House Subcommittee Holds Hearing on Expired Tax Provisions Including The Biodiesel Blenders’ Credit

On Wednesday, the House Committee on Ways and Means Subcommittee on Tax Policy held a hearing titled “Post Tax Reform Evaluation of Recently Expired Tax Provisions” during which lawmakers and witnesses discussed some of the recently expired tax provisions, known as “tax extenders,” and whether some of them should be extended under the newly reformed tax code. The hearing included twenty-one witnesses representing various organizations that were organized into four different panels.

In his opening statement, Tax Policy Subcommittee Chairman Vern Buchanan (R-FL) stated that after last year’s comprehensive tax reform, “we need to turn our focus to maintaining it and making further refinements and enhancements” and said, “it should not be business as usual with respect to the tax extenders.” He added, “Now is the time to examine each of these provisions one-by-one to determine whether and how they fit into the new tax code.”

Michael McAdams, president of the Advanced Biofuels Association, offered testimony on behalf of a coalition of groups including PMAA, ATA, ABFA, NATSO, NACS and SIGMA. In his remarks, McAdams expressed support for an extension of the $1-per-gallon biodiesel blenders’ tax credit and opposition to converting the biodiesel blenders’ credit to a producers’ credit. Recognizing that the Ways and Means Committee decided to phase out other tax incentives instead of immediately terminating them, McAdams stated, “While we believe the biodiesel and renewable diesel tax incentives should be made permanent, we understand that there may not be a consensus to do so.” He added, “Handled responsibly, our coalition believes that a multi-year phase out of the tax incentive can achieve the same economic and environmental benefits that the $1 credit has achieved for more than a decade. We are eager to work with the Committee on identifying a responsible path forward in this respect. Although our coalition would support phasing out the credit over a period of years, it is imperative that the credit be extended at $1 per gallon for 2018. Given that Congress has frequently extended the credit retroactively, including most recently in February 2018 for all of 2017, market participants have come to reasonably rely on the credit being retroactively extended when undertaking business and investment decisions. This includes decisions made already in 2018. To protect these market participants from unanticipated changes in policy, the existing provisions should be extended in full for at least this year.”

PMAA, along with other members of the coalition, submitted comments for the hearing record to the House Ways and Means Committee urging for an extension of the existing biodiesel and renewable diesel tax incentives and have expressed support for H.R. 3264, known as the “Biodiesel, Renewable Diesel, and Alternative Fuels Extension Act of 2017.” The legislation, introduced by Reps. Diane Black (R-TN) and Ron Kind (D-WI), would extend the biodiesel blenders’ tax credit and phase it out over five years.