December 15, 1979
Page 36321
Mr. McCLURE. Mr. President, this is an amendment which I have discussed and we were discussing a little earlier about arranging to have it considered this evening. It deals with a question of an investment tax credit for the production equipment on biomass conversion.
The purpose of it is to allow the small production facilities across this country to get a little help on the capital investment. The Finance Committee utilized a direct payment on gasohol or alcohol fuels, but they did not deal with the production side.
I think that is a good way to approach the question of alcohol fuels where there is large-scale production for the commercial market. But it does almost nothing for the small-scale conversion that might happen down on the farm or behind the barn or for a circle of neighbors where an investment tax credit can be helpful.
This amendment would increase the investment tax credit to that which is allowed for the conversion of biomass to solid fuel to make that available for the conversion of biomass to liquid fuels at a 20-percent investment tax credit.
I have limited that to a period of years starting on October 1, 1980 and expiring on September 30, 1984.
Mr. President, I have discussed this with the managers of the bill on both sides of the aisle. I have discussed it with the Senator from Ohio, and earlier when I was going to take another route to the vote, and it is my understanding that there is no strong objection to this amendment from any of these quarters, and I hope the amendment will be agreed to.
Mr. MUSKIE. Mr. President, will the Senator yield?
Mr. McCLURE. I would be happy to yield to the Senator from Maine for a question without losing my right to the floor.
Mr. MUSKIE. There is a budgetary cost in this of $112 million. There is no cost for fiscal year 1980, so it is not subject to challenge under the present budget.
I am troubled by the fact that we are, in much smaller increments than was the case with the Percy-Randolph amendment, adding to the tax credit costs of this bill.
Mr. McCLURE. Might I respond to that, Mr. President, by saying that I understand the Senator's concern, and he knows I have the same concern in the budgetary sense.
Let me say these estimates of revenue loss are based upon the assumption that there will be a very active increase in the amount of money devoted to the production of biomass liquid fuels.
To get to a revenue loss of $112 million you would have to assume that there would be a billion dollar investment between now and 1984 in the production of alcohol fuel. I think that is a very optimistic projection, although I hope if the amendment is adopted that it might stimulate us to move in that direction and, thereby, decrease our dependence on imported fuel.
Mr. MUSKIE. I understand that. But I say to the Senator there have been two or three amendments — Senator GLENN's amendment adds maybe $32 million with the same kind of rationale, if it is used, and so on. I am just concerned that for the rest of this day and Monday these rather small increments will add up to a lot of money, as Senator DIRKSEN put his very familiar phrase, and since it does not impact on the 1980 budget I only have whatever powers of persuasion I have, and I do not want to make a major case out of every increment that is added.
But I would like to indicate at least my objection, and I hope the Finance Committee, in conference, will take a look at the cumulative total of these.
If I had before me the cumulative total of what is going to be proposed and what might be added, I could make a more rational case. If this incentive does not work and it is not spent there is no budgetary cost. But the best guess is that it is going to be $112 million over 4 years, and if it is continued through the decade we do not know what the cost will be, and if the incentive begins to develop as intended the costs would be enormous.
So I simply want to indicate, without forcing another rollcall vote at this point, my objection to the addition to these additional increments of cost. And if they begin to add up to a significant total taken together, then it would seem to me, we would have to consider an amendment cutting back on these expenditures.