The U.S. Senate has rejected an amendment to a small-business bill that would have extended a popular tax credit for biodiesel fuel makers, drawing ire from lawmakers and others who supported the measure.

Sen. Chuck Grassley, R-Iowa, quickly condemned Thursday’s 41-58 vote against his amendment, even as the Senate approved the full small-business bill itself.

Grassley’s amendment would have extended for one year, through Dec. 31, the Section 40A income tax credit for biodiesel and renewable diesel.

Grassley and Sen. Maria Cantwell, D-Wash., filed a bill in August 2009 that would have extended the biodiesel tax credit for five years, but the bill was never acted on.

Since then, the Iowa Republican has pushed to extend the credit and tried twice to get unanimous consent to pass the credit, only to be objected to by Democrats, he said.

In April, Grassley joined with Sen. Kent Conrad, D-N.D., in introducing another bill to extend several tax credits and a tariff designed to support domestic ethanol and biodiesel producers, in hopes of bolstering the domestic alternative fuel industry while jump-starting job creation.

That bill would, if passed, move back the expiration date on a series of ethanol tax credits included in the original Green Jobs Act, approved by Congress as part of the Energy Independence and Security Act of 2007. The bill has not made it beyond the committee stage as of yet.

According to its sponsors, the bill would extend the current 45 cents per gallon volumetric ethanol excise tax credit, also known as the blenders’ credit, and the 10 cents per gallon small ethanol producers tax credit for five years. Both credits, originally scheduled to expire Dec. 31, would be reauthorized through the end of 2015 under the bill.

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