Avoiding the "fiscal cliff" will clearly be an immediate, top priority for White House and Congressional leaders as they return to Washington, D.C., next week. How they deal with it could have significant implications for the future of sustainable bioenergy, agriculture, forestry, and conservation. A tax cut extenders package is likely to be part of the equation, and bipartisan legislation has been introduced in the Senate that would provide tax incentives for a variety of bioenergy technologies. In addition, Congress must complete the reauthorization of the Farm Bill and assure continuity and funding for critical conservation and energy programs.
Unless the President and Congress can reach an alternative agreement on tax and spending priorities and a long-term deficit reduction plan before the end of the year, a number of tax cuts enacted during the Bush Administration and in 2009 will expire, and more than $60 billion worth of federal spending cuts will automatically take place in 2013. The Congressional Budget Office estimates that allowing these tax increases and spending cuts to occur could reduce U.S. economic growth by about 0.5 percent and increase unemployment to 9.1 percent in 2013. Discussions between the White House and Congressional leaders will thus be focusing on tax and spending priorities for both the near-term and the long-term.
Anticipating this discussion the Senate Finance Committee approved, in early August, the Family and Business Tax Cut Certainty Act of 2012 (S. 3521) with strong bipartisan support. The bill amends and extends tax policies across a wide range of economic sectors. For bioenergy systems, it would extend the following incentives: 1) investment tax credit in lieu of production tax credit (including for a variety of types of biopower); 2) alternative fuel vehicle refueling property investment incentives; 3) cellulosic biofuels producer tax credit (including algae-based fuels); 4) incentives for biodiesel and renewable diesel; 5) cellulosic biofuels bonus depreciation; and 6) incentives for alternative fuel and alternative fuel mixtures. Check out the full summary here.
Also, as reported previously, Senators Bingaman (D-NM), Feinstein (D-CA), Snowe (R-ME), Merkley (D-OR), and Shaheen (D-NH) have introduced a bill to advance the expansion of renewable biomass thermal energy and biomass combined heat and power (CHP) in the U.S. The Expanding Industrial Energy and Water Efficiency Incentives Act (S. 3352) would expand the existing tax credit for CHP investment to larger systems and create a new investment tax credit for biomass thermal systems – the higher the efficiency, the higher the tax credit.
Regarding the Farm Bill reauthorization, see EESI’s previous SBFF post from October 5.