Key biodiesel bills introduced on Capitol Hill

By Michael Shirek | June 21, 2007
The introduction of biodiesel legislation has been common on both the federal and state level this year. However, a few key federal bills are worth highlighting this month. In particular, three bills are now under consideration that would either provide federal funding or mandates for the production and use of biodiesel. The two House resolutions and one Senate bill have been read and referred to their respective committees.

House Resolution (H.R.) 927 was introduced Feb. 8 by Michael Burgess, R-Texas. It would amend the Internal Revenue Code of 1986 by increasing the 50-cent-per-gallon tax credit for blending biodiesel from recycled oils to $1 per gallon. The increase would bring the tax credit on biodiesel made from waste vegetable oil on par with biodiesel produced from virgin oil feedstocks. The bill has been referred to the House Ways and Means Committee. Rep. Vito Fossella, R-N.Y., said H.R. 927 will help to ease demand on edible oil by allowing biodiesel producers and marketers to benefit from the same tax credit whether they use virgin oil or reused oil in the process. The bill would also simplify the record-keeping needed to apply for the tax credits, eliminating the two-tier system that complicates the credit process.

In early May, Rep. Timothy Walberg, R-Mich., and Rep. Phil Gingrey, R-Ga., introduced H.R. 2178, a proposed federal mandate for all diesel fuel to contain at least 2 percent biodiesel. The Energy Independence through Biodiesel Act would amend the Clean Air Act by adding a paragraph stating that all diesel fuel sold to consumers in the contiguous United States contain 2 percent biodiesel on an annual average basis. The mandate would create a guaranteed market of more than 1.1 billion gallons of biodiesel per year based on the country's use of 55 billion gallons of diesel fuel in 2005. H.R. 2178 has been referred to the House Committee on Energy and Commerce. The bill may make it to the floor as it is now or as part of other legislation.

Senate Bill 1242 would amend the Federal Crop Insurance Act, and the Farm Security and Rural Investment Act of 2002, to establish a pilot program to offer crop insurance to producers who grow "experimental biofuel crops." The bill would also create a program to make loans and loan guarantees available to those same producers. Introduced by Sen. Jon Tester, D-Mont., on April 26, this bill was read twice and referred to the Committee on Agriculture, Nutrition and Forestry. Tester said the bill would help to remove barriers that keep biodiesel feedstocks like camelina from being grown by many producers. The bill would provide expedited insurance for biofuel crops through the USDA's Risk Management Agency, a process that normally would take years.

If the biodiesel legislation doesn't make it through Congress on its own, there is hope among biodiesel industry groups that the measures will be included in the 2007 Farm Bill. The National Biodiesel Board and American Soybean Association (ASA) are calling for more federal incentives for the burgeoning biodiesel industry. "Through biodiesel, soybean growers can help fuel the nation," said ASA First Vice President John Hoffman. "To do this, we need the 2007 Farm Bill to contain specific pro-biodiesel measures, including a biodiesel incentive program."
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