On Friday the House passed H.R. 4213, the American Jobs and Closing Tax Loopholes Act of 2010, by a 215 to 204 margin. The bill provides year-long extensions retroactive to January 1 for energy and infrastructure tax credits, including a production tax credit for biodiesel and renewable diesel, and an excise tax credit for propane used as a transportation fuel.
H.R. 4213 was offset in part by increased oil spill taxes. Last-minute negotiations cut a previous version of the bill to $80 billion and split the measure in two parts because of emergency funding that was not offset. The House then voted 245 to 171 to pass another $23 billion section that extends Medicare payments to doctors for 19 months, which is not offset.
Given the oil spill cleanups efforts in the Gulf of Mexico, tax writing committees included language in H.R. 4213 to increase the per-barrel tax for the Oil Spill Liability Trust Fund from eight cents to 34 cents. In terms of a per gallon estimate, this will increase refined products from approximately two-tenths of cent per gallon to approximately eight-tenths of a cent per gallon. In advocating the increase, analysts expect the cost of cleanup in the Gulf of Mexico could surpass $14 billion and the oil spill liability fund only has $1.5 billion on hand.
HOUSE PASSES BIODIESEL TAX CREDIT
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While the divided vote on the measure allowed the House to pass the measure, the $63 billion of unpaid provisions and continued disagreement about the offsets will prove an obstacle to Senate passage. The Senate has adjourned for Memorial Day recess and will take up the tax extenders bill after they return next week. Sen. Charles Grassley (R-IA), one of the strongest advocates for biodiesel, plans to continue to push to extend the biodiesel tax credit as soon as possible when the Senate is back in session.
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