The US Senate approved an $858 billion package of tax cuts and credits Wednesday, advancing the plan – which includes major extensions of ethanol tax credits and renewable energy initiatives – to the House of Representatives.
Senators voted 81-19 to approve the plan, which continues middle- and upper-income tax cuts made by former President George W. Bush and extends a plethora of other programs.
Included in the Senate-approved bill are extensions of the so-called “Section 1603” funding for renewable energy projects, a 45-cent/gal credit for blenders to add ethanol to their gasoline mixes and a 54-cent/gal tariff on imported ethanol.
“This vote brings us one step closer to ensuring that middle class families across the country won’t have to worry about a massive tax hike at the end of the year,” President Barack Obama said in a statement Wednesday afternoon.
Ethanol producers sought the one-year extension of the Volumetric Ethanol Excise Tax Credit, (VEETC) and the tariff. While groups representing the solar and wind energy industries have pushed heavily for the Section 1603 renewable energy funding extension which covers upfront up to 30% of the cost of a project.
“This bipartisan vote shows that the Senate is committed to enacting sound tax policies that invest in green industries, like ethanol, to reduce our dependence on foreign oil, create jobs here in the United States, improve our environment and strengthen our national security,” said Tom Buis, CEO of Growth Energy, a Washington-based group representing the ethanol industry.
The Solar Energy Industries Association, a Washington-based group representing the solar energy industry, said the House should now move quickly to approve the package.
“The 1603 program has successfully created jobs and opportunity in all 50 states for construction workers, electricians, plumbers, contractors that have struggled during this difficult economic climate,” SEIA CEO Rhone Resch said in a statement.
The bill also includes a revival of the $1/gal biodiesel tax credit. The credit expired at the end of 2009, but would take effect retroactively from the start of 2010 and last through the end of 2011, according to a provision included in the tax package.
It also resurrects for one year a 50 cents/gal tax credit for companies which use liquefied natural gas, liquefied coal and other alternative fuels, excluding ethanol, methanol and so-called “black liquor” produced from paper manufacturing.
The Senate considered three sweeping alterations to the package, which would have, respectively, made the tax cuts permanent, halted the upper-income tax cuts and cut spending to offset an extension of the unemployment insurance. All three amendments failed. FEINSTEIN WILL SEEK TO CUT ETHANOL CREDITS
Another amendment from seven senators, including Senator Dianne Feinstein, Democrat-California, which would have reduced the ethanol tax credit and tariff, was not granted a vote by the Senate leadership Wednesday.
Feinstein, in a statement following the Senate vote, said she would seek to reduce ethanol credits when the new Congress convenes in January.
“The ethanol industry is the only one to ever receive the triple crown of government intervention. Ethanol use is mandated by law, its users receive federal subsidizes and domestic production is protected by tariffs. That policy is not sustainable,” Feinstein said.
The tax cut package now moves to the House where it faces stronger opposition from congressional Democrats.
A group of House Democrats, led by Texas Representative Lloyd Doggett, planned to file an amendment similar to one crafted by Feinstein. It was unclear Wednesday what amendments, if any, would be considered by the House.
A House Democratic aide said a full vote on the tax package was likely to happen Thursday.
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