We Survived the "Fiscal Cliff," Now it's Time for Lawmakers to Take on Appropriations and the Farm Bill

By Erin Voegele | January 03, 2013

It was generally good news for the biomass industry when President Obama signed the American Taxpayer Relief Act of 2012 into law on Wednesday. The legislation included a wide variety of provisions to benefit the bioenergy industry, including the extension of production tax credits for cellulsoic biofuels and biodiesel/renewable diesel.

In addition, the law extends the special allowance for cellulosic biofuel plant property, and provides parity for the algae industry by allowing algae production to qualify for plant property credit as well as the production tax credit for cellulosic biofuels.

For the biomass power industry, the legislation also includes language that allows certain closed-loop biomass, open-loop biomass and biogas facilities to continue to qualify for renewable energy production tax credits.

While there has been a great deal of concern in the biomass industry about the inability of congress to pass a new multi-year version of the Farm Bill, that concern has been temporarily averted, sort of. The American Taxpayer Relief Act of 2012, or “fiscal cliff bill,” has included a nine-month extension of the Farm Bill’s Energy Title programs, such as the Biomass Crop Assistance Program. Lawmakers however, eliminated mandatory funding for the programs just before the vote to pass the bill.

Obviously, this is far from ideal.

As Todd Atkinson, senior energy advisor for the USDA Undersecretary of Farm and Foreign Agriculture Service pointed out in Luke Geiver’s article, “USDA’s senior energy advisor explains BCAP after cliff deal,” it is possible that the programs could be funded in the USDA’s annual appropriations bill.

If the 2013 version ever gets passed and signed into law, that is.

Back in Feb. 2012, the White House released its Fiscal Year 2013 budget request for the USDA, asking for $23 billion in discretionary funding. Approximately $6.1 billion of that was slated for renewable energy and energy and environmental improvements. A total of $11 million was requested for BCAP and $171 million to support biobased fuel production, with some of that funding to subsidize biojet production. The request did not include specific funding amounts for several Farm Bill programs, as those initiatives were noted as subject to reauthorization, including the Biorefinery Assistance Guarantee Loans, Rural Energy for America Loans, Rural Energy for America Grants, and the Bioenergy for Advanced Biofuels program, as well as the Biomass Research and Development program and the Biodiesel Fuel Education Program.

The Senate Appropriations Committee passed its USDA appropriations bill in April, but the measure has yet to be addressed by the full Senate. Similarly, the House Appropriations Committee passed its bill in June, but the House has yet to take action.

The 2013 Fiscal Year began on Oct. 1, 2012. Since congress had failed to reach any sort of agreement on regular appropriations bills before the start of the new fiscal year, a temporary spending bill was passed and signed into law. The temporary measure essentially funds the government through March 27, 203—generally at funding levels set by the prior year’s Budget Control Act.

Federal lawmakers have also, to date, failed to pass a new multi-year version of the Farm Bill. Earlier this week, Secretary of Agriculture Tom Vilsack released a statement stressing that he will continue to push for a new Farm Bill. "I am pleased that Congress passed needed middle class tax relief and continued unemployment insurance protection for 2 million unemployed Americans,” he said. “However, while I am relieved that the agreement reached prevents a spike in the price of dairy and other commodities, I am disappointed Congress has been unable to pass a multi-year reauthorization of the Food, Farm and Jobs bill to give rural America the long-term certainty they need and deserve. I will continue to work with Congress to encourage passage of a reauthorized bill that includes a strong and defensible safety net for producers, expanded rural economic opportunity in the new bio-based economy, significant support for conserving our natural resources, increased commitment to important research, and support for safe and nutritious food for all Americans. I look forward to continuing the effort to get this critical work done."

No matter which side of the political isle you fall on, one thing is certain—the inability of our lawmakers to get anything done has to stop. Right. Now.

Jan. 3 marked the beginning of the 113th Congress. I hope this congress proves to be much more productive than last year’s. We can’t afford to let another year go by with our federal spending programs patched together with short-term, temporary fixes. That kind of uncertainty isn’t good for any of America’s industries, including the renewable energy sector. Investors and project developers need certainty. I hope the new crop of lawmakers will be able provide it.