Pascrell introduces bill to establish tax credit for biochemicals
Rep. Bill Pascrell Jr., D-N.J., has introduced legislation to establish a production tax credit for qualified renewable chemical production. The bill, titled the “Qualifying Renewable Production Tax Credit of 2013," or H.R. 3084, is cosponsored by Rep. Steve Stockman, R-Texas.
According to Pascrell’s office, technology to produce biobased, renewable chemicals is new, which means the cost of production is often higher than traditional petroleum-based chemical manufacturing. A statement released by Pascrell stresses that a lack of federal support for renewable chemical production in the U.S. means that many companies are being bought by foreign entities, which then export production jobs.
"By leveling the playing field for the biochemical sector, we are strengthening America's role as the leader in developing this groundbreaking industry," Pascrell said in a statement. "Creating good jobs right here in America is the best way to bolster our economy, and this legislation does just that while reducing our reliance on foreign oil and ensuring a more sustainable future."
According to the text of the legislation, the measure would create a production tax credit equal to 15 cents per pound of eligible content contained in renewable chemicals. Eligible content is defined to mean the biobased content percentage of the total mass of organic carbon in a chemical, as determined by ASTM D6866. The ASTM D6866 standard is used to determine the biobased content of solid, liquid and gaseous samples using radiocarbon analysis. It is the same method used by the USDA’s BioPreferred program to measure biobased content.
To claim the tax credit, the renewable chemical would be required to be produced in the U.S. by the taxpayer and used or sold for the production of chemical products, polymers, plastics, for formulated products. Any biobased chemical sold into the food, feed or fuel markets would not qualify. Biobased chemicals that were produced at quantities of 10 million pound or more in 2000 are also disqualified.
The legislation sets an aggregate limit on the tax credit of $500 million, and specifies that $25 million is the maximum amount of credits that can be allocated to a particular tax payer for any taxable year.
Sen. Debbie Stabenow, D-Mich., introduced a similar bill in the U.S. Senate in late June. Pascrell and Stabenow also introduced similar legislation last year.
The Biotechnology Industry Organization has spoken out to tank Pascrell for introducing the measure. “Creating a level playing field in tax policy will help U.S. industrial biotech companies innovate and develop new products,” said Jim Greenwood, president and CEO of BIO. “We’re already beginning to see renewable chemical companies put homegrown technologies to work to create high-quality rural jobs and spur economic growth. We thank Representatives Pascrell, Stockman, Sanchez, Schwartz and Neal for supporting innovation and helping U.S. companies compete in a rapidly growing renewable chemicals market.”