Senators take action on tax incentive proposals
The biofuels industry has long benefited from the availability of production tax credits. Thanks to legislation introduced by Sen. Debbie Stabenow, D-Mich., the biochemical sector may soon be able to take advantage of similar incentives.
The bill, titled “The Qualifying Renewable Chemical Production Tax Credit Act of 2012,” or S. 3491 was introduced August 2 and referred to the Committee on Finance.
As of August 9, the text of the legislation hadn’t yet been published by the Government Printing Office, and was not available online. I’ve been in contact with Stabenow’s office, and am hopefully they can send me a copy of the bill by the end of the week.
Without the actual text of the bill, it’s impossible to tell what specific provisions it might include. However, I have a good hunch that the content will be similar—if not identical—to a bill introduced in the House in May by Rep. Bill Pascrell, D-N.J., which was also titled “The Qualifying Renewable Chemical Production Tax Credit Act of 2012.” That bill’s number is H.R. 4953.
The House version of the bill seeks to establish a production tax credit of 15 cents per pound of eligible content of renewable chemicals, and would not apply to chemicals that contain less than 25 percent renewable content.
If the legislation is signed into law, it could offer powerful incentives to biochemical producers, helping to drive development of the sector.
The Biotechnology Industry Organization issued a statement in support of Stabenow’s bill. Brent Erickson, executive vice president of BIO’s Industrial & Environmental Section has pointed out that the biobased chemical industry could provide important opportunities to revitalize manufacturing in the U.S.
“The introduction of the Qualifying Renewable Chemical Production Tax Credit Act is a step forward to level the playing field for the burgeoning industrial biotechnology sector in the United States,” said Oliver Peoples, chief scientific officer at Metabolix in Cambridge, Mass. “If passed, this move will spur investment and industry job growth stateside, help drive innovation and keep U.S. biotechnology in the lead internationally.”
However, Stabenow’s bill isn’t the only piece of legislation that could benefit the biomass industry. The U.S. Senate Committee on Finance has approved the Business Tax Cut Certainty Act of 2012, which would extend and expand several tax credits that benefit the biopower and biorefining industries. Some key provisions include extension of the cellulosic and renewable diesel production tax credits, as well as new definitions that make algae an eligible feedstock for cellulosic biofuel production. For biopower producers, the window to claim a production tax credit would be extended, and qualified producers could elect to take an investment tax credit in its place. The legislation also includes powerful incentives for research and development, facility development and other development and commercialization activities.