.S. Senate do not act on last year’s program extension, however, it might be a moot point.
Creative Commons photo by turtlemoon via Flick
The letter, penned by U.S. Reps. Leonard Boswell, Bruce Braley and Dave Loebsack, marks the second time the trio has encouraged continued support of the biodiesel tax incentive. On Dec. 22 the lawmakers sent a letter to Senate leadership in a failed attempt to encourage that body to act on legislation to extend the tax before it expired at the end of the year.
Sens. Chuck Grassley and Tom Harkin both support the extension of the tax credit, which provides biodiesel producers with a $1 per gallon tax credit, but do not agree on why the 50-provision tax extenders bill has not already been approved by the Senate. Each blames stalling tactics and issue jockeying by members of the other political party for the failure to obtain passage, and both have called for a retroactive approval of the incentive once the Senate resumes work this month.
“[R]etroactively doesn’t help the U.S. biodiesel market from grinding to a halt on Jan. 1, 2010, because, without the incentive, biodiesel will cost much more than petroleum diesel,” Grassley said during a December floor statement.
The U.S. House approved HR 4213, the Tax Extenders Act of 2009, in early December by a mostly party-line vote of 241 to 181. While the Democratic members of Iowa’s delegation voted in favor of the measure, Iowa’s Republican representatives — Steve King and Tom Latham — voted against it. That piece of legislation extended the biodiesel incentive for one year.
The incentives, according to Braley, are “crucial” if Iowa wishes to remain at the forefront of biodiesel production. Loebsack believes that continuing the tax credit can help Iowa families, already struggling, to obtain jobs.
Boswell noted that “biodiesel plants in my district are already struggling during these difficult times” and that the credit “is an important tool to maintaining and creating jobs in states like Iowa that produce biodiesel and to help sustain an industry that plays a critical role in the economy, environment and fuel supply.”
Below is the letter written to House leaders:
January 8, 2010
Dear Speaker Pelosi and Majority Leader Hoyer:
Last year, Congress did not extend a tax incentive that is critically important to the state of Iowa. The biodiesel tax credit ensures that biodiesel remains competitive with conventional diesel fuel.
Allowing this tax credit to lapse at the end of 2009 has undermined the economic, security, and environmental benefits associated with domestic production and use of biodiesel. As we speak, Iowa biodiesel plants are shutting down. This will lead not only to devastating job losses in the industry, but also decrease demand for soybeans and lower prices, resulting in lost tax revenue for our state and local governments. With unemployment nationwide at 10 percent, this tax credit will help sustain an industry that provides multiple benefits to the economy, the environment, and fuel supply.
Last year, the U.S. biodiesel industry supported 51,893 jobs in all sectors of the economy. This added $4.287 billion to the nation’s GDP and generated $866.2 million in tax revenue for federal, state and local governments. The 690 million gallons of biodiesel produced in 2009 displaced 38.1 million barrels of petroleum with a clean-burning, efficient fuel grown in the United States.
We write to urge quick passage of the biodiesel tax credit as soon as the House begins the second session of the 111th Congress.
Thank you for your timely consideration of this request and your leadership to move the renewable fuel industry into the 21st century. Please feel free to contact our offices if we can provide additional information on the importance of the biodiesel tax credit.
Sincerely,
Bruce Braley (IA-1)
Leonard Boswell (IA-3)
Dave Loebsack (IA-2)
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