Congressional Update

Congress Approves Spending Extension, Prevents Shutdown

President Joe Biden signed into law the short-term funding bill on Saturday morning. The final version signed by President Biden (Plan C) was the result of two failed attempts at more complex funds bills (Plan A and Plan B). 

The legislation will extend government funding until March 14. It provides $100 billion for disaster aid, $30 billion for farmers and a one-year extension of the Farm Bill. It does not include the provision to allow for year-round E15 sales which was originally included in Plan A. 

The passage of the of the short-term funding bill marks the end of the 118th Congress. The Senate will now depart for the holidays, and return on January 3, 2025, when the 119th Congress will be sworn in.

U.S. House Passes the Transportation Security Screening Modernization Act

Last week, the House approved the Senate passed version of the Transportation Security Screening Modernization Act that would eliminate costly background check redundancies within the Transportation Worker Identification Credential (TWIC), Hazardous Materials Endorsement (HME), and TSA PreCheck programs. Thank you to the PPA members who reached out to their members of Congress to get this important legislation over the finish line. The President is expected to sign the bill into law soon.

This bill directs the TSA Administrator to streamline the credentialing process to allow individuals to enroll in any security threat assessment program based on one background check, permit an individual to undergo a streamlined renewal process, align an individual’s credentials expiration dates, and reduce any duplicative costs on individuals seeking credentials.

Biodiesel Blender’s Tax Credit Extension Legislation Introduced in the Senate

On December 19, Senators Thom Tillis (R-NC), Joni Ernst (R-IA), Deb Fischer (R-NE), Chuck Grassley (R-IA), and Pete Ricketts (R-NE) introduced the Biodiesel Tax Credit Extension Act of 2024 (S. 5582) which is a companion to H.R. 9060, the Biodiesel Tax Credit Extension Act of 2024. These bills would extend the biodiesel blender’s tax credit for one year which is set to expire at the end of this year.

Unfortunately, the Inflation Reduction Act (IRA), which was signed into law in 2022, replaced the biodiesel blender’s tax credit with a new 45Z Clean Fuel Production Credit (CFPC) based on carbon intensity scores. Ethanol, biodiesel, renewable diesel and sustainable aviation fuel (SAF) will all be eligible for the new production tax credit, however, the Department of the Treasury has yet to publish CFPC guidance, and it is unlikely to do so before President Biden leaves office. Therefore, it is important that Congress acts as soon as possible to extend the biodiesel blender’s tax credit to give impacted industries market certainty for at least another year.

• Heating fuels marketers — click here to write Congress to extend the Biodiesel Blender’s Tax Credit.
• Motor fuels marketers — click here to write Congress to extend the Biodiesel Blender’s Tax Credit.

Business Groups Urges Congress to Delay the Corporate Transparency Act’s (CTA) Beneficial Ownership Reporting Requirements

Last week, EMA, along with dozens of associations, urged Congress to include language in the Continuing Resolution government spending bill to delay the Corporate Transparency Act’s (CTA) year-end compliance deadline for existing entities. This provision would provide much-needed relief to the Main Street business community, enable federal regulators to continue their education and outreach efforts, and allow various legal challenges to make their way through the courts. Click here to read the letter.

Recently, U.S. District Court for the Eastern District of Texas granted a nationwide injunction suspending enforcement of the Corporate Transparency Act (CTA) and its Beneficial Ownership Information (BOI) Reporting Rule. The injunction suspends obligations to file initial BOI reports by Jan. 1, 2025. The court found that the CTA is likely unconstitutional, but an appeal is expected; however, businesses should monitor deadlines and be prepared to file.

The injunction applies nationwide, providing that all businesses subject to the CTA’s reporting requirements are relieved of their CTA filing obligations until further notice. For companies created prior to 2024, the ruling suspends their obligation to submit their initial BOI reports to FinCEN before the January 1, 2025, deadline. For companies created in 2024, this suspends their obligation to report within 90 days of formation.

Businesses should remain cautious and continue to monitor their reporting obligations. The district court’s injunction is preliminary and likely to be appealed and could be reversed or vacated on appeal. If compliance requirements are reinstated, there is no assurance whether or how the prior reporting deadlines may be extended. In view of these developments, it seems likely that FinCEN will act in response before the end of the year, such as issuing interim guidance or a position statement on the case.

The court’s decision to grant the injunction was based on the court’s preliminary assessment that the CTA and the reporting rule is outside of the power granted to Congress and may violate constitutional protections. In his 79-page opinion, Judge Amos Mazzant ruled that the reporting rule “is likely unconstitutional as outside of Congress’s power,” noting that the law only regulates the “existence” of anonymous corporate entities, not their economic or commercial activity or operations. In granting the injunction, the court determined the injunction should apply nationwide, noting that the CTA and its reporting obligations apply to “approximately 32.6 million existing reporting companies” across the nation. The court determined it could not provide meaningful relief to those affected without enjoining the CTA and reporting rule nationwide.

The bottom line: Reporting companies do not need to comply with the CTA reporting deadlines. The ruling, however, is not a final determination of the CTA’s constitutionality; instead, it only temporarily halts enforcement while the case proceeds.