Deal on Biodiesel, Railroads Credits Hinges on Broader Tax Package
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Congressional leaders are close to a deal that would extend a slew of expired incentives for biodiesel, alcoholic beverages and short-line railroads, though it could depend on completing a broader tax compromise in time to add the provisions to a must-pass spending bill.
Top House and Senate officials negotiating through the weekend tentatively agreed to renew those “tax extenders,” including a $1-per-gallon credit for biodiesel typically made from soybeans and used cooking oil, according to three people familiar with the matter. Under the working compromise, the credits -— many of which expired almost two years ago — would be retroactively renewed and extended through the end of 2020, said the people, who asked not to be named discussing private deliberations.
The tax package isn’t expected to be ready in time to be included in the version of a government spending bill set to be released at noon Dec. 16, though negotiators are seeking to incorporate it later in the day when House representatives consider rules for debating the legislation.
Separately, optimism was fading Dec. 16 among lobbyists pushing for billions of dollars in clean energy tax breaks for wind farms, solar arrays and electric vehicles.
Supporters of the biodiesel tax credit, including producers of the alternative fuel and oil refiners required to use it, have warned that without renewal, more manufacturing plants could shut early next year, building on 10 closures already.
The biofuels and tax extenders deal could depend upon Republicans and Democrats hashing out a broader compromise that could include new tax breaks for retirement savings and repealing some levies funding the Affordable Care Act.
Lawmakers negotiated over the weekend, but had failed to come to an agreement on those broader tax issues as of the morning of Dec. 16, said Ashley Schapitl, a spokeswoman for Sen. Ron Wyden, the top Democrat on the Senate Finance Committee. A final deal needs to be reached by the evening of Dec. 16 to give the House and Senate enough time to vote on the spending bill to avert a government shutdown before federal funding lapses Dec. 20.
In addition to the biodiesel credit, the extenders provisions would renew incentives supporting racetracks, film production, short-line railroads, alcoholic beverages and other industries.
The White House has been lobbying Republicans against renewing tax credits that support alternative power and electric vehicles, according to two people familiar with the matter.
Electric-car makers such as General Motors Co. and Tesla Inc. had been asking Congress to expand a consumer tax credit for electric-vehicle purchases. That $7,500 credit is still in effect, but manufacturers are limited to claiming 200,000 of them, and both GM and Tesla have already reached the cap.
Separately, the solar energy industry has been pushing for a multiyear extension of a 30% tax credit set to begin phasing out in 2020. Also hanging in the balance are an extension of credits for wind power and the creation of new credits for energy storage.
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