WASHINGTON, DC, October 12, 2004 (ENS) – The first biodiesel tax incentive was approved by the U.S. Senate Monday, to the applause of the American Soybean Association, the National Biodiesel Board, soybean farmers and biodiesel enthusiasts who run their cars on the vegetable based oil. The House passed the bill on Friday. Lawmakers passed the incentive as part of H.R. 4520, legislation concerning the Foreign Sales Corporation/Extraterritorial Income Tax, also known as the American Jobs Creation Act of 2004 – it will create biofuels jobs.
American Soybean Association president Neal Bredehoeft, a soybean farmer from Alma, Missouri, called the Senate approval, "a defining moment for the future growth of biodiesel in the United States."
Passage of the biodiesel tax incentive would not have happened without the steadfast commitment of Senator Chuck Grassley, an Iowa Republican, Senator Blanche Lincoln, an Arkansas Democrat, Congressman Kenny Hulshof, a Missouri Republican, and others, Bredehoeft said.
The biodiesel tax incentive, which is structured as a federal excise tax credit, amounts to a penny per percentage point of biodiesel blended with petroleum diesel. Biodiesel, derived from soybeans or other field crops, is often blended 20 percent to 80 percent with petroleum diesel. In this form diesel engines can burn the bio-fuel without modification.
Based on the USDA baseline estimates for future soybean production, over a five year time period the biodiesel tax provisions could add almost $1 billion directly to the bottom line of U.S. farm income, Bredehoeft said. The provisions "could increase U.S. gross output by almost $7 billion," he predicted.
National Biodiesel Board Executive Director Joe Jobe said, "All biodiesel consumers will benefit from this legislation, including those in tax exempt markets, like school districts.
The last step is for President George W. Bush to sign the bill; he is expected to do so within 10 days.
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