President George Bush signed into law H.R. 4520, the American Jobs Creation Act of 2004, on board Air Force One Friday morning.
The legislation is packed with goodies for agriculture, including a repeal of the extraterritorial income inclusion in current tax law that has allowed the European Union to put sanctions on U.S. agricultural goods. It also promotes job growth and benefits rural communities.
The corporate tax bill includes both the Volumetric Ethanol Excise Tax Credit (VEETC) provision and biodiesel tax incentives. The VEETC provision will extend to 2010 an existing tax incentive for using ethanol-blended gasoline, and will re-direct funds generated by an excise tax on ethanol to the highway trust fund (HTF). The biodiesel incentive provision creates a new tax credit of $1 per gallon for agri-biodiesel, and 50 cents per gallon for biodiesel (recycled oil).
"Biodiesel holds great hope to help reduce our dependence on foreign oil and improve our environment," says Sen. Chuck Grassley, R-Iowa. "The President's signature will begin the process of making that hope a reality. The tax credits for biodiesel and other renewable fuels included in my JOBS bill will allow us to begin looking to farmers, rather than the Middle East, to fuel our future."
"With a biodiesel tax incentive on the books, demand for biodiesel will increase dramatically," says American Soybean Association President Neal Bredehoeft, a soybean farmer from Alma, Mo. "For every 100 million gallons of soy-based biodiesel demand, the price of a bushel of soybeans is expected to increase by 10 cents. That could add an average of another $2,000 to the bottom line of farmers growing 500 acres of soybeans."
Some elements of the small ethanol producer tax credit provision are also included in the bill. Specifically, the bill allows the tax credit to be passed through to the farmer owners of a cooperative, and allows the tax credit to be offset against the alternative minimum tax.
"We thank President Bush for signing this important piece of legislation into law," says Leon Corzine, NCGA president and Illinois corn grower. "He kept his promise to corn growers by continuing to support expansion of the ethanol industry and the use of renewable fuels. Communities across the United States -- not just in rural areas -- will benefits from this bill."