BCAP safe for now, 1603 Program extended

By Anna Austin | December 17, 2010

The biomass industry is heaving a sigh of relief for now, since the 2,000-page, $1.1 trillion 2011 Omnibus Appropriations Act will not go to vote in the Senate in its current form. Senate Majority Leader Harry Reid, D-Nev., announced Thursday night he would not bring the omnibus to the floor. The bill not only lacked Republican support, but faced opposition from some anti-earmark Democrats. All Democratic votes and two Republican votes were needed for passage.

The biomass industry has been in a state of panic because a section in the omnibus bill essentially stripped the Biomass Crop Assistance Program of its funding, as well as the Biorefinery Assistance program and Bioenergy Program for Advanced Biofuels. The industry has been scrambling for the past week to get the provision modified or eliminated, and though safe for now, the fight to keep BCAP funding in the bill will resume next year.

“They didn’t get 60 votes, so BCAP lives for another day and it’s going to be a big part of the BPA (Biomass Power Association) agenda in 2011 to keep that program going,” said Bob Cleaves, BPA president and CEO.

Reid announced that he and Sen. Mitch McConnell, R-Ky., would work on a continuing resolution, a shorter-term government funding bill.

In other positive news for the developing biomass industry, the House has passed the tax package, which contains a provision that continues the Section 1603 Program. The tax bill extends for one year the start-of-construction deadline for the for the cash grant in lieu of tax credit program, which was established in the Recovery Act.

The 1603 Program enables qualifying renewable power projects that are eligible for either the federal production tax credit or investment tax credit to instead elect a 30 percent project reimbursement cash grant administered by the U.S. Department of the Treasury. In order to reap that benefit, however, project construction had to begin by the end of 2010. Now, developers will have until the end of 2011 to begin construction to qualify for the program.